Compliance of microcredit authority rules, 2010: a study on selected NGOs

Abstract

In view of the latest controversial activities of NGOs like Grameen Bank, the purpose of the study is to determine the level of compliance in Microcredit Authority Rules, 2010 in five microfinance institutions and to identify the barriers in complying those. The study is conducted following the multiple-case study research method with interpretive epistemology (Yin, 2003). Data has been collected mainly using semi-structured interviews, participant observations and document review from five microcredit organizations (ranging from small to medium) in Bangladesh. The findings confirm that Microfinance Institution have a high level of compliance with the Microcredit Authority Rules, 2010. Higher compliance was observed in the area of management and organogram, maintenance of accounts, rights of the clients, deposit and duration rules. But moderate compliance was remarked in case of service charges on loan particularly allowing a rational rate of rebate for prepayment of the entire outstanding loan.