The Sectoral Oversight Committee focused on mitigating the impact of the economic crisis on the affected parties due to the micro-finance crisis in Sri Lanka.
Attention was drawn to this when the Sectoral Oversight Committee on Alleviating the Impact of the Economic Crisis met in Parliament recently (9) under the Chairmanship of MP Gamini Waleboda.
Organizations in Sri Lanka representing people affected by microfinance loans were called before this Committee. Accordingly, officials representing the Central Bank of Sri Lanka, Finance, Economic Stabilization and National Policy Ministry, , Department of Prosperity, Women, Child Affairs and Social Empowerment Ministry, Department of Registrar of Companies were present at the Committee meeting held.
Addressing those present, the Sri Lankan organizations representing the people who have been prejudiced due to microfinance loans pointed out that it has been identified that 2.8 million rural persons have been prejudiced due to the micro finance crisis, out of which 2.4 million are women.
It was also mentioned that these facts were identified in a survey conducted in 2018. Furthermore, the representatives pointed out that even though these loans were given for a small amount, the rural persons were unable to pay them, but 38%, 48% interest was collected and because of this, the lives of the rural women had become completely miserable. They also pointed out that the microfinance credit crisis has also caused more rural women to join domestic work in Middle Eastern countries.
And it was disclosed that this crisis in the microfinance sector was created in the largest group that obtained loans from six Major non-banking financial companies under the supervision of the Central Bank, and these institutions have provided 80% of the total microfinance loans of 84,000 million i.e. 67,000 million rupees. It was disclosed that the property of those who obtained loans has already been acquired. Representatives of aggrieved parties pointed out that the problems of the aggrieved parties have not been addressed in the proposed Bill and thus they have to face more problems.
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