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A move to bring micro-credit operations under a regulatory framework is facing uncertainty as the authorities concerned and the credit operators are divided over its execution process, sources said.
"Strong disagreement has surfaced between the government agencies and representatives of non-governmental organisations (NGOs) over adopting a regulatory framework for micro-credit operations, putting the initiative in a limbo," said an official source.
According to sources, a high-powered committee was formed earlier to help facilitate adoption of regulatory framework for ensuring transparency and accountability in micro-credit operations by NGOs.
Headed by the BB Governor Fakhruddin Ahmed, the nine-member committee comprises of representatives from the Palli Karmosangsthahn Foundation (PKSF), NGO Affairs Bureau, Credit Development Forum (CDF), Social Welfare Department, BRAC and Grameen Bank.
As per the suggestion of the committee, a Micro-finance Research and Reforms Unit (MRRU) was also established under the BB to execute the overall processes for adopting the proposed regulatory framework.
But, some of the committee members, especially from the NGOs, have suddenly differed with the ongoing process and suggested that such procedures should be accomplished under an independent commission instead of the MRRU.
Other members, on the other hand, strongly disagreed with the suggestion, according to sources.
They argued that since the MRRU had already made some progress toward formulation of a regulatory framework for micro-credit operation in the country, the Unit should be allowed to perform its jobs accordingly.
Sources, however, observed that adoption of an effective regulatory framework for micro-credit operation would hardly be possible under an independent body.
The move to adopt a regulatory framework for NGOs has been initiated following a series of questions that had arisen over transparency and accountability in their micro-credit operations, according to sources.
The move also aims to set a uniform guideline for such credit operators as the terms and conditions of individual operators differ from one to another, they added.
It is argued that some financial irregularities take place in dealing with fund by many NGOs as their financial operations are not audited accordingly.
Against the backdrop, experts and policy makers have long been pressing the government to frame certain rules and regulations for the NGOs as a whole.
The guideline would be set in such a manner so that all the micro-credit operators come under one regulatory authority, sources said, adding the existing provisions allow them to get registrations from various government agencies for running such operations.
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