Among several policy initiatives, the Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal recently announced plans to develop legislation which will regulate and supervise microfinance institutions.
Governor Cabraal stated his goal to increase the role of microfinance in the economy. He stated, “Increasing per capita income is not enough; distribution of wealth has to be fair, and this is why several measures would be taken to uplift rural economies and integrate the North and East with the rest of the economy.” In addition, Governor Cabraal stated his intention to expand an existing government credit guarantee program to include the small and medium-sized enterprise (SME) sector. The Central Bank’s new policies are aimed at enabling the financial sector, including microfinance, to meet the total lending target by 2012 of LKR 3.3 trillion (USD 28.8 billion) from current levels of LKR 700 billion (USD 6.1 billion).
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