CoPF approves Microfinance and Credit Regulatory Authority Bill

Tuesday, 17 February 2026 03:21 - - {{hitsCtrl.values.hits}}

The Committee on Public Finance (CoPF) has approved the Microfinance and Credit Regulatory Authority Bill at a meeting held in Parliament.

The meeting was held under the chairmanship of MP Dr. Harsha de Silva, with Deputy Ministers Chathuranga Abeysinghe, Dr. Kaushalya Ariyarathne, and Nishantha Jayaweera, and MPs Attorney-at-Law Rauff Hakeem and Nimal Palihena in attendance.

The Bill seeks to establish the Sri Lanka Microfinance and Credit Regulatory Authority to regulate money lending and microfinance businesses, protect customers, repeal the Microfinance Act, No. 6 of 2016, and provide for connected matters.

According to the Parliament Secretariat, Dr. de Silva noted that the original 2024 draft had been challenged before the Supreme Court and that constitutional inconsistencies identified by the Court appear to have been addressed in the revised draft. The Committee appreciated the updated Bill, prepared after stakeholder consultation.

Officials said the Authority will licence and regulate money lending and microfinance businesses, governed by a Board of Directors, and that no person may conduct money lending without a licence. Online lending will be permitted only through licenced entities, with customer protection identified as a primary objective. Certain lenders, including e-commerce operators, will fall outside the Act’s scope.

The Committee discussed recognition of the social empowerment role of community-based institutions, including reduced regulatory fees or simplified compliance. It also recommended that the Finance, Planning and Economic Development Ministry implement communication programs, including publishing FAQs, to address public mistrust.

As the Authority will have statutory powers to determine maximum interest rates in lending and deposit sectors, the Committee advised these be exercised without undermining microfinance savings and lending instruments.

Delegation of limited functions to Divisional Secretariat offices was discussed to ease access for small-scale lenders, alongside the need for a robust information technology system for implementation.