Sri Lanka’s rural poor including women are to be rescued from micro finance debt trap under a special loan scheme of the present government Finance Ministry announced.
This loan scheme has been implemented through Co-operative Rural Banks and Thrift and Credit Co-operative Societies to provide relief to low income people who have obtained loans from various micro finance institutions.
Micro Finance Companies (MFCs) are like leeches that suck blood of the poor people’s livelihood income, and consequently, the rural economy is in a serious state of indebtedness unable to repay their micro loans.
This indebtedness malady is reported to be so critical that the vulnerable rural farming community, especially women who were mercilessly exploited by the MFCs, have been prompted to sell their properties as a last resort.
Several suicides have been reported in rural areas in the North owing to pressure exerted by MFCs to recover their debts without valuing the lives of the people.
. The Treasury has released Rs. 542 million and it operates as a revolving fund. It has been decided by the government to continue the loan program, increasing the maximum credit limit to Rs.60, 000/- per person.
The low interest loans are being provided to indebted people in North and North Central provinces.
The treasury has already allocated Rs.292 million for Northern province and a sum of Rs250 million for North Central province to Co-operative Rural Banks and Thrift and Credit Co-operative Societies.
It has been estimated that around 14,000 people in the North Central province are suffering as they have fallen into the micro finance debt trap.
Ony227 people in the province have been received the government loan facility up to the maximum of Rs.40, 000.
The annual interest rate has been brought down to 9 percent from 14 percent.
(LI)