The 170th victim of the microfinance crisis in Sri Lanka was reported from Diyabeduma area in Polonnaruwa.
The victim, who was a father of two lived in Diyabeduma, Elakimbulawala, committed suicide by hanging due to the pressure he experienced from microfinance agents.
The victim in question, who had taken multiple loans from several microfinance institutions, had left his village and had been working at a construction site in Colombo. When he returned to his village, several loan installment collectors had verbally harassed him, and due to the heartbreak it caused, he committed suicide, the mother of the deceased told Lanka News Web.
His funeral was held in his wife’s village.
He had taken two loans, Rs 50,000 and Rs 30,000 from LOLC and one of its subsidiaries, BRAC Lanka Finance (formerly known as Nanda Investment), respectively, reliable sources said.
He was pushed to take his own life for Rs 80,000!
These two institutions, registered at the Central Bank of Sri Lanka (CBSL) and Lanka Microfinance Practitioners’ Association (LMFPA), issue microfinance loans, with valid permits. A number of incidents such institutions practicing unethical and unlawful ways to collect loan installments have been reported to Lanka News Web, and we expect to bring those to you with video proof.
The aforementioned victim had travelled to Colombo to work at a construction site with the aim of paying off his loans. It was reported that the people who collected loan installments, thinking that he had fled the village, had pressed the victim’s family members.
The government’s program to write off debts taken by people living in 12 draught affected districts has been implemented, however, only a handful of persons have been able to benefit from it.
One of the reasons is that the above-mentioned program aims at supporting people who have not paid three consecutive loan installments by 30th June 2018, and had obtained loans from microfinance institutions registered under the CBSL and LMFPA.
Approximately 2.4 million people living in rural areas of Sri Lanka are affected by the microfinance trap, and 90 per cent of them are women.
There are thousands of microfinance institutions in Sri Lanka that make astronomical profits through providing microfinance loans without any form of registration or valid permits. However, thus far, neither the Ministry of Finance nor the CBSL have been able to develop any form of methodical program to regulate those institutions.
Women victims of the microfinance crisis have planned to launch a series of protests in several parts of Sri Lanka.