MIDAS was established in 1982 under the Societies Registration Act 1860 with the support of the United States Agency for International Development (USAID). MIDAS was also formally registered with the Department of Social Welfare, Government of Bangladesh as a non-profit voluntary organization.

Before the registration of MIDAS, a Cooperative Agreement was signed in 1981 between USAID under its Rural Industrial Project and The Asia Foundation as an intermediary to channel and administer USAID assistance to MIDAS. The registration of MIDAS as an NGO with its clear objectives and vision encouraged USAID to conclude the Cooperative Agreement (CA).