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Tuesday, 7 November 2023 01:19 - - {{hitsCtrl.values.hits}}
State Minister of Finance Ranjith Siyam-balapitiya announced that measures are underway to establish a separate regulatory authority dedicated to overseeing microfinance institutions.
Disclosing shocking data regarding the microfinance sector, he noted that of the 11,000 microfinance institutions operating in the country, only five are registered.
He said this underscores a significant gap in regulatory oversight within the sector.
“The adverse impact of these unregulated institutions on rural and low-income communities, which constitute a substantial portion of the population,” he said, adding that there are around three million who are facing various hardships due to the lack of oversight and accountability. Siyambalapitiya stressed that this matter has now garnered international attention, prompting the Government to expedite the formalisation of new legislation to address the regulatory gaps.
He also underscored the severity of penalties for running microfinance institutions that fail to meet legal requirements, stating that such actions could lead to fines of up to Rs. 5 million and imprisonment for five years.
