Govt. to amend legislation on finance and microfinance companies

• Amendments to be introduced before Budget 2019
• Amendments to ensure CB intervention to implement financial relief program for women with loans from microfinance companies
• Relief only applicable to those who procure loans from registered microfinance companies  

The Government will bring in amendments to legislation pertaining to finance and microfinance companies before the presentation of Budget 2019. Finance Minister Mangala Samaraweera said that amendments would be introduced to ensure that the Central Bank is able to fully implement its relief program to bail out women who have obtained high interest loans from microfinance companies, particularly in the North of the island. (SG)

“To address that loophole, we will amend legislation relating to finance companies and microfinance companies prior to Budget 2019,” he said in response to concerns raised by Chief Opposition Whip and JVP Leader Anura Kumara Dissanayake.

The Chief Opposition Whip had pointed out that despite the Government’s promise to put a lid on the interest rates of microfinance companies, officials of the Central Bank had revealed that present laws restrict the Central Bank from interfering.

Minister Samaraweera went on to say that the Central Bank had been instructed to release the personal details and loan amounts of women who are entitled to receive the relief measures of the Government before the end of the month.

“About 75,000 women will benefit from the Government’s recent decision to write off the non-consumption loans granted up to Rs. 100,000 by registered microfinance institutions,” Minister Samaraweera said.

He assured the House that although this financial relief was being granted to women in the 12 drought-hit districts of Trincomalee, Batticaloa, Mullaitivu, Kilinochchi, Jaffna, Mannar, Vavuniya, Anuradhapura, Kurunegala, Polonnaruwa and Puttalam, the relief measures will be extended to encompass the entire island in the second stage.

However, the Minister noted that the Government would only provide this debt relief to those who procured loans from registered microfinance companies and not for individuals who had been duped, unregistered companies and loan sharks (Poli Mudalalis).