By Ashwin Hemmathagama – Our Lobby Correspondent
The Supreme Court has given the nod to proceed enacting the Microfinance Bill, which is compliant with the Constitution.
Speaker Karu Jayasuriya informing the Supreme Court decision to Parliament held that clauses 9.1, 9.3, 11b are not included in the spectrum of the Provincial Councils.
The Microfinance Bill moved recently in the Parliament provides for the licensing, regulation and supervision of companies carrying on microfinance business, the registration of non-governmental organisations accepting limited savings deposits as microfinance non-governmental organisations, for the setting up of standards for the regulation and supervision of microfinance non-governmental organisations and micro credit non-governmental organisations and to provide for matters connected.Clause 9.1 provides that a licensed microfinance company may carry on forms of businesses set out in the Schedule of the Act and any other form of business as may be specified by the Board under subsection (2) subject to such restrictions and conditions as may be imposed by or under any written
law or specified in the licence issued to such licensed microfinance company. However, a licensed microfinance company is not allowed to carry on any form of business that is not set out in the Schedule of the Act or specified by the Board under subsection.
Preventing rate anomalies and the ripping off of borrowers as commonly seen in the microfinance industry, the bill sets limitations in terms and conditions under which any loan, credit facility or any type of financial accommodation may be granted by such company, the maximum rates of interest that may be charged on such loans, credit facilities or other types of financial accommodation, and the maximum periods for which any such loan, credit facility or other type of financial accommodation may be granted.