Siyambalapitiya seeks regulation for microfinance institutions to curb exploitation

Thursday, 1 February 2024 00:04 - - {{hitsCtrl.values.hits}}

State Minister of Finance Ranjith Siyambalapitiya emphasised the importance of the Microfinance Regulatory Authority Bill in addressing issues related to certain microfinance institutions exploiting vulnerable communities.

“The Government aims to establish a more formal legal framework through the Microfinance Regulatory Authority Bill, taking into consideration the perspectives of all stakeholders,” he said during a discussion at the Finance Ministry where microfinance victims, borrowers, Central Bank officials and Finance Ministry officials participated.

Siyambalapitiya highlighted that a single Act cannot regulate all financial institutions in the country. “Specifically, microfinance companies with ownership levels below 2% of the total loan amount require a separate regulatory authority,” he pointed out.

The discussion also addressed the necessity of regulating various entities, including pyramid schemes and online lending institutions. He mentioned that the current draft before the court allows two years to complete the regulatory process for microfinance institutions.