A petition lodged by Transparency International Sri Lanka, challenging the Microfinance & Credit Regulatory Authority Bill, is set to be heard in the Supreme Court on January 24th, raising concerns over the proposed legislation's inadequacy in addressing exploitative practices at the grassroots level.
The bill, placed on Parliament's Order Paper on January 9, 2024, has faced criticism for its perceived failure to introduce effective measures to curb exploitation and exorbitant interest rates practiced by lenders targeting vulnerable communities.
Transparency International Sri Lanka argues in its petition that the bill lacks compliance with fundamental principles such as reasonability, proportionality, natural justice, separation of powers, and legal certainty. It further asserts violations of constitutional articles, specifically Article 83, when read in conjunction with Articles 3 and 4.
The petition contends that individuals in microfinance schemes, particularly women, face exploitative practices, including sexual exploitation, harassment, and intimidation, as well as exorbitant interest rates.
Moreover, the bill's exclusion of certain entities dominating the microfinance industry, such as licensed commercial banks and finance companies, raises concerns about its comprehensive regulatory scope.
Additionally, the petition criticizes provisions that grant undue discretion to the Minister, allowing exemptions and specifying persons who may engage in money lending without a license from the Microfinance and Credit Authority. This discretion, the petition argues, contributes to the bill's failure to adequately regulate all institutions involved in microfinance activities.
The bill's alleged infringement on the right to information, as outlined in Article 14A of the Constitution and Article 65 of the Right to Information Act, is another point of contention raised by Transparency International Sri Lanka.
The petition, therefore, calls on the Supreme Court to assess the constitutionality of the Microfinance & Credit Regulatory Authority Bill, raising questions about its potential shortcomings in addressing the complex issues prevalent in the microfinance sector.
Read more from TISL here.
