Recently, Lanka Micro Finance Practitioners Association (LMFPA) launched a helpline number to entertain grievances of microcredit borrowers. Astonishingly, in this event, State Minister Shehan Semasinghe convinced the importance of the transparency of such a mechanism and legitimized the latest effort of the same alleged perpetrators without any hesitation.
LMFPA, a self-proclaimed body of Sri Lanka Micro Finance industry consisted of only 53 members while more than 1500 lenders do their business without any regulation. In the wake of certain criminal activities including harassment and extortions, LMFPA has publicly rejected such incidents and keep trying to mitigate the situation by merely addressing the issue which has developed into a humanitarian crisis in Sri Lanka.
An old helpline, but this time state-sponsored!
LNW investigations point out that this is the same helpline number that LMFPA launched 2 years back. At that time they publicized the effort with paper advertisements in weekly newspapers and despite all efforts, they were unable to receive a single complaint against them.
Urging victims of harassment to lodge complaints in an alleged perpetrators' platform could be compared only to a ''horage ammagen pena aseema''. This could be compared to force victims of police torture to lodge complaints against alleged perpetrators at the same police station! With this latest effort, LMFPA does their best to project themselves as a state-sponsored professional body, although no professionalism could be observed.
Alarmingly, LMFPA will be able to legitimize their 'zero harassments argument' where they claim no harassments have been reported through their own grievances handling mechanism, hence gaining the legitimacy to justify that no harassments are taking place in the hands of MFI agents and therefore victims' rights movements could be undermined for a reason.
Perhaps the answer to the question of why the state minister is in such ignorance is under the carpet, but facts speak themselves; he needs to protect companies, not people who voted for him.
During the 55 days where microfinance victims hold a Sathyagraha in Polonnaruwa- Hingurakgoda, the state minister was unable to pay a visit to hear their voices. Up-to-date, he has not to meet microfinance victims despite several requests.
Does LMFPA manipulate the ministry?
The procedure of the customer complaint handling system has several errors on the face and conflicts of interests; the helpline operator will record calls or verbal complaints without the caller's consent, convert them to a written complaint and direct it to LMFPA. If the complaint is against one of their few members (while terminating the membership of 12 members in June they still claim that they have the same membership of 53) they will take an action within 2 weeks and if not, they will direct complaints to the state ministry.
Furthermore, there is no evidence to establish that the helpline is handled by the state ministry, implying that this is a sole private business. And LNW observes that this helpline is established at the premises of LMFPA office in Boralesgamuwa.
LMFPA is not a state body but now the state minister has paved a further way to recognize them as state-sponsored.
Micro Finance Industry in Sri Lanka has to be regularized through the apex body ie. Central Bank, not through a private actor. The outcome of such efforts will meet dire consequences without touching ground realities. As we are well aware CBSL has its own customer complaint handling system if the state minister intends to strengthen such mechanisms.
In this complicated backdrop, we urge the State Minister to intervene in the crisis with a more constructive approach, because we still believe that State Minister Shehan Semasinghe is willing to act in good faith for the sake of the industry.
We are well aware that LMFPA has entrusted the promotion and maintenance of this support call system to a multinational global advertising company operating in Sri Lanka. We could have given you positive publicity if you allocate that funds to write off loans or interest of at least a handful of borrowers other than further risking depositors and borrowers!
Special Thanks to : Nelumyaya Foundation