The interim government has issued an ordinance to allow the establishment of microcredit banks in Bangladesh, paving the way for specialised institutions to conduct microcredit operations for employment generation and poverty alleviation.
The ordinance, titled the Microcredit Bank Ordinance 2025, authorises Bangladesh Bank to issue licences for microcredit banks.
According to a notification issued by the law ministry on Wednesday, microcredit banks will be allowed to operate in one or more districts or divisions, or across the country.
The ordinance, drafted by the Financial Institutions Division under the finance ministry, sets the authorised capital of a microcredit bank at Tk500 crore, with a minimum paid-up capital of Tk200 crore at inception.
The banks will be permitted to accept deposits from borrowers as well as from other individuals and institutions.
Each microcredit bank will have a 10-member board, including three directors from borrower-shareholders, two nominated by Bangladesh Bank and three representing other shareholders. The managing director will be a board member but will not have voting power.
The ordinance was issued two weeks after the Advisory Council approved a proposal allowing microfinance institutions, shareholders and individuals to establish such banks.
Earlier, several leading microfinance institutions, including BRAC, had expressed concerns that the draft law could undermine the sector’s traditional role in poverty alleviation and financial inclusion.
However, Asif Saleh, executive director of BRAC, said the move formally recognises startup and venture capital within Bangladesh’s regulated financial system.
He said the framework could help address long-standing gaps in access to patient capital for entrepreneurs, although its impact would depend on implementation, regulatory capacity and conditions in the banking sector.
Saleh added that, given the current state of the banking sector, significant private or impact capital inflows into microcredit banks are unlikely in the near term.
