Peo­ple urge ur­gent end to ex­ploita­tion by mi­cro-fi­nance com­pa­nies

Sunday Times (Sri Lanka) - - NEWS -

North­ern Civil So­ci­eties (CS) urged the im­me­di­ate in­ter­ven­tion of the Cen­tral Bank ( CB) of Sri Lanka to ad­dress the con­tin­ued ex­ploita­tion of war-af­fected peo­ple by mi­cro-fi­nance com­pa­nies and unau­tho­rised fi­nan­cial in­sti­tu­tions is­su­ing loans un­der soft terms that leads to debt.

CS rep­re­sen­ta­tives met CB Gov. Dr In­dra­jit Coomaraswamy in the last two days, when the lat­ter vis­ited the North this week, and ap­prised him how vul­ner­a­ble, war-af­fected peo­ple are be­ing tar­geted and ‘trapped’ and ex­ploited by th­ese com­pa­nies.

Gov. Coomaraswamy’s visit was to re­view ru­ral level in­debt­ed­ness of stake­hold­ers in five Districts, and dis­cuss mea­sures and strate­gies to over­come the is­sues, as a pi­lot project.

Kilinochchi District Sec­re­tary Sun­tharam Aru­mainaya­ham told the Sun­day Times that he ex­plained to the CB Gov. on the cur­rent debt con­di­tion in the District, where al­most ev­ery­one who bor­rowed from fi­nance com­pa­nies are find­ing it dif­fi­cult to set­tle them.

“The top pri­or­ity of th­ese mi­cro-fi­nance com­pa­nies is not to de­velop the liveli­hood of the war-af­fected, but to ex­ploit them even fur­ther, for profit.”

“The is­sue of in­debt­ed­ness also leads to other so­cial is­sues in­clud­ing fam­ily breakups due to poverty. Peo­ple are com­pelled to ob­tain more loans to set­tle other loans. Th­ese con­di­tions fi­nally lead to sui­cides,” he said, ex­plain­ing the re­cent in­crease in sui­cide at­tempts.

Gov. Coomaraswamy said the CB is for­mu­lat­ing a mech­a­nism that in­cludes ef­fec­tive, prac­ti­cal in­ter­ven­tions to ad­dress this is­sue by iden­ti­fy­ing its root causes, who are the most dis­tressed and how the CB could el­e­vate them from the cur­rent predica­ment.

"We have come to lis­ten. Our col­leagues have com­piled an ini­tial re­port which has set out broad pa­ram­e­ters of the prob­lem, mak­ing clear to us this is a se­ri­ous prob­lem which needs to be ad­dressed,” Gov. Coomaraswamy told the CS rep­re­sen­ta­tives.

"Of course, as the Reg­u­la­tor, we have cer­tain lim­i­ta­tions on what we can do. We want to fo­cus on reg­is­tered fi­nan­cial in­sti­tu­tions. How­ever, we want to try and raise the pro­file of this is­sue, so that, we can have a multi-round ap­proach to ad­dress this,” he said.

CS rep­re­sen­ta­tives, par­tic­u­larly, or­gan­i­sa­tions rep­re­sent­ing women- headed house­holds, pointed out how the vul­ner­a­ble com­mu­ni­ties are fac­ing many hard­ships.

Re­cently, the Kilinochchi District Sec­re­tariat is­sued an or­der ban­ning rep­re­sen­ta­tives of mi­cro- fi­nance com­pa­nies from vis­it­ing res­i­dences of ben­e­fi­cia­ries af­ter 5 pm, fol­low­ing com­plaints al­leg­ing mis­con­duct were lodged by women-headed fam­i­lies.

At the meet­ing with the CB Gov. yes­ter­day, Kilinochchi CS com­plained that govt au­thor­i­ties turned a blind eye to this is­sue, though it was brought to their no­tice many times in the past.

Iranaimadu Farm­ers Union Sec­re­tary Muththu Si­va­mo­han told the Gov. the CB should be held ac­count­able for the cur­rent sce­nario, as all mi­cro- fi­nance com­pa­nies are reg­is­tered un­der the CB which reg­u­lates them.

Mean­while CS rep­re­sen­ta­tives in Jaffna re­quested G o v. Coomaraswamy to in­tro­duce a mora­to­rium pe­riod that would en­able the peo­ple to re­pay their loans, once they are gain­fully em­ployed.

For­mer Vice Chan­cel­lor of Jaffna Uni­ver­sity, Pon Bala­sun­darampil­lai, who at­tended the meet­ing, told the Sun­day Times that most of the fi­nance in­sti­tu­tions in the province mis­led the pub­lic with false hopes and prom­ises end­ing in a debt trap.

“We have sought ur­gent CB in­ter­ven­tion to ad­dress this is­sue with ad­e­quate steps such as mora­to­ri­ums and ter­mi­na­tion of loans granted to drought-af­fected farm­ers. The strict reg­u­la­tion is a must,” he said.

Newspapers in English

Newspapers from Sri Lanka

© PressReader. All rights reserved.