The Sectoral Oversight Committee on Economic Development and International Relations has stressed the need to expedite the implementation of the Microfinance and Credit Regulatory Authority Act to strengthen regulation of the microfinance sector and protect the public from exploitative lending practices.
The Committee, chaired by Member of Parliament Lakmali Hemachandra, held discussions with officials of the Sri Lanka Microfinance Practitioners’ Association at the parliament complex, the Department of Communication of Parliament said in a statement.
During the meeting, members highlighted the need to regulate lending institutions that impose excessively high interest rates through informal practices, causing financial hardship to the public. They also emphasized the importance of establishing a fair regulatory environment for legitimate microfinance institutions.
Discussions focused on the licensing process for microfinance institutions, legal and practical challenges associated with certain provisions of the Act, restrictions on accepting deposits and the cost of funds. Proposals were made to simplify licensing procedures for existing institutions, permit limited public deposits under regulatory supervision and improve access to lower-cost funding.
The Committee also discussed the possibility of reducing lending interest rates by establishing a mechanism to channel concessional funding from international institutions, including the Asian Development Bank, to regulated microfinance institutions.
Other matters considered included the implementation of consumer protection provisions under the Act, the time required to establish the Regulatory Authority and the deadlines given to institutions to obtain licences.
Committee Considers Mining Rights for Lanka Mineral Sands
Meanwhile, the Committee considered matters relating to the granting of mining rights for 68 grids to state-owned Lanka Mineral Sands Limited (LMSL) and the provision of operational support to the company. It decided to issue the necessary recommendations on these matters.
LMSL had requested exclusive mining rights over mineral sand deposits along the northeastern coastline, seeking to prevent the allocation of these deposits to other private institutions.
Discussions focused on ensuring a long-term and uninterrupted supply of raw materials for value-added industries by utilizing mineral sand deposits along the eastern coastline. In line with the Government’s policy of exporting mineral sands as value-added products rather than raw materials, the Committee also considered attracting local and foreign investors to implement value-addition projects.
The review of previously issued mineral mining licences, action against irregular licences and the transfer of relevant mineral deposits to LMSL were also discussed. The Committee was informed that information concerning certain irregularities identified recently had been forwarded to the Criminal Investigation Department (CID).
Members further highlighted the importance of establishing a multi-agency committee mechanism to ensure transparency and coordination among relevant institutions in the future issuance of mineral mining licences.
The meeting was attended by Members of Parliament Lakshman Nipuna Arachchi, Attorney-at-Law Sagarika Athawuda, Kandhasamy Prabhu, Thilina Samarakoon, Wijesiri Basnayake, Suranga Rathnayake and Sivagnanam Sritharan, together with officials from the Ministry of Industries and Entrepreneurship Development.
