By: Staff Writer

Colombo (LNW): Government is to regulate Sri Lanka’s microfinance sector as only 5 institutions have been registered out of around 11,000 microfinance institutions operating in the country says the Minister of State for Finance, Ranjith Siyambalapitiya.

The Minister disclosed that steps will be taken to implement a separate authority to regulate the microfinance institutions.

The Minister pointed out that the rural low-income people are the most affected by these institutions, which are operating without regulation, and about 3 million people are affected by various inconveniences.

Saying that this problem has now reached the international level, Mr. Siyambalapitiya mentioned that new laws will be brought to regulate the microfinance sector.

However, he further noted that operating such micro-finance institutions that do not fulfill the legal requirement is an offense punishable by a fine of 5 million rupees and imprisonment of 5 years.

The government reiterates the need of a legal framework to regulate unregulated money lending activities so that a better and more effective regulatory environment is created for money lending institutions in the future.

A suggestion has been made to amend the Microfinance Act No. 6 of 2016 to suit the current development and financial issues.

The State Ministry for Micro Finance will appoint a special committee to look into grievances and gather information of borrowers who have already fallen into the micro finance debt trap.

It will make recommendations and find remedies to financial problems faced by rural poor as soon as possible, a senior ministry official said.

State Minister Shehan Semasinghe revealed at meeting of officials that the micro finance committee comprising officers from the Treasury, Central Bank, State Ministry of Micro Finance, and representatives of money-lending institutions will collect all data relating to the present situation of the business and submit a report soon.

For over a decade the Central Bank has tried to regularise the microfinance sector in the country and finally on July 15, 2016, the Microfinance Act No. 6 of 2016 was introduced.

It has enacted a direction to curtail the interest rates charged from the borrowers by Licensed Finance Companies (LFCs).

The Act has provision for the creation of a Credit Regulatory Authority to provide for the regulation of the money lending and the microfinance businesses and to provide for matters connected to it, including protection of customers of said businesses.

The main objectives of the Authority is to regulate and supervise licensed moneylenders; licensed microfinance institutions, coordination with regulatory authorities of Co-operatives, Samurdhi community development banks and entities formed under the Agrarian Development Act.

However, the problem is much larger and complex than on the surface and it is essential to take several corrective measures to stabilise the industry, financial experts said.

Micro finance lending involving banks and finance and leasing companies has become a complex problem in Sri Lanka, the experts said adding that patch work solutions will not help in solving this burning issue.

By: Staff Writer

Colombo (LNW): Even amidst Israel –Hamas war in Gaza strip and evacuation of Sri Lankns working there, Sri Lankan worker migration to war torn country is to continue due to economic hardships in the island nation.

Israel’s Minister of Interior Moshe Arbel and Sri Lanka’s Ambassador to Israel Nimal Bandara have signed an agreement, which will allow Israel to immediately hire 10,000 Sri Lankan farm workers.

This follows Sri Lanka cabinet approval last week allowing Israeli companies to bring 5,000 workers to the country for the agricultural sector, Israeli media reported.

Israel’s agricultural sector has been hit hard by the war. Since October 7, some 8,000 foreign agricultural workers have fled Israel out of 30,000 foreign workers in the farming sector.

During the vicious attack on October 7, Hamas terrorists slaughtered dozens of foreign workers and took several dozen hostage in Gaza.

At the same time some 20,000 Palestinian agricultural workers have been banned from entering the country, the report said.

The first Sri Lankan agricultural workers within the framework of this agreement should arrive in the coming weeks.

There are already 4,500 workers from Sri Lanka employed in Israel, most of them working in the homecare sector.

Sri Lankans stranded in war ravaged areas in Israel are now being evacuated amidst severe transport difficulties, international media reported.

Foreign Affairs Minister M.U.M. Ali Sabry appreciated the constructive role played by Qatar in opening the Rafah border crossing, which allowed hundreds of foreigners, including 11 Sri Lankans, to enter Egypt from the Gaza Strip.

While issuing a media release, the Minister thanked the State of Qatar, under the guidance of His Highness Sheikh Tamim bin Hamad Al-Thani, Emir of the State of Qatar, for its successful mediation efforts, paving the way for the release of many hostages.

During a meeting with Ali Hassan Alemadi, Charge d’Affaires of the Qatar Embassy in Colombo, the Foreign Minister conveyed Sri Lanka’s appreciation in this regard.

The evacuation of foreign passport holders and injured from Gaza through the Rafah crossing has reportedly paused since Saturday due to Israel’s targeting of an ambulance, official Egyptian sources told Reuters.

The shared crossing between Gaza and Egypt, the only way in and out of the Palestinian enclave, had opened up temporarily last week to allow the exit of hundreds of foreign passport holders and the critically wounded.

The crossing has been shut for regular traffic since the start of the war on October 7 following multiple Israeli attacks. Egypt said it requires to receive a green light from Tel Aviv to open the crossing.

On November 1, Rafah opened for the first time for evacuations following a reported Qatar-brokered deal with Egypt, Israel and Hamas, in coordination with the United States.

By: Staff Writer

Colombo (LNW): The prolonged delay in implementing a Geographical Indication (GI) law in Sri Lanka has emerged as a significant roadblock in registering local GI products including cinnamon, thereby impeding their access to the associated benefits within export value chains.

The current cinnamon production capacity of 21,000Mt, with export quantity of 19,000Mt, has the potential for expansion up to 25,000 – 30,000Mt a year.

Sri Lanka has received Geographical Indication (GI) certification from the European Union for Ceylon Cinnamon helping it to stand out from substitutes in the trade block, the Export Development Board said.

GI registration can be used to differentiate Sri Lankan Cinnamon from others has in the EU markets. ‘Ceylon Cinnamon’ can also be sold for premium prices.

Despite receiving Cabinet approval to formalise it into law, spices and allied products, exporters pointed out that procedural slowness within the Trade and Commerce Ministry and Department of Commerce has thwarted the timely dispatch of the value-added initial batch of cinnamon slated for EU markets.

The issue was brought up at the recently held 23rd Exporters Forum organised by the Export Development Board.

In February 2022, Ceylon Cinnamon secured the country’s first Geographical Indication (GI) certification and status from the European Union (EU) Commission.

“GI registration has the purpose of differentiating Ceylon Cinnamon in the EU market from its substitutes of lower quality.

GI will act as a source of competitive advantage which will help to increase market differentiation, product turnover and allow for a premium price from the consumer,” SAPPTA past Chairman Vernon Abeyratne said.

He said as part of obtaining the GI status, the Ceylon Cinnamon GI Association (CCGIA) was established representing all the stakeholders in the cinnamon industry in the country.

The responsibility of the CCGIA is to implement an internal control mechanism to monitor their members meeting the specifications stated in the GI specification document.

The participants within the cinnamon supply chain need to be registered with the CCGIA to export Ceylon Cinnamon to the EU region under the ‘Ceylon Cinnamon’ brand.

Noting that Sri Lanka’s spices and essential oil exports were $ 370.3 million in 2022, Abeyratne stated that GI-certified cinnamon exports were initially expected to account for around 1% of this total in the current year.

“Regrettably, the delay in implementing GI certification has practically neutralised this prediction, resulting in an expected loss for the sector he said

GI certification not only confers legal protection but also adds significant value to the products, enhancing the competitiveness and marketability,” he pointed out.

During the first nine months, Sri Lanka earned $ 302.68 million via spices and essential oil exports recording 9.97% year-on-year growth compared to the same period in 2022.

State Minister of Investment Promotion Dilum Amunugama assured swift action in formalising the GI law.