Committee urges swift action to alleviate growing microfinance crisis

• By Yohan Perera

In a bid to iron out the escalating microfinance issue in Sri Lanka, the Consultative Committee on Minimising the Effects of the Microfinance Crisis directed Central Bank and Finance Ministry officials this week to step up their resolving efforts.

At a meeting held on Monday, the committee stressed the need to carry out a prompt review of the proposed Micro Finance Bill by the relevant officials.  

Expressing serious concerns for the welfare of borrowers, the committee urged officials to prioritise the needs of those affected. Additionally, the committee has also requested a comprehensive report on the current state of affairs within a week.

The committee highlighted that approximately 2.8 million individuals are adversely affected by the microfinance crisis. Of this staggering figure, nearly 2.4 million are women.
Many of these borrowers had initially sought financial assistance to pursue opportunities abroad, particularly in the Middle East.

Furthermore, a total of Rs. 84 billion was borrowed over the past few years. Out of this sum, Rs. 64 billion was provided by six non-financial institutions under the supervision of the Central Bank. These institutions have initiated asset acquisition procedures from borrowers, exacerbating the distressing situation, the committee said.