Justice Minister unveils plan to tame microfinance organisations through new legislative framework

Minister of Justice, Prison Affairs and Constitutional Reforms, Dr. Wijeyadasa Rajapakshe, on Monday, unveiled a plan to introduce a new legislative framework to regulate microfinance institutions in the country.

The Minister told a press conference that a large number of unregistered microfinance outfits operated and the unregulated proliferation of such firms was a serious problem.

Rajapakshe said there was a pressing need to establish a dedicated regulatory body, separate from the Central Bank, to oversee and govern microfinance organisations.

Comprehensive laws would be brought in soon to regulate these entities and mitigate the potential adverse effects they pose to the country’s economic stability, he said.

State Minister of Finance Ranjith Siyambalapitiya said recently about 11,000 microfinance bodies were operating in the country, but only five of them had been registered.

Minister Rajapakshe said 21 institutions covering diverse subjects like law enforcement and reform were under his purview. Sri Lanka faced a challenge with over 1.1 million pending court cases due to the absence of globally accepted methods for resolving them, he added.

Efforts were being made to tackle delays in resolving cases, crucial for effective justice administration. A new law aimed at expediting criminal case resolutions was being made and it would be presented to Parliament soon, the minister said, emphasising the need to move beyond incarceration for minor offences.

Regarding the Office of Missing Persons, progress had been significant, with 4,795 investigations completed out of 14,000 complaints, compared to only 62 when he assumed office, Minister Rajapakshe said.

Plans included forming reconciliation societies in villages guided by local elders and religious leaders. Those organisations would take charge of community initiatives like infrastructure development, cultural events, and more for fostering a sense of collective ownership and participation, he said.

“The ultimate goal is to unite Grama Seva Divisions into a self-sufficient network, safeguarding village welfare and preserving community well-being, free from external influence,” said Dr. Rajapakshe.