Chief Adviser Professor Muhammad Yunus on Saturday (May 17) called for the establishment of a dedicated Microcredit Bank to provide collateral-free loans to young entrepreneurs, saying microcredit has evolved beyond the traditional NGO framework.

He said, “Microcredit is the real banking. It’s time to upgrade it from an NGO model and create a Microcredit Bank governed by a separate law.” 

Prof Yunus said this while inaugurating the new headquarters of the Microcredit Regulatory Authority (MRA) in Dhaka’s Agargaon area.

Prof Yunus, the Nobel laureate and pioneer of microcredit through Grameen Bank, proposed a new legal framework to establish the Microcredit Bank as a "social business" institution—distinct from profit-driven conventional banks.

"The loan recipients can benefit, but investors should not be allowed to take profits," he said, adding that such a bank would give the country’s youth the capital needed to build businesses without chasing employment.

“This institution should be dedicated to helping young people become entrepreneurs. If they have access to capital, they won’t run after jobs,” he added.

He noted that current regulations only allow microcredit institutions to accept savings from members, not the general public. A formal bank status would expand their reach and impact.

Finance Adviser Salehuddin Ahmed, Bangladesh Bank Governor Ahsan H Mansur, Financial Institutions Division Secretary Nazma Mobarek, and MRA Executive Vice Chairman Prof Mohammed Helal Uddin were also present.

Praising MRA’s regulatory transparency, Yunus said, “Grameen Bank has always operated with trust and transparency—unlike conventional banks that have suffered from corruption and loan defaults.”

“The government must take responsibility to create institutions that support the aspirations of our youth,” he said.

SMS/