14 police complaints within 2 days against LOLC Micro Financing

14 police complaints within 2 days against LOLC Micro Financing

23 May 2021 10:58 am

14 police complaints have been lodged by microfinance victims against LOLC Finance Limited and its subsidiaries within 2 days.

On the 20th and 21st of May, those complaints were lodged by victims in Polonnaruwa District, assisted by the lawyers engaged with Nelumyaya Foundation, Colombo.

In some cases, it was reported that LOLC collectors were present immediately when complaints were made, with possible assistance and inside information from the police station itself. And also in some cases, it was reported that several police officers tried to settle the case, refusing to write down complaints. However, those illegal efforts were restrained with the intervention of the lawyer.   

LOLC Finance Limited, LOLC Development Finance and BRAC Lanka Finance (a member of LOLC) remain as major culprits of the microfinance debt trap, alleged for excessive interest rates associated with harassment.

According to the Director Programmes of Nelumyaya Foundation, Attorney-at-Law Radika Gunaratne, forms of harassments that could be amounted to criminal offences vary from verbal intimidations to extortion. Most of the ongoing cases are related to informal guarantees such as holding registration documents of guarantees and in some cases deeds of state lands, she further added.   

If justice would not be served by the police mechanism for victims Nelumyaya Foundation will initiate legal actions against LOLC with criminal liability, Attorney Radika told to Lanka News Web.

In some cases, notwithstanding the settlements entered before police, LOLC does not comply and has threatened victims for seeking legal assistance.

According to its website, Lanka Microfinance Practitioners' Association (LMPA) is the sole representative of Sri Lanka Micro The finance industry recognized by CBSL. However, although LMPA tends to criticize Finance Companies such as LOLC for doing micro-financing off the screen, the Association works closely with LOLC according to an undisclosed source.     

- Amali Jayaweera