The Microfinance and Credit Regulatory Authority Bill has been reviewed and approved by the Committee on Public Finance. This decision was made during a meeting held in Parliament on February 10, 2026, under the leadership of Hon. Member of Parliament Dr. Harsha de Silva. The meeting saw the participation of Hon. Deputy Ministers Chathuranga Abeysinghe, Dr. Kaushalya Ariyaratne, and Nishantha Jayaweera, alongside Hon. Members of Parliament Attorney-at-Law Rauff Hakeem and Nimal Palihena.
The Bill aims to establish the Sri Lanka Microfinance and Credit Regulatory Authority, regulate money lending and microfinance businesses, protect consumers involved in these sectors, repeal the Microfinance Act No. 6 of 2016, and address related issues. The Committee Chair noted that the Bill, initially presented in 2024, had faced challenges in the Supreme Court regarding constitutional inconsistencies, which appear to have been resolved in the current draft. The Committee commended the Bill, which was formulated after consulting all relevant stakeholders.
Officials explained that the new Authority will be responsible for licensing and regulating individuals and entities engaged in money lending and microfinance activities. The Authority will operate under the governance of a Board of Directors. It was emphasized that no individual may legally conduct a money lending business without obtaining a license from the Authority.
The Committee sought clarification on whether online lending would be included under the Authority’s jurisdiction. Officials confirmed that online lending could only be conducted by licensed entities, highlighting that consumer protection is a primary focus of the Bill.
Discussions also addressed whether the Bill adequately supports the social empowerment role of community-based financial institutions, potentially through relaxed regulatory fees or simplified compliance requirements. The Committee identified practical operational issues and consumer protection as areas requiring further attention.
Officials clarified that certain lenders, including e-commerce operators, would not be covered by this Act. In light of existing public skepticism and uncertainty regarding legislative reforms, the Committee recommended that the Ministry of Finance, Planning, and Economic Development implement effective communication programs to enhance public and stakeholder awareness. An initial step suggested by the Committee was the publication of a Frequently Asked Questions (FAQs) document.
The Authority will have statutory powers to set maximum interest rates for both lending and deposit activities. The Committee advised that these powers be exercised in a way that maintains the integrity of the financial instruments utilized by microfinance institutions for savings and lending.
The potential delegation of certain powers to Divisional Secretariat offices was extensively discussed. Officials indicated that small-scale lenders would not need to travel to Colombo to engage with the Authority, as limited powers related to routine functions, such as processing applications, would be delegated to the Divisional Secretariat level. The Committee stressed the importance of a robust information technology system to ensure the efficient implementation of this process.
During the same meeting, the Committee also reviewed and approved the Resolution published in Extraordinary Gazette No. 2464/15 under the Customs Ordinance (Chapter 235), along with three Orders issued under the Special Commodity Levy Act.
