Leasing customers group to default until Govt. provides solutions

• Joint Association of Leasing and Debt Instalment Payers says decision was reached unanimously by 200,000 members as Govt. and CBSL ignored repeated pleas for the past two years
• Lists five demands as immediate relief measure
• Expresses disappointment over CBSL Chief remarks for not extending repayment time frame 
• Holds former Finance Minister Mahinda Rajapaksa and CBSL Governor Ajith Nivard Cabraal responsible for making plight of battered SMEs worse
• Claims leasing and financial firms posted unprecedented gains by ripping off middle-income earners
• Urges Govt. to probe leasing and finance companies
• Calls on public to reach out to association for redress over arbitrary seizure of assets 

General Secretary Asanka Ruwan Pothupitiya

Media Secretary Sumedha Amarasinghe

The Joint Association of Leasing and Debt Instalment Payers has unanimously decided to default for three months starting 9 June until the authorities give solutions based on five key demands.The five demands are 1) revise 11.5% additional interest levied on the capital outstanding unjustly, 

2) stop seizure of vehicles and property arbitrarily till 31 December, 3) provide a concessionary period to repay lease and debt instalments till diesel, petrol, and gas, can be supplied without hindrance, 4) reduce the interest rate on increased fixed deposits and reduce the increased interest on loan instalments and 5) amend the unfavourable Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990, Debt Recovery (Special Provisions) Act No. 2 of 1990 and Finance Leasing Act No. 56 of 2000.

“Our members represent the SMEs that contribute 52% of the Gross Domestic Production (GDP), yet the Government and the Central Bank remain deaf and blind to our repeated pleas to either restructure loans or extend the timeline for repayment for the past two years. 

“In this background, 200,000 members have unanimously decided to stop premium payments till authorities provide us with solutions,” Joint Association of Leasing and Debt Instalment Payers General Secretary Asanka Ruwan Pothupitiya told journalists recently.

He pointed out that the members spend half of the day in long queues to secure fuel for their three-wheels, taxi vehicles, machinery, and generators to continue the business, adding that the people did not undergo such dire situations even during COVID pandemic.

Pothupitiya claimed that the Central Bank Governor Dr. Nandalal Weerasinghe has also stressed that the banking and financial sector cannot give further extension or relief to repay leasing and debt instalments, noting that it would affect the fixed deposits in the industry.

The association also pointed out that they hope the authorities will reconsider their decision not to support the SMEs or is ready to embrace the high non-performing loans (NPL) in the banking and financial sector in the future.

He also pointed out that pre-tax profits of leasing companies have recorded the highest profits during the last financial year, and it was a result of money they earned from the seizure of properties by their members, an additional 11.5% interest levied on the capital outstanding, and other late payment fines.

“We have been calling on authorities to stop this for years, but no action has been taken yet,” he added.

Pothupitiya urged the Government not to destroy the 52% of SMEs who contribute to the national economy, by trying to protect the cronies of the Ministers and large corporations.

He charged that former Finance Minister Mahindra Rajapaksa and former Central Bank Governor Ajith Nivard Cabraal were responsible for slapping the 11.5% additional interest rates and for wrecking the SMEs amidst multiple crises.

The Joint Association’s Media Secretary Sumedha Amarasinghe said the economy is bankrupt, but the Government continues to be blind, deaf, and mum with no plans for revival.

“Today people are in dire straits as a reflection of the worst economic crisis with the high debt burden, skyrocketing cost of living, and all income-generating avenues being blocked. Yet, the large corporations are thriving as they continue to make profits from the crisis by stripping the middle-income earners or the majority of the population,” he added.

Claiming that the leasing and financial institutions are not properly audited, Amarasinghe called on the Government to intervene and do a thorough evaluation.

Joint Association of Leasing and Debt Instalment Payers also called on the public who encounter any issues relating to arbitrary seizure of property by financial institutions to inform the association immediately.