Commercialization of Microfinance - Bangladesh

Many microfinance professionals argue that the application of market-based principles to microfinance is very important because only through the achievement in sustainability can MFIs respond to the needs of the poor. Commercialisation of microfinance institutions in Vietnam is quite spread and competitive. This paper:

• Describes the development of commercial microfinance institutions in Bangladesh;
• Analyses the possible opportunities for different kind of stakeholders;
• Suggests positive approaches of commercialisation of microfinance while preserving the social objective to reach the poorest.

Finally, the paper considers the possible implications of microfinance at both micro and macro level:

• Development of diversified and demand driven financial products;
• Increase of cost recovery and cost efficiency that can lead to operational and financial self-sufficiency;
• Use of market base resources of funds;
• Regulation and supervision that can possibly attract equity investment.