The Microfinance and Credit Regulatory Authority Bill was approved by the Committee on Public Finance (COPF) at a meeting held in Parliament on Feb. 10, 2026.
The meeting was chaired by MP Dr. Harsha de Silva, with the participation of Deputy Ministers Chathuranga Abeysinghe, Dr. Kaushalya Ariyaratne and Nishantha Jayaweera, and Members of Parliament Rauff Hakeem and Nimal Palihena.
The Bill seeks to establish the Sri Lanka Microfinance and Credit Regulatory Authority to regulate money lending and microfinance businesses and to protect customers engaged in such activities. It also provides for the repeal of the Microfinance Act, No. 6 of 2016.
The committee chair said the original draft of the Bill, presented in 2024, had been challenged before the Supreme Court. He said constitutional inconsistencies identified by the court appear to have been addressed in the revised draft, which was prepared after consulting stakeholders.
Officials told the committee that the proposed authority will license and regulate individuals and entities engaged in money lending and microfinance businesses. The authority will be governed by a board of directors, and no person will be permitted to conduct a money lending business without a license. Online lending activities will also require licensing.
Officials said customer protection is a primary objective of the Bill. However, certain lenders, including e-commerce operators, will not fall within the scope of the Act.
The committee also discussed whether the Bill sufficiently addresses the social empowerment role of community-based financial institutions, including the possibility of relaxed regulatory fees or simplified compliance requirements. Operational challenges and consumer protection were identified as areas requiring further attention.
Given public concern over legislative reforms, the committee recommended that the Ministry of Finance, Planning and Economic Development conduct awareness programs for stakeholders. As an initial measure, it proposed publishing a set of frequently asked questions.
As the proposed authority will have statutory powers to determine maximum interest rates in lending and deposit sectors, the committee advised that such powers be exercised in a manner that preserves the characteristics of financial instruments used by microfinance institutions.
The delegation of certain powers to Divisional Secretariat offices was also discussed. Officials said small-scale lenders would not be required to travel to Colombo to engage with the authority, as limited administrative functions, including processing applications, would be handled at the Divisional Secretariat level. The committee stressed the need for a robust information technology system to support the process.
At the same meeting, the committee also approved a resolution published in Extraordinary Gazette No. 2464/15 under the Customs Ordinance (Chapter 235) and three orders issued under the Special Commodity Levy Act. (Newswire)