2026-03-04 / Debate: Microfinance and Credit Regulatory Authority Bill - Second Reading and Committee Stage 2026-03-04
## Summary
Hon. Wijesiri Basnayake spoke in support of the Microfinance and Credit Regulatory Authority Bill, defending it against Opposition criticisms which he characterised as misleading, including claims that the Bill was motivated by an ADB loan condition, that it would fail to regulate financial institutions, or that it would extend to informal community groups. He cited the Committee on Public Finance Chairman Hon. Dr. Harsha de Silva's endorsement of the Bill as evidence of its soundness. Basnayake argued that regulation is necessary to address documented abuses in the microfinance sector, specifically citing interest rates as high as 800–900 percent per annum and unethical debt recovery practices including sexual harassment of women borrowers. He called on Opposition members to engage substantively with the Bill's 89-page, 14-part text rather than what he described as politically motivated scaremongering.
Hon. Presiding Member, we are debating the Microfinance and Credit Regulatory Authority Bill. I am astonished at the Opposition’s criticisms—one says this is being rushed to get a USD 200 million ADB loan; another claims banks and non‑bank financial institutions won’t be regulated; others say even village death donation societies and emergency mutual aid groups will be controlled. They are trying to sow fear.
At the Committee on Public Finance last week, when this Bill was presented, its Chairman, Hon. Dr. Harsha de Silva, described it as very important and stated it had resolved previous issues—“100 percent correct,” in his words. Perhaps that is why he is not participating today—he has nothing to argue against.
Microfinance is crucial to reach low‑income people who cannot obtain facilities from formal banks unless they have the right connections. Microfinance provides them with credit, savings and other services. It did not start yesterday; it has history—like the ROSCA system from the early 20th century. Today microfinance is widespread and can foster financial inclusion and empower communities.
But abuses exist: illegal deposit‑taking and extremely high interest—2.2 percent per day, which is about 66 percent per month and 800–900 percent per annum. There is also unethical recovery, including sexual harassment of women borrowers. We must regulate to build a fair microfinance environment that helps people break the vicious circle of poverty and restore trust in the sector, which has been undermined and has affected macro‑stability.
This Bill has 14 Parts and 89 pages. I invite Opposition Members to read it and come for a serious debate rather than spreading falsehoods and trying to provoke public anger for short‑term political gain. With this Bill we can regulate credit, provide finance to those at the bottom, integrate them into the economy and boost growth. I conclude.
Thank you.