Helpline for microcredit victims to lodge complaints

As a proactive measure to address any issues or grievances faced by microfinance clients, the Lanka Microfinance Practitioners’ Association (LMFPA), in consultation with the State Ministry of Samurdhi, Household Economy, Microfinance, Self-Employment and Business Development, has established a ‘Microfinance Helpline’ 071 832 0000 to the general public and to persuade and encourage the stakeholders to take timely corrective measures for such grievances. 

The launch of this initiative took place this week at the Auditorium of State Ministry of Samurdhi, Household Economy, Microfinance, Self-Employment and Business Development, 1st Floor, Sethsiripaya Stage II, Battaramulla.

Recently in Sri Lanka, there had been adverse media reports about the microfinance industry. The LMFPA was concerned about these media reports as they could have serious implications on the industry as a whole. LMFPA is the umbrella network in Sri Lanka representing 53 microfinance institutions (MFIs) that are engaged in microfinance services that serve over two million low-income households in the country with a loan portfolio of over Rs. 80 billion.

When similar media reports appeared on several occasions in the recent past, LMFPA responded to these institutions with the good intention of fact-finding and to take any remedial measures if any. LMFPA as a responsible body wishes to safeguard the key industry stakeholders, especially the poor and low-income clients, who are considered to be the most vulnerable segment, who are presently facing the impact of the COVID-19 pandemic, too, while ensuring the sustainability of the member organisations and the industry at large.

The procedure of the customer complaint handling system is as follows: complaints can be made in either Sinhala or Tamil; only complaints from direct borrowers will be entertained for follow-up actions; verbal telephone complaints to be followed up with written complaints and are to be sent to LMFPA either through WhatsApp/Viber/email or by post; and if the complaint is against an LMFPA member, then it would be notified to the respective member organisation to take remedial action within two weeks.

For complaints regarding non-LMFPA members, LMFPA would still write to them as an Industry Association to take action, and a copy to be sent to the State Ministry of Microfinance for follow-up action.

The State Minister, in his address, commended the efforts of the LMFPA for introducing a microfinance helpline at this time of need. “The objective of microfinance is to provide assistance to those households that are incapable of raising capital for income-generating activities. But in recent times, through the media, we have heard various complaints from microfinance beneficiaries facing various kinds of harassment from lending institutions. The objective of this helpline is to curb such incidents and address the grievances of the affected parties in a transparent manner,” stated the Minister. 

He also stated that the Government was ready to introduce a Micro Credit and Regulatory Authority Act very soon and that it was encouraging that microfinance institutions are already taking a novelty approach to handle customer grievances.

LMFPA hopes this initiative will lead to finding solutions to genuine grievances of microfinance clients, minimise the criticism on the industry and ensure the important role played by MFIs in the national economic development and reduce the disparities in the distribution of benefits of development to rural, plantation and other underprivileged communities in the country.