The Hon. (Dr.) Upali Pannilage - Minister of Rural Development, Social Security and Community Empowerment

¶ 01 The Microfinance Division funds were utilized pursuant to a Cabinet Paper approved on 25 April 2021, submitted by then Minister of Finance Mahinda Rajapaksa. That Paper approved charging 6.67% interest on the sums borrowed from People’s Bank and Bank of Ceylon against Department deposits. It did not approve, nor mention, charging interest with respect to the LKR 28,767 million sourced from Samurdhi beneficiaries’ Microfinance Division funds. Consequently, we face difficulty recovering interest. These are the small savings of poor beneficiaries—about 1.6 million savers. We estimate an aggregate loss to the Microfinance Division of roughly LKR 20 billion from 2020 to date due to absence of approved interest recovery. We have repeatedly requested the Treasury to authorize payment/recovery of the due interest; absent explicit Cabinet approval, recovery has been difficult. We will continue to pursue authorization to ensure savers are protected and compensated.