Sri Lanka central bank to survey household creditworthiness

ECONOMYNEXT- An islandwide survey will be conducted to measure the creditworthiness of Sri Lankan households, the central bank said.

 
The Islandwide Household Sector Creditworthiness Survey 2019 will be conducted to improve the central bank’s macroprudential surveillance framework, an advertisement published on newspapers on August 15.
 
"The main objective of this survey is to establish a comprehensive database on the household sector information that would enable the assessment of indebtedness, debt servicing capacity of the household sector and its implications on the financial system stability."
 
The central bank in the past has warned of microfinance companies preying on previously non-banked households, especially in the former war zones in the north and east, ladening them with debt.
 
Finance Minister Mangala Samaraweera had said that even larger companies were engaging in trapping households in debt. 
 
He had said that some finance company officials would even solicitate sexual favours when female-led households were unable to repay mounting debt.
 
A number of suicides have also been reported of those who were not able to repay loans.
 
The government wrote off 1.4 billion rupees in loans held by 45,000 women, mostly from the former war zones, to help them escape the microfinance trap.
 
The central bank has now capped microfinance lending rates, and is in the process of further regulating the microfinance industry.
 
The central bank said that the survey will be outsourced.
 
Firms experienced in islandwide surveys were invited to bid for the program, with a deadline of September 04. (Colombo/ Aug 15/ 2019)