Monday, 26 April 2021 10:39

Micro finance companies defend against accusations of alleged malpractices Featured

The Lanka Micro Finance Practitioners’ Association (LMFPA) said this week it was concerned over several protests and media reports over indebtedness seemingly due to alleged malpractices of microfinance institutions.

“We are concerned about these protests and media reports because they may make a serious implication on the industry as a whole. Similar media reports appeared on several occasions in the recent past and LMFPA responded to these institutions with the good intention of finding any misdoing by any of our members and rectifying them,” the association said in a media statement.

For example, there were reports that claim there had been over 200 suicides due to microfinance; the LMFPA have requested them to provide details of such suicides to verify the facts.

Unfortunately, the parties that proclaim such a number of suicides due to microfinance, failed to support their claim with any specific information such as name of the dead person, when and where even when LMFPA inquired from them

. The biggest concern over these issues is that well-mannered institutions’ reputations that are in the LMFPA membership are being tarnished in addition to the destruction of the entire microfinance industry.

There may be loan sharks that operate in the guise of microfinance and micro credit luring many low income people into a debt trap by exploiting them.



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