The country's microcredit regulator has made a move to cancel the registration of 35 micro finance institutions (MFIs) for failing to submit audited reports to the regulator.
They didn't file mandatory financial reports for the fiscal year 2020-21 until the last date of submission on September 30, 2021.
Following a failed correspondence, the microcredit regulatory authority (MRA) launched an inspection on the MFIs.
"We have decided to cancel registration of these MFIs as they failed to submit audited reports," said Executive Vice Chairman of MRA Md Fasiullah.
He said most of these MFIs were now out of business.
Asked if Covid is the reason that hit all businesses and financial activities, MRA VC said MRA was not sure about the reason behind their disappearance from the businesses.
However, Chairman of CDF Murshed Alam Sarker said Covid and exorbitant audit fees were the reason, for which these smaller-sized NGO-MFIs couldn't run mandatory audits.
He urged the ICAB to reduce fees for smaller organisations.
According to the MRA, 142 MFIs have faced the axe from the MRA for breaching relevant rules and regulations since 2011.
The MRA takes such punitive action against the institutions from time to time.
It has issued licences to 739 until this October.
The MRA prioritises the eradication of poverty, protection of client interests and fostering sustainable development of the country by ensuring transparency in MFI operations and their accountability.
The MRA scraps licences of the MFIs mostly for misusing funds in breach of related rules, the official mentioned.
The number of micro-credit beneficiaries has risen in recent years mainly due to the government's good policy for the sector, according to a senior MRA executive.
MRA recently invited applications for providing new licenses of MFIs following rising interest among new NGOs.
The NGOs that are registered under any of these laws - the Societies Registration Act, the Trust Act 1882, the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961, and the Company Act 1994 - can apply for the licence.
Currently, the registered MFIs are serving around 40 million of the country's 160 million people.
The MRA is the central body to monitor and supervise microfinance operations in the country.
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