Friday, 10 April 2015 00:48
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The Central Bank of Sri Lanka (CBSL), the Ministry of Policy Planning and Economic Affairs and the Ministry of Finance have agreed on a framework for a proposed Micro Finance Law to supervise, regulate and promote micro finance businesses.
The Lanka Micro Finance Practitioners Association (LMFPA) has also indicated its broad agreement with the framework and suggested a few changes.
This is part of the Government’s 100 day program. The framework is on the website of the Department of Project Management and Monitoring and of the CBSL. Comments from stakeholders are welcome.
The micro finance industry provides accessible finance for economic activity at the ‘bottom of the economic pyramid’ to marginalised and economically-deprived segments of society, where access to credit is a huge issue, in all parts of the island.
It is estimated that 80% of the depositors and borrowers in the micro finance sector are women. Research has shown that when a housewife has access to credit, it is invested in family nutrition, health, housing and education.
The issue of micro insurance, the lack of which results in the poor who graduate from poverty, falling back into poverty due to economic shocks, is also being addressed by the Insurance Board of Sri Lanka
The prudential regulation, proper supervision, development and promotion of this sector of the economy will have a massive impact on the economy as a whole.
