Micro Finance Act, Samurdhi to be amalgamated soon

The Government intends to mediate to provide solutions that benefit low income earners but not to jeopardise or derail schemes of the private micro finance sector, said the State Minister of Samurdhi, Household Economy, Micro Finance, SelfEmployment and Business Development Shehan Semasinghe at a webinar held in Colombo this week.

It was organised by the Microfinance Industry in Sri Lanka. However the Minister cautioned that some micro finance companies act contrary to micro finance regulations. “There have been instances where people living in Kebithigollewa have complained that they have borrowed money at a high interest rate of 26-30 per cent from micro finance companies in the past,” he said.

The Micro Finance Act has been interpreted by some companies to suit their own needs, he said. Amalgamating the Samurdhi scheme along with this Act is in the pipeline so that low income earners can be provided funds at low interest rates to start businesses. The state now welcomes suggestions regarding future amendments to the Micro Finance Act from micro finance companies.

Managing Director, Hambantota Women’s Development Federation, Sriyani Mangalika said that their organisation which was launched three decades ago is now linked to 12 “Pradeshiya Lekam” divisions in the Hambantota district and to five districts in the Moneragala area where micro finance money is disbursed among the poor women in the district. There are 85,000 women members in their federation.

Meanwhile over 139,000 families that belong to members of the federation do business with the federation at present. The Janashakthi Bank launched by the federation is another notable feature where 85,000 members are provided with 25 per cent of the profits of the bank at the end of each year. The other profits are utilised to rehabilitate persons affected by drugs.

Assistant Governor, Central Bank of Sri Lanka J.P.R. Karunaratne said the Central Bank had initiated a number of schemes through their regional offices to facilitate disbursement of loans to SME and the micro finance sectors.

“It is the SME and the micro finance sectors that contribute mainly to the development of the rural economy. The Central Bank has already drafted a national policy with regard to a micro finance strategy which is nearing completion. This will help to solve a numbers of problems affecting the micro finance sectors. What is essential at this juncture is to compile a data network with regard to prevalent micro finance schemes.”

President of the Lanka Microfinance Practitioners Anura Atapattu also spoke. Development Finance Consultant Iran Nafeer conducted the webinar.