The Hon. (Mrs.) Samanmali Gunasingha

¶ 01 Hon. Presiding Member, why have we brought the Microfinance and Credit Regulatory Authority Bill? We discussed it in Parliament with several institutions and with Members from both sides. The Subcommittee under the Advisory Committee on Rural Development, Social Security and Community Empowerment also discussed the social, personal and structural problems arising from microfinance.

¶ 02 At present, over 2.4 million women have become borrowers under high‑interest microfinance, and more than 200 women have taken their lives due to inability to repay. Many had borrowed not for enterprises but to meet daily hardships. The new Government has allocated Rs. 96 billion to uplift entrepreneurs—especially women—without requiring collateral, asset declarations or burdensome bindings, focusing on viable project proposals and providing initial capital for self‑employment and business.

¶ 03 Previously, numerous institutions lent without regulation and charged excessive interest, causing grievous social tragedies not only in the North, East, Polonnaruwa and Anuradhapura, but even in urban Colombo. In recent years, only four institutions were registered with the Central Bank—clearly insufficient. Regulation and an authority are essential, as is proper post‑review.

¶ 04 For example, the “Bimputh Microfinance” institution associated with a former MP borrowed Rs. 200 million from the Housing Development Finance Corporation Bank and on‑lent at higher rates to rural women; then Rs. 200 million from NSB and Rs. 100 million from People’s Bank, again on‑lending at high rates. They then allegedly coerced women—seizing property, exerting various pressures, even sexual extortion—yet failed to repay state banks. Such institutions must be regulated. This Bill seeks precisely that.

¶ 05 Through regulations under the Authority, we can further strengthen safeguards. We have already submitted proposals to the Subcommittee, including ensuring loan agreements are explained to women borrowers in their preferred language and that terms are fully understood. These institutions must not ignore informed consent and must be subject to interest caps and fair practices.

¶ 06 The Bill requires at least one woman among appointed Members of the Authority. It also establishes a mechanism for handling complaints of customers of licensed moneylenders and licensed microfinance institutions, extending down to District, Divisional and GN levels. Previously no such mechanism existed.

¶ 07 Another gap has been data. There is no comprehensive dataset on the volume of loans, interest rates, or the number of people suffering under abusive practices. The Authority must maintain databases, conduct surveys and examinations, and couple regulation with programmes to empower women borrowers.

¶ 08 This is a process. We see this Bill as an important step to curb abuse, excessive profits and violence—especially against women—and to move the sector forward responsibly.