Fresh microfinance law soon to curb predatory lending
The government has cleared the enactment of a new Micro Finance and Loan Regulation Authority Bill to replace the existing Microfinance Act No. 6 of 2016 as part of an initiative to place unregulated money lending under strong control and protect vulnerable borrowers from usury lending.
During its latest sitting, the Cabinet of Ministers this week approved a proposal by PresidentAnura Kumara Dissanayake, who is the Minister of Finance, Economic Stabilisation and National Policies, to order the Legal Draftsman to prepare a new bill.
This follows the Microfinance and Credit Regulatory Authority Bill presented by the previous government earlier this year, which was withdrawn due to fierce public condemnation and constitutional complaints.
The previous version, which was endorsed for gazette publication in October 2023 and tabled in Parliament on January 9, 2024, was contested before the Supreme Court by various parties, including Transparency International Sri Lanka (TISL).
Petitioners maintained the bill did not stop widespread abusive practices like exorbitant interest rates—usually 40 to more than 200 per cent —and unethical recovery practices, including harassment and exploitation.
Even though the Supreme Court made rulings on the bill, the Finance Ministry chose to pull it altogether, conceding that it did not fully capture the policy as designed to combat micro-debt problems at the grassroots.
Officials saw historic public resistance and the record number of submitted amendments, and therefore a joint Treasury–Central Bank committee was formed to examine the outline.
The question was also presented to the Parliamentary Sectoral Oversight Committee for the Economic Crisis Impact, and it prepared a comprehensive report with contributions from stakeholders and initiated significant alterations. The report is now providing the basis for the drafting process ratified by the new Cabinet. Sri Lankan microfinance has been accused for decades of trapping poor rural borrowers—particularly women—in debt traps. In a country that has more than 11,000 microfinance institutions, there are fewer than several dozen that are regulated by the Central Bank.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!