The Sectoral Oversight Committee focused on mitigating the impact of the economic crisis on the affected parties due to the micro-finance crisis in Sri Lanka.

Attention was drawn to the aid when the Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis met in Parliament recently (09) under the Chairmanship of MP – Gamini Waleboda.

Organizations in Sri Lanka representing people aggrieved by microfinance loans were called before this Committee. Accordingly, officials representing the Central Bank of Sri Lanka, Ministry of Finance, Economic Stabilization and National Policy, Department of Prosperity, Ministry of Women, Child Affairs and Social Empowerment, Department of Registrar of Companies were present at the Committee meeting held.

28,000,000 rural persons affected!

Addressing those present, Sri Lankan organizations representing persons aggrieved due to microfinance loans had pointed out that number of aggrieved rural civilians stand at 28,000,000, out of which 24,000,000 are women. It was also mentioned that these facts were identified in a survey conducted in 2018. 

One reason for rural women going to Middle East

Furthermore, the representatives pointed out that even though these loans were given for a small amount, the rural persons were unable to pay them, but 38%, 48% interest was collected and because of this, the lives of the rural women had become completely miserable. They also pointed out that the microfinance credit crisis has also caused more rural women to join domestic work in Middle Eastern countries.
And it was disclosed that this crisis in the microfinance sector was created in the largest group that obtained loans from six Major non-banking financial companies under the supervision of the Central Bank, and these institutions have provided 80% of the total microfinance loans of 84,000 million i.e. 67,000 million rupees. It was disclosed that the property of those who obtained loans has already been acquired.

Bill doesn’t address concerns of aggrieved parties

Furthermore, the representatives of the aggrieved parties pointed out that the problems of the aggrieved parties have not been addressed in the proposed Bill and thus they have to face more problems.

The Chair of the Sectoral Oversight Committee pointed out that there is a need to undergo a complete review of the proposed Bill and accordingly, without inconveniencing the government, the Central Bank and the Ministry of Finance should jointly review the Act and amend the Act to provide solutions to the real problems of the victims and not to protect the six major financial companies.  He further pointed out that if not the 30/40 hundred thousand microfinance customers in Sri Lanka will have to face problems. The Chair of the Sectoral Oversight Committee mentioned that the Parliament is waiting to be informed about this by the Sectoral Oversight Committee.

Dr.Sarath Weerasekera, Nimal Lanza, Mohomad Muzammil, Asanka Navaratne, Wasantha Yapabandara, Nimal Piyathissa, and Jayantha Samaraweera, were present in this committee.