The Hon. Wijesiri Basnayake

¶ 01 Hon. Presiding Member, today we debate the Microfinance and Credit Regulatory Authority Bill. The Opposition’s criticisms are surprising. One Member said this is being rushed because the ADB will give USD 200 million; another claimed banks and NBFIs will not be regulated; another alleged even village death benefit or emergency thrift societies would be dragged in. They are trying to spread falsehoods.

¶ 02 At last week’s Committee on Public Finance, when this Bill came up, the Chair, Hon. Dr. Harsha de Silva, described it as a very important, 100% correct Bill that avoids earlier pitfalls. He is not here today because he has nothing to argue—he is abroad at this time.

¶ 03 Microfinance is critical because we target low-income people who cannot access formal bank finance without securities—unless they have the “car key” to circle a bank manager’s desk. Microfinance provides credit, savings, and other facilities for such people.

¶ 04 This sector is not new. In the early 20th century, cooperative systems formed a savings model. Today, microfinance spans a wide range. It can advance financial inclusion, empower people, especially women, and support economic upliftment.

¶ 05 Opposition Members said licensed banks and some institutions are not covered; but licensed banks and licensed finance companies are regulated by the Central Bank. Cooperatives and thrift and credit cooperatives fall under the Department of Cooperative Development and the Department of Divineguma/Small Industries development. Our focus here is on community-based organisations, microfinance companies, and NGOs engaged in microfinance.

¶ 06 Sri Lanka is said to have around 10,000 microfinance institutions broadly defined, but there is inadequate regulation and registration. As per the Central Bank’s published data, by May 25, 2025, only a limited number of licensed microfinance institutions were registered.

¶ 07 We must break the vicious circle of poverty—low income, low savings, low investment, low productivity—by ensuring suitable, regulated microfinance. But some outfits take illegal deposits and charge exorbitant rates—daily 2.2%, which annualises to 800–900%. There are also unethical recoveries and sexual harassment of women. We must regulate and create a dignified microfinance environment that truly helps the poor contribute to growth and restores trust in the sector, which impacts financial stability.

¶ 08 This Bill has 14 parts and 89 pages. I invite Opposition Members to read it. Do not dismiss the Government benches as “nursery kids.” Engage in constructive debate. Abandon political poverty and come prepared.

¶ 09 Finally, this Bill is vital to regulate lending, provide appropriate finance to the grassroots, connect them productively to the economy, and raise growth. I conclude in support.