The Hon. Jagath Manuwarna

¶ 01 Hon. Presiding Member, I will focus on points raised during today’s debate on the Microfinance and Credit Regulatory Authority Bill. The Opposition had no major objection; most agree with it. As Hon. Chamara Sampath Dasanayake said, it would have been good to have brought this 15 years ago, and that implementing it is good. We bring laws honestly and in the people’s interest; we do not pass any law that harms the public.

¶ 02 We know there has been a major discourse in civil society about these microfinance companies. Based on their investigations, it is said there are about 10,000 unregistered financial entities operating in the country, and some say even up to 15,000. Only about four are registered with the Central Bank. So thousands are conducting village lending without proper procedures.

¶ 03 Those who suffer most are the poor—village farmers and workers, plantation people, and war-affected women in the North and East. It is said 2.8 million people have borrowed from microfinance companies, of whom 2.4 million are women. Household units have been severely stressed. In 2019, around 170 suicides were recorded due to these issues. Now in 2026, after the 2022 economic crisis, that number may have at least doubled. Therefore, regulation is essential, and that is why this Bill is brought.

¶ 04 Some try to create unnecessary fear in society. A recent Mawbima headline read, “15,000 village loan societies in crisis.” We give an assurance: voluntary village organizations—death-benefit societies, other community groups—will not be interfered with through this law. Those should be protected. We know these are tied to culture—death-benefit societies, farmer organizations—where lending and money rotation occur for village welfare. But microfinance companies are not like that.

¶ 05 Microfinance is associated with Prof. Muhammad Yunus of Bangladesh. It was piloted there but later found unsuccessful in places, and studies in Indian states also showed failures. In Sri Lanka, despite failures, it did not stop; instead, people’s lives were driven into deeper crises. Microfinance was meant to help those unable to provide collateral and prove income to banks, but the purpose has changed—now it drives the poorest, especially women, further down, enabling companies to profit. That is why regulation is so important.

¶ 06 This regulation protects both borrowers and lenders. Currently, there is no proper space to litigate or take legal action. Hence, a regulatory authority is necessary. Recognized banks do not camp in your living room until you pay, nor bar you from leaving the house, nor commit sexual assaults or intimidation. But microfinance operators have done such things, leading to suicides. There are many documentaries with women testifying to such harassment—collectors sitting outside all day; when asked to bring money, women go inside and end their lives. Because collection practices went beyond ethical boundaries. With this regulation, we can correct this.

¶ 07 We are a Government that protects the poor and low-income families. As we granted relief to those affected by the recent “Ditva” cyclone, increased wages for plantation workers to protect their lives and improve living standards, likewise we must intervene when exploiters enter villages to break their economies. We will not threaten or forcibly disrupt any financial institution, but will formalize the sector. This Bill is therefore very important. I conclude.

¶ 08 Thank you.