The Cabinet has approved a proposal to establish a ‘Credit Regulatory Authority’ as an independent legal body to regulate microfinance and lending firms in Sri Lanka.
Due to the practical difficulties in meeting the objectives of the Microfinance Act No. 6 of 2016, regulating and monitoring the financial lending business in Sri Lanka and to bring regulation of consumer protection, market manipulation and all microfinance institutions that do not accept savings deposits under a single regulation.
The proposal was made by the Minister of Finance to cancel the current microfinance Act and establish the Credit Regulatory Authority through an Act of Parliament.
Microfinance has become controversial as misinformed borrowers fell into difficulties due to lending companies charging tme interest rates they cannot afford.