The Sectoral Oversight Committee on Economic Development and International Relations has called for faster implementation of the Microfinance and Credit Regulatory Authority Act.
Committee members said stronger regulation is needed to protect people from exploitative lending practices and high interest rates.
MP Lakmali Hemachandra chaired the meeting with officials from the Sri Lanka Microfinance Practitioners’ Association at the Parliament complex.
Committee Looks at Microfinance Rules
Members discussed lending institutions that charge very high interest rates through informal practices. Such lending can create financial pressure for borrowers.
The committee also stressed the need for a fair regulatory system for legitimate microfinance institutions.
Discussions covered licensing procedures, legal and practical issues under the Act, restrictions on deposits and the cost of funds.
Members proposed simpler licensing for existing institutions. They also discussed allowing limited public deposits under regulatory supervision.
Another proposal focused on improving access to lower-cost funding for regulated microfinance institutions.
Lower-Cost Funding and Consumer Protection
The committee considered a mechanism to channel concessional funding from international institutions, including the Asian Development Bank, to regulated microfinance institutions.
Such funding could help reduce lending costs. However, any reduction in interest rates would depend on how such a mechanism is established and used.
Consumer protection provisions under the Act also came under discussion.
Members considered how long it would take to establish the Regulatory Authority and reviewed deadlines for microfinance institutions to obtain licences.
The discussions are part of efforts to strengthen oversight of the microfinance sector while creating a clearer regulatory environment for legitimate lenders.
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Last modified: October 19, 2026
