Opposition Leader Sajith Premadasa has called on the government to introduce a practical relief programme for Sri Lankans struggling with microfinance debt, claiming that more than two million people have fallen into debt traps.
Addressing Parliament, Premadasa said data from 2023 indicated that over two million people had been affected by exploitative microfinance lending practices, with women among the most vulnerable borrowers.
He said the microfinance concept, originally introduced by Nobel Peace Prize laureate Muhammad Yunus through Bangladesh’s Grameen Bank, was intended to alleviate poverty by providing affordable loans with minimal collateral requirements.
However, Premadasa claimed that the system had gradually evolved into a commercial business model, with some lenders charging excessively high interest rates and targeting financially vulnerable communities.
The Opposition Leader said women had increasingly become targets of such lending practices, leaving many trapped in cycles of debt.
While acknowledging the government’s efforts to introduce new legislation to regulate microfinance institutions, Premadasa stressed that legal reforms alone would not provide immediate relief to affected borrowers.
He recalled that former Finance Minister Mangala Samaraweera had introduced debt relief measures using Treasury funds to write off certain microfinance loans.
Premadasa urged the government to consider similar measures to provide meaningful financial assistance to borrowers struggling with repayment.
He also raised concerns about the increasing reliance on pawning gold jewellery to obtain loans.
According to figures cited by Premadasa, Sri Lankans obtained Rs. 211 billion in loans by pawning gold during the first six months of 2026, while outstanding loans had reached approximately Rs. 1.1 trillion.
The Opposition Leader called for stronger regulation of exploitative lending practices alongside a targeted debt relief programme, particularly for women and low-income households affected by microfinance debt. (Newswire)