In May 2016, the Tier IV Microfinance Institutions and Money lenders Act was passed by the Parliament to effectively govern the spectrum of Tier IV financial institutions and Money Lenders with the objective of protecting the savings the depositors, limiting predatory lending and unethical practices, and building confidence in the system to promote financial inclusion.

UMRA is expected to promote a sound and sustainable non-bank financial institution’s sector (savings and credit cooperatives, village saving and loan associations, non-deposit taking microfinance institutions and moneylenders) to enhance financial inclusion, financial stability, and financial consumer protection among the clients.

UMRA also seeks to protect interests of members and beneficiaries of tier 4 microfinance institutions including the promotion of transparency and accountability by applying both prudential and non-prudential standards, promote stability and integrity of the financial sector through ensuring stability and security of Tier 4 microfinance institutions and other functions.


“To be a world-class regulator by promoting stability of the microfinance sector to achieve financial inclusion”



“To support the sustainable growth of Tier 4 Microfinance Institutions and Moneylenders through effective regulation, licensing and supervision.”


Objectives of UMRA:

The objectives of the UMRA are specified in the Tier 4 Microfinance Institutions and Money Lenders Act 2016 as below;

This Act was enacted to promote the growth of the sustainable Microfinance Industry, economic and social Development

  1. Promoting Legitimacy and building the confidence of members, customers and investors in the microfinance business.
  2. Establishing prudential standards for microfinance institutions in order to safeguard the Deposits of Members and prevent financial system instability of the funds the depositors and ensure stability of the financial sector.
  3. Manage savings protection scheme and a stabilization fund for Tier 4 Microfinance institutions,
  4. Advise the Minister on matters relating to the development and operation of tier 4 microfinance institutions
  5. Prescribe performance indicators for tier 4 microfinance institutions
  6. Conduct periodic reviews of the activities of tier 4 microfinance institutions
  7. Establish a mechanism for reporting by tier 4 Microfinance institutions
  8. Prescribe, control and administer the assets of authority
  9. Regulate and supervise commodity based microfinance institutions
  10. Any other activity necessary to facilitate the discharge of its functions and for giving full effect of this Act.

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