In the mid-1990s, Bangladesh saw a boom in microfinance institutions. Most started with donations and grants. “CDIP began differently,” shares Mifta Naim Huda, Executive Director at CDIP.
He recalls his father, Muhammad Yahiya, a development specialist who had worked with UNDP in Zambia, the World Bank in Indonesia, Grameen Trust and the Credit & Development Forum in Bangladesh. His father had asked a bold question: could an MFI be built without donations – reach operational and financial self-sufficiency – and still serve the poorest?
So, its story did not start with making loans; it started with savings. “We tried a savings module first: could rural households put away a little for emergencies or asset-building? That’s how we started… from village funds to microfinance. It took about 10 years to reach self-sufficiency.”
CDIP was registered in 1995; it partnered with PKSF, a local government institution for poverty alleviation; the Microcredit Regulatory Authority license followed in 2008; only in 2020 did it go for an NGO Bureau registration – after proving the sustainability hypothesis. It now takes on certain projects for donors to provide value-added services to its clients. Today, the institution operates 246 branches, serves ~330,000 clients, manages a portfolio of ~US$150 million, and remains women-focused (~97%).
Why women – what the loans fund in real life
“The women we work with are ambitious. Our priority is to support them to do more with their lives and find purpose,” Mifta says. CDIP offers collateral-free finance, coaching when necessary, and (in fields related to agriculture and machinery) rigorous technical orientations. The portfolio mirrors rural life: “~62% is agriculture-based; the rest is services and small businesses: a corner shop, a small clothing venture, even a scooty a woman rents out.”
Products that fit rural cashflows
“Most of our loans are for income-generating activities: basic loans for underprivileged populations, microenterprise loans for small and growing businesses; agri-loans to boost farm productivity; asset creation products with training related to agri-machinery and animal agriculture (with JICA and the central bank). Only long-standing, proven clients (that have built some wealth) can apply for home improvement, safe drinking water and sanitation (WASH) loans; and solar loans for households and small enterprises. The average tenor of a loan is 12 months (some 18–24 months).”
Alongside credit, CDIP runs savings products: A small portion is compulsory with a loan to encourage the practice of savings, where clients earn interest, too. Other savings products are voluntary: term deposits and double-benefit schemes tailored to rural needs. Its entire loan book is collateral-free, so first-time women borrowers who don’t have access to traditional banks aren’t screened out. The financial terms of the loans are set by strong regulators.
Beyond credit: health & education
Microfinance is the backbone of the organisation. Still, as per Bangladeshi laws on reinvesting profits in the field, CDIP directs 10–20% of annual profits (with regulator pre-approval) to social activities such as primary health and primary education.
Health (branch-based): “Many rural people don’t even notice early symptoms when they’re unwell,” Mifta says. CDIP provides BMI, diabetes & hypertension screening; eye charts to screen vision in partnership with Orbis International; seasonal care; pregnancy tests; ray therapies. “As an example, a husband told our doctor his wife was ‘always dizzy.’ She was drinking water with three tablespoons of sugar to cope. Her blood sugar tested very high. Another woman was thought ‘possessed’, but it was a nerve issue.” CDIP does not run hospitals or clinics itself; their role is triage and referral.
Education: CDIP has set up 3,000 learning centers, with about 60,000 primary school children, all-female volunteer teachers – to arrest dropouts and lift basic skills of students who attend school, yet struggle with homework. These students may be punished or embarrassed in class if they do not prepare their homework, but they often have parents who are not literate, or who leave early in the morning for work, living hand-to-mouth to provide for their families. The learning centres provide additional support to such students, so that they do not drop out. CDIP has also set up an Open Library Program, where children are encouraged to read, participate in reading and essay competitions.
CDIP also partners where needed: in plastic-bottle recycling, the team equips waste-picker mothers with safety gear and sets up “baby corners” away from sorting lines so children aren’t exposed. It partners with PKSF’s ENRICH program, to implement district-level development goals.
Climate resilience, WASH & solar – and the shocks that shaped them
“Every year since COVID has brought a new shock: pandemic, supply-chain stress from the Russia-Ukraine war, floods we hadn’t seen in 50 years, an earthquake,” Mifta shares. “So, our portfolio cannot be stagnant.” While most of its loans are for income-generating activities, it now starts to look at climate resilience. CDIP has recently built a ~USD 400,000 WASH portfolio, including loans for access to safe drinking water. It offers loans for renewables: solar loans help households and micro-shops cut energy costs.
Digitizing – without losing the human
Post-COVID, CDIP moved fast on process automation: the entire loan cycle, monitoring and KPI tracking run on a CDIP ERP; collections are digitized; fintech partners now provide credit scoring and repayment guarantees.
The point, Mifta reassured staff, isn’t layoffs: it’s giving field officers more time with clients. Traditional microfinance was group-based, but this is not always the case now. Ticket sizes have risen, and group attendance is not always possible. Field & credit officers are moving a lot more, so streamlining processes gives them more time in the field for awareness sessions and trainings.
Smartphone & internet penetration are rising, which will enable more seamless transactions next.
Client protection
“Over-indebtedness – where one client has taken a loan from multiple MFIs – is a challenge post-COVID,” he admits, “but the system is catching up.”
“The national microfinance credit bureau will be active in 2026- our data is being fed in. With over 700 licensed MFIs, the top 50 cover about 97% of the market – so if those datasets are clean, we’ll gain visibility quickly.”
To protect clients and ensure it engages in responsible finance, CDIP relies on sector coordination, loan-use awareness in group meetings, and the social gravity of reputation in rural communities.
It also creates shock absorbers. Every borrower contributes 1% into a Risk/Welfare Fund- CDIP matches with 1%. The fund covers funeral support and loan waivers on the death of a borrower/spouse/guardian and defined-illness support.
We are very pleased to be the first international lender to CDIP, and among the first foreign private investors to re-enter Bangladesh’s microfinance sector in recent years. This transaction follows a long and demanding process, marked by intensive collaboration and close communication between the teams, and completed successfully within a complex regulatory environment.
We strongly believe in the positive impact that responsible microfinance institutions such as CDIP can have on micro-entrepreneurs and families, particularly in some of the world’s most challenging contexts. We are confident that this initial transaction will pave the way for many more to come, extending the impact to a far greater number of communities.
Camellia Genova, CFASenior Portfolio Manager at Invest in Visions (IIV)
The investor link: IIV & Incofin, first in Bangladesh – in local currency
This financing is IIV & Incofin’s first investment in Bangladesh.
For Mifta too: “It’s our first international credit financing. We learned about structuring and reporting… and we formalized Audit and Risk Committees. We were moved by the immense patience shown by Incofin, who waited for two years for our regulatory steps to be finalized – it showed confidence in us.”
Local-currency funding helps Incofin avoid passing FX risks to clients; strategic guidance accelerates governance upgrades and digital operations already underway.
What’s next
Growth for growth’s sake isn’t the plan. From 151 branches when Mifta took the helm to 246 today, CDIP is considering an optimal 400–500 branch ceiling over the next five years – deepening services where it already operates, not spreading thin.
Mifta notes that while microfinance was born in Bangladesh, there are things to learn from replicated models around the world. Systems, automations, and digital processes. He regards micro-insurance initiatives and India’s Credit Bureau System as inspiration. As ticket sizes grow, as digital banks come into the picture, he looks forward to the evolution of CDIP’s role.
He sees a microfinance institute as different from a digital bank or regular bank, as it branches into social programs for poverty alleviation, resource and capacity building initiatives. The north star remains the founding hypothesis: savings habits, women’s agency, and services that evolve.
By the numbers (CDIP today)
- 246 branches; ~US$150m portfolio; ~330k clients; ~97% women.
- ~62% of lending is agriculture-based.
- WASH portfolio ~US$400k; solar for homes & nano-business.
- 3,000 learning centers; ~60,000 primary students; all-female teachers.
- ERP loan-cycle automation; digital collections; fintech credit scoring + guarantees.
Disclosure: This investment is made by Invest In Visions, where Incofin serves as an investment adviser.
Interview by Shonan Kothari, Marketing and Communications Manager, Incofin Investment Management