Agency

The International Finance Corporation (IFC) – a member of the World Bank Group – is the largest global development institution focused exclusively on the private sector in developing countries. The project was undertaken under the Bangladesh office of the IFC.

Context

The Microfinance sector represents a key pillar of Bangladesh’s financial as well as economic sectors. The Government of Bangladesh has a vision of achieving Smart Bangladesh by 2041. This entails digitization of public service delivery, enabling digital financial services and achieving digital inclusion for all. In this context, the IFC aims to modernize the microfinance sector in the country with a focus on digitalization and microhousing finance.

Objective

The objective of the project is to develop and modernize the microfinance sector in Bangladesh from its current state to the next level of sophistication. The assignment aims to conduct a diagnostic to assess and understand the current state, appetite to change, current and required regulatory landscape, current and required use of technology, current and required allied market developments, and potential size of financial investments required, in two key areas: Digital transformation and offering of digital financial services by MFIs, and Micro-housing finance.

The project entailed conducting extensive in-country diagnostics, stakeholder consultations, and developing a roadmap for the IFC and the Micro Credit Regulatory Authority to guide their efforts in the thematic areas. The scope of work includes desk review including referencing successful examples from the regional and global level, consultations with MFIs and other stakeholders in Bangladesh including policymakers and supporting institutions as well as FGDs with clients.

Outcome

The output will be an Assessment Report on the state of digital transformation and micro-housing finance in the microfinance sector in Bangladesh. This will be followed by a Roadmap and implementation plan proposing activities to be undertaken by IFC and MRA in furthering the adoption of digital technologies by MFIs and offering micro-housing products to microfinance clients.