Microfinance Focus, June 15, 2011: The Microcredit Regulatory Authority of Bangladesh has relaxed the grace period for repayment of microcredit loans, reducing it to 15 days from the previously imposed 21 day period for the first instalment. The Authority has however maintained its ceiling on the chargeable interest rate at 27 percent per annum for country’s microfinance institutions.

Considering the wide spread protest form microfinance institutions, the authority has further reduced the minimum numbers of instalments on general loans from 50 to 46.

In November last year, the Microcredit Regulatory Authority issued guidelines pertaining to interest rate, grace period, number of instalments and other relevant issues. These guidelines are to be fully implemented by June 30, 2011.

Microlenders have however been resenting the interest rate cap and reported to be claiming that it would drive them bankruptcy and higher number of defaults.