2026-03-04 / Debate: Microfinance and Credit Regulatory Authority Bill - Second Reading and Committee Stage 2026-03-04
## Summary
The Hon. (Mrs.) Samanmali Gunasingha spoke in support of the Microfinance and Credit Regulatory Authority Bill, citing widespread harm caused by unregulated high-interest lending, including over 2.4 million women in debt and more than 200 reported suicides among borrowers unable to repay loans. She highlighted the Bimputh Microfinance case as an example of institutional abuse, wherein a former Minister's company borrowed funds from state banks at low interest and re-lent them to rural women at high rates, with loans going unrepaid to the state and borrowers subjected to coercion and harassment. The Bill proposes to establish a regulatory authority with powers to license institutions, set interest rate conditions, mandate loan agreements in the borrower's language, create complaint mechanisms through District and Divisional Secretariats, and maintain national microfinance datasets. She also noted the government's allocation of Rs. 96 billion for collateral-free entrepreneurship support, particularly targeting women, as a complementary measure to address the root causes of predatory borrowing.
Hon. Presiding Member, with your leave. Why have we brought the Microfinance and Credit Regulatory Authority Bill? We discussed this in Parliament with several institutions and with Members on both sides. The Advisory Committee of the Ministry of Rural Development, Social Security and Community Empowerment also discussed the social, personal and structural problems arising from the microfinance issue. We saw the very issues mentioned here today.
At present, over 2.4 million women in our country have become debtors by taking high-interest loans from various institutions, and more than 200 women have taken their lives because they could not repay. In many cases, the institutions granted loans without any productive project, and borrowers used funds to face day-to-day hardships rather than to start livelihoods. The new Government has allocated Rs. 96 billion to support entrepreneurship—especially to transform many women into entrepreneurs. Under these facilities, they are not required to provide collateral or other bindings; they must present a project, and the seed capital will be provided to enable self-employment and enterprises.
Previously, many financial institutions lent without regulation and charged exorbitant interest, leading to social tragedies not only in the North, East, Polonnaruwa and Anuradhapura but also in urban Colombo. Meanwhile, as of then, only four institutions were registered with the Central Bank. Should this not be regulated? Should there not be an authority and a process? Absolutely.
Let me cite the Bimputh Microfinance case. An institution owned by a former Minister obtained low-interest funds from state banks—Rs. 200 million from the Housing Development Bank, Rs. 200 million from NSB and Rs. 100 million from People’s Bank—and relended to village women at high interest. Those bank loans were not repaid. They even used force to take women’s assets, exerted pressure and sought sexual favours. These are public funds. Yet none of that money was repaid to the State. This is why we need regulation.
This Bill will regulate such institutions. The Authority will promulgate regulations, and additional measures can be added through regulations. We have already submitted proposals to the Ministry’s committee. Many agreements were signed with institutions on unfair terms. It must be required that agreements are explained in a language understood by the borrower—Sinhala, Tamil or English—so borrowers know the terms. Interest and conditions must be regulated.
I also say to some in the Opposition: study the Bill carefully—do not just read a page or two and shout. The Bill provides that among appointed members, at least one shall be a woman. It also requires a mechanism to receive and address complaints from customers of licensed moneylenders and licensed microfinance institutions. Such a mechanism did not exist before. Accordingly, mechanisms are to be set up through District Secretariats, Divisional Secretariats and even Grama Niladhari divisions. We also found a lack of data on microfinance—loan volumes, numbers affected, etc. The Authority must maintain datasets, conduct reviews and examinations, and alongside lending, implement programmes for women’s empowerment. This Bill is a significant step forward, to put an end to abuses, especially against women, and move the process ahead.
Thank you.