Hon. Thilina Samarakoon

Hon. Presiding Member, before offering my views on the Microfinance and Credit Regulatory Authority Bill before us today, let me briefly respond to a point made earlier by an Opposition Member who said we behave like Montessori children, or like Grade One children, or are unfit for a decent debate. If you look at how both Government and Opposition have conducted themselves in this Chamber, you can judge who has engaged in mature debate and who has behaved like children. Even yesterday morning, there was needless commotion and unruly behaviour unbecoming of this House. Turning to the Bill, we must understand what microfinance is. Microfinance arose to empower society—particularly people without clear economic capacity—to strengthen them within a defined period through programmes. Discussion in recent years has focused narrowly on small loans, but microfinance goes far beyond that. If examined properly, it can be successful. Key aims include: - Providing credit, savings and other financial facilities to poor people unable to access formal banks. - Supporting income generation and expanding productive capacity. - Improving living standards and enabling active contribution to national economic development. We must ask whether there has been regulation in Sri Lanka. Discussions took place in 2016, then in 2019 and 2024, but without a conclusive outcome. This Bill seeks to bring such a conclusion; if further amendments are needed, we are ready to make them. In 2019, the UN Human Rights Council, at its 41st Session, discussed Sri Lanka’s situation. It was stated that nearly 2.9 million people in Sri Lanka were affected by microfinance debt, especially in the Northern, North-Central and North-Western Provinces, and that over 170 people had taken their lives due to this burden. Microfinance has left bitter experiences, particularly among rural, poor, less-educated communities who, due to weaknesses in the banking system, were exploited. We must transform this unregulated activity into a formal system. Some Opposition Members claimed we are only looking at institutions, but we are looking from both sides: institutions and the public. Through this Bill we aim to: - Establish a Microfinance and Credit Regulatory Authority. - Introduce a strong regulatory framework. - Prohibit lending and microfinance business without a licence, so we can effectively regulate. - Create a customer protection framework with clear procedures. - Grant investigative powers to ensure compliance, and impose fines for violations. - Impose limits on accepting deposits. Many institutions have come to villages and accepted deposits, causing hardship. - Where the Central Bank’s current powers are insufficient, empower the new Authority accordingly. There was concern that including community-based organisations (death donation societies, etc.) would complicate their work. Our aim is to provide solutions if problems arise for such CBOs, and to adjust in future if needed. We bring this Bill looking from the people’s side, not to protect or enrich institutions.