LMFPA received several complaints from member MFIs operating in Batticaloa district that the District Secretary of Batticaloa stated that all microfinance activities undertaken by NGOs in the district are to be banned with immediate effect. LMFPA has 5 NGO member organizations serving low income households in Batticaloa. Even an MFI licensed by the Central Bank of Sri Lanka which is a member of LMFPA was also asked to stop lending.
Ceasing operations in the midst of recovering from the impact of COVID 19 would be catastrophic and damaging to the industry in general therefore the LMFPA sprang into action by writing to the District Secretary of Batticaloa seeking an appointment to discuss and resolve the conflict. As a result, LMFPA president Mr. Anura Atapattu was able to meet with District Secretary Mrs. Kalamathy Pathmarajah on 23rd of September 2020 and was able to clarify few misconceptions she had on our institutions. The main concern of the District Secretary was the interest rate charged on borrowers. She was with the opinion that the interest rates charged by MFIs was monthly rate but later we were able to make her understand that the rates are nominal and charged per annum basis.
During the discussion the District Secretary agreed to take reports from the Divisional Secretaries regarding the activities of NGO MFIs in Batticaloa and give her decision within a week.
Meanwhile LMFPA also had the opportunity to meet with Mr. Sathasivam Viyalanderan, State Minister of Postal Services and Professional Development of Journalists who is also an MP from the Batticaloa district on 22nd September 2020. During this discussion the issues that transpired in Batticaloa was the main focus and Mr. Viyalanderan was very attentive to the concerns of LMFPA on the Batticaloa incident and offered his assistance to ensure uninterrupted service by MFIs in Batticaloa district in the future.