Industry body seeks government intervention to tame errant microfinance practitioners

„Wants govt. to formulate micro credit policy framework „Calls for urgent implementation of Microfinance Act

The Lanka Microfinance Practitioners’ Association (LMFPA) yesterday called for government intervention to formulate a national micro credit policy framework to regulate over 1000 micro finance businesses as concerns over indebtedness caused by microfinance companies comes under spotlight.

Addressing the launch event of a code of conduct for microfinance practitioners yesterday, in Colombo, LMFPA President Imran Nafeer said intervention of the policy makers is a must in the microfinance sector in the present context.

“We have various types of institutions practicing micro credit, regulated or unregulated. We solely believe these institutions need to be regulated and need to come under one national policy framework,” he said.

LMFPA aims to self-regulate its 76 members through the code of conduct, particularly avoiding

over indebtedness, maintaining transparency, promoting good recovery practices and maintaining healthy competition. Nafeer noted that an independent board would investigate the complaints lodged against its members and will take punitive action against errant members by terminating their membership if they continue to breach the code of conduct and same will be advertised in print media to inform the public. Addressing the gathering, the State Minister of National Policies and

Economic Affairs Dr. Harsha de Silva who was the chief guest at the launch event agreed with Nafeer’s sentiments stressed the need for “some regulatory mechanism,” to avoid the creation of loan sharks.