FINANCIAL CHRONICLE – A parliamentary committee has granted approval to Sri Lanka’s Microfinance and Credit Regulatory Authority Bill, which aims to regulate money lending activities. The bill’s primary objective is to establish the Sri Lanka Microfinance and Credit Regulatory Authority. This new entity will oversee money lending and microfinance businesses, safeguard customers involved in these activities, and repeal the existing Microfinance Act, No. 6 of 2016.

The initial draft of this bill, introduced in 2024, faced a challenge in the Supreme Court. According to a statement from Parliament, “The authority to be established under this bill will issue licenses to and regulate persons engaged in money lending and microfinance businesses.” It further emphasizes that “No person may conduct a money lending business without a license issued by the Authority.”

The authority will also be endowed with statutory powers to determine maximum interest rates in both the lending and deposit sectors. The Committee on Public Finance (COPF) has advised officials to “exercise such powers in a manner that preserves the nature of the various financial instruments used by microfinance institutions for savings and lending activities.”

(Colombo/Feb16/2026)