World's Largest NGO Admits Hand in Bangladeshi Microfinance Crisis

    BRAC's headquarters in Dhaka, Bangladesh. has admitted that it pushed surplus loans to borrowers, contributing to the microfinance crisis in Bangladesh. Photo by: Kris Robinson

    Amid an excess of foreign funding and lack of regulations, Bangladesh-based BRAC, the world’s largest non-governmental development organization, has admitted that it pushed surplus loans to borrowers, contributing to the microfinance crisis in the Asian nation.

    “Yes,” Shameran Abed, program head of microfinance at BRAC, told IRIN when asked whether the organization lent surplus funds to borrowers, citing “excess liquidity” and a lack of communication between lenders. 

    “In the mid 2000s, the microfinancing industry grew too fast. And yes, we did,” said Abed. “But I’ll tell you why we did - we didn’t have perfect information.”

    A Norwegian documentary, “Caught in Micro Debt,” released in 2010 claimed that borrowers had difficulties in repaying the loans.

    BRAC disbursed $1.1 billion worth of loans to women throughout Bangladesh in 2009.

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    About the author

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      Ma. Rizza Leonzon

      As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.

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