Draft Law to Monitor Microfinance – Deputy Minister Anil Fernando

13-Nov-2025

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A draft law to establish a Microfinance Regulatory Authority has been prepared and will soon be presented to Parliament, said Deputy Minister of Finance, Planning and Economic Development Anil Fernando.

He made this statement during the question-and-answer session in Parliament on November 11, in response to questions raised by TNA MP S. Sritharan.

He said that in the Northern Province there are 28 state banks, 38 private banks, 78 financial institutions, and 13 licensed microfinance institutions.

He added that the interest rates charged by these institutions are regulated by the Central Bank of Sri Lanka, and that as of September 2025, licensed microfinance institutions were charging annual rates between 22.69% and 39.40%.

He stated that reports of suicides due to inhumane practices by microfinance firms in the North and East were unsubstantiated.

Under existing financial laws—namely the Financial Business Act No.42 of 2011, Finance Leasing Act No.56 of 2000, Microfinance Act No.6 of 2016, and Central Bank Act No.16 of 2023—the supervision of financial and leasing companies lies with the Department of Supervision of Non-Bank Financial Institutions, not the banks themselves.

Accordingly, the proposed Microfinance Regulatory Authority Bill will provide a proper mechanism to monitor Central Bank-registered financial institutions.