By The Pulseline News Desk
Opposition Leader Sajith Premadasa has urged the Government to introduce a targeted debt relief programme for Sri Lankans struggling with microfinance loans, claiming that more than two million people have been affected by exploitative lending practices, with women among the most vulnerable.
Addressing Parliament, Premadasa cited data from 2023 indicating that over two million people had been caught in microfinance debt traps and called for immediate financial assistance alongside stronger regulation of lending institutions.
He said microfinance was originally conceived as a poverty alleviation tool, with Nobel Peace Prize laureate Muhammad Yunus introducing the model through Bangladesh’s Grameen Bank to provide affordable credit to low-income communities with minimal collateral requirements.
However, Premadasa argued that the concept had gradually shifted towards a commercial lending model, with certain institutions imposing excessively high interest rates on financially vulnerable borrowers.
He warned that women had increasingly become targets of exploitative lending practices, leaving many struggling to repay loans and trapped in cycles of debt.
While acknowledging the Government’s efforts to introduce legislation to regulate microfinance institutions, the Opposition Leader stressed that legal reforms alone would not provide immediate relief to those already burdened by debt.
Premadasa recalled that former Finance Minister Mangala Samaraweera had introduced debt relief measures using Treasury funds to write off certain microfinance loans. He urged the Government to consider similar interventions to ease the financial burden on affected borrowers.
The Opposition Leader also raised concerns about the growing reliance on gold pawning to meet financial needs, citing figures indicating that Sri Lankans had obtained Rs. 211 billion in loans against gold jewellery during the first six months of 2026.
According to figures cited by Premadasa, outstanding gold-backed loans had reached approximately Rs. 1.1 trillion, highlighting the scale of household borrowing against personal assets.
He called for a comprehensive response combining stronger oversight of lending practices with a targeted debt relief programme, particularly for women and low-income households struggling to meet repayment obligations.
Premadasa maintained that borrowers already caught in debt traps required more than regulatory changes, urging the Government to consider direct financial interventions to prevent vulnerable households from sinking further into debt.
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