+94 11 4369612
info.lmfpa@microfinance.lk
Facebook
YouTube
Lanka Microfinance Practitioners' Association
  • Home
  • About Us
    • Our Management
  • Membership
  • Publications
  • Resources
  • Careers
  • Contact

Cabinet Approves Proposed Microfinance & Credit Regulatory Authority Act

June 21, 2021adminNews & Events

The main objective of the Sri Lankan Microfinance Act No. 06 of 2016 was to regulate microfinance institutions and give them a legal recognition both locally and internationally. The Act focused more on regulating MFIs that lend as well as accept deposits. The high cost of capital requirement by the Central Bank was only fulfilled by 4 microfinance companies that received their licenses. However, a large contingent of MFIs that are only engaged in lending were left out of the regulatory framework.  This gave rise to the emergence of many private money lenders who formed their own companies and exploited the grassroots level in the guise of microfinance by charging exorbitant interest and other charges from their clients. 

In 2018 the Lanka Microfinance Practitioners’ Association (LMFPA) reestablished a self-regulatory framework for its members by introducing a Code of Conduct and also introducing a Recommended Maximum Interest Rate (RMIR) for the benefit of the end borrower. This helped distinguish LMFPA member organizations from other financial institutions to some degree yet the influx of money lenders posing as MFIs were on the rise and a legal framework to regulate micro credit became a crucial need for the betterment of the industry. 

The LMFPA intervened on several occasions to address this issue that was bringing disrepute to the entire industry. Therefore in 2019, the Central Bank of Sri Lanka drafted a new regulatory framework for the microfinance industry called the Microfinance and Credit Regulatory Authority Act. In many moons thereafter, the draft Act has now received fresh approval from the present Cabinet to be drafted by the Legal Draftsman in 2021. The LMFPA has already forwarded its observations on the 2019 draft and proposed a sustainable mechanism to several key parties regarding the implementation of the proposed regulation. The Association will be closely monitoring the developments on the latest draft which is expected to be finalized in the near future.

wordpress theme by initheme.com

Previous post දිවිය දිරියෙන් ගොඩනැගු තිබිරිවැව කුසුමලතා – SAPSRI Next post Low Interest Government Loan scheme to emancipate over indebted micro borrowers

Recent Posts

  • Code of Conduct
  • LMFPA News Bulletin
  • LMFPA News Bulletin
  • LMFPA News Bulletin
  • PERSONAL DATA PROTECTION ACT

Archives

  • January 2024 (1)
  • January 2023 (1)
  • August 2022 (1)
  • June 2022 (3)
  • April 2022 (1)
  • February 2022 (2)
  • December 2021 (3)
  • November 2021 (1)
  • October 2021 (1)
  • September 2021 (1)
  • August 2021 (4)
  • July 2021 (1)
  • June 2021 (7)
  • April 2021 (2)
  • March 2021 (3)
  • February 2021 (1)
  • January 2021 (4)
  • December 2020 (12)
  • October 2020 (2)
  • September 2020 (2)
  • August 2020 (2)
  • May 2020 (1)
  • July 2018 (1)
  • January 2015 (1)

Categories

  • Learning materials (11)
  • News & Events (32)
  • Statistics (1)
  • Success Stories (14)

Lanka Microfinance Practitioners’ Association

LMPA is the pioneer in microfinance networking among microfinance practitioners in Sri Lanka, and was initiated on the 31st of March 2006. The Lanka Microfinance Practitioners’ Association is incorporated as a non-profit organization under the Companies Act No. 7 of 2007.

Useful Links

  • Home
  • About Us
  • Membership
  • Our Management
  • Publications
  • Resources
  • Careers
  • Contact

Contacts

Lanka Microfinance Practitioners' Association
No. 32, Suriyamal Mawatha, Divulapitiya,
Boralesgamuwa,
Sri Lanka
+94 11 4369612
+94 11 2099511
info.lmfpa@microfinance.lk
Copyright © 2024 Lanka Microfinance Practitioners' Association. All rights reserved | Designed & Concept by Deftfino