The Hon. Kanthasamy Prabu

¶ 01 Hon. Presiding Member, today we are debating the Microfinance and Credit Regulatory Authority Bill. In the past, there were many criticisms among the people regarding microfinance lending. Through this Bill, there is a need, as a Government, to resolve those issues.

¶ 02 I believe the microfinance model originated in Bangladesh, where small artisans in villages were identified and provided small loans at low interest to promote their development. It aimed to help them attain progress by creating financial sources and supporting rural small entrepreneurs, enabling them to improve economically and in livelihood terms.

¶ 03 After the National People’s Power Government assumed responsibility for the country, we recognized the problems people faced due to microloans. Our objective is to rescue them from that impact. The Government always frames laws considering people’s welfare. We must ensure control, regulation, review, and monitoring to make these institutions accountable.

¶ 04 You know microfinance companies target poor people. After the war ended in 2009, this lending environment arose. In the North and East, which had suffered due to war and natural disasters, microfinance was introduced to meet urgent financial needs. These loans were particularly offered to women-headed households and also to families of migrant workers in the Middle East, often at high interest with weekly collections. If they defaulted, additional interest was imposed. Women who took microloans for livelihood activities, when unable to repay, would take another loan from a different institution, falling into a debt cycle and pressure, sometimes resulting in suicides. Such a situation has been created in Batticaloa District, with increased suicides tied to microloan harassment by financial institutions.

¶ 05 Thus, our Government has a responsibility to provide relief and protection to the poor. In the past, elites created financial institutions; even some former Ministers and MPs were involved, setting up institutions in their names or associates’ names and harassing people. Through this Bill, we can monitor lending and savings. Even if institutions are under the Central Bank’s supervision, this Bill adds to that oversight. For example, these institutions take signatures on documents from poor borrowers who have no clarity about the contents, and they often are not given copies. Later, those signed terms are used to collect excessive charges and interest, pushing people into distress.

¶ 06 In Batticaloa District, around Rs. 50 million in loans has been extended by microfinance institutions; Rs. 7 million remains outstanding. A new system is being used: granting loans over the phone. A health-sector employee who borrowed through such a digital method recently committed suicide. While digitalization has benefits, it also has harms. Institutions that were formed for a noble purpose have today become a source of harassment. Therefore, there is a need to protect people from ongoing economic and psychological harm.

¶ 07 Another matter: Sri Lankan artists, especially Tamil artists, are now showcasing their talents, entering Indian cinema and succeeding. A recent Indo-Lanka collaborative film, “Anthony,” with music by Ilaiyaraaja, has been produced in Tamil, Sinhala, and Malayalam. It has Sri Lankan-born producers and features our artists. We should develop the Tamil cinema sector in Sri Lanka. It thrived before the war but could not grow afterward due to limited opportunities. Under the National People’s Power Government, we will take steps to support the welfare of Tamil artists. I hope “Anthony” gains international acclaim and brings pride to our country. I conclude. Thank you.