The Digital Alternative Lending Association (DALA) said yesterday that they expected the NPP government to approve the Microfinance and Credit Regulatory Authority (MCRA) Bill at cabinet level soon.

The MCRA Bill was a legislative proposal intended to establish a centralized regulatory body to oversee the microfinance and money lending sectors. Introduced to address issues such as predatory lending and consumer protection, the Bill would replace the Microfinance Act No. 6 of 2016, a top DALA spokesman said.

The following are the key Provisions of the MCRA Bill:

· Establishment of the Authority: The Bill proposed the creation of the Microfinance and Credit Regulatory Authority of Sri Lanka, a corporate body responsible for licensing and supervising entities engaged in money lending and microfinance activities.

· Consumer Protection: One of the primary objectives was to safeguard borrowers from exploitative practices, including exorbitant interest rates and unethical recovery methods.

· Regulatory Oversight: The Authority would have the power to issue guidelines, conduct inspections, and enforce compliance to ensure ethical conduct among licensed institutions.

· Coordination with Other Bodies: The MCRA was to collaborate with existing financial regulatory bodies, such as the Central Bank and the Credit Information Bureau, to promote responsible lending practices.

DALA said that the enactment of MCRA Bill would benefit the online lending sector:

· Enhanced Credibility: Regulatory oversight could increase public trust in online lending platforms, encouraging more users to engage with digital financial services.

· Standardisation: The establishment of clear guidelines and licensing requirements would help standardize operations across the industry, reducing the prevalence of unscrupulous actors.

· Access to Credit Information: By integrating with the Credit Information Bureau, online lenders could better assess borrower creditworthiness, leading to more informed lending decisions and reduced default rates.

· Consumer Confidence: With mechanisms in place for grievance redressal and consumer education, borrowers might feel more secure using online lending services.

DALA consists of forward-thinking lenders, fintech pioneers, and technology enablers, united by a common mission: to redefine access to capital through digital-first, inclusive, and responsible lending solutions.

DALA is a non-profit organization based in Sri Lanka, established under the Companies Act No. 7 of 2007. It serves as the country’s sole self-regulatory body for digital lending service providers, aiming to promote ethical business practices and support the sustainable growth of the digital lending industry.

DALA spokesman said that they support money lending organisations by promoting self-regulation and ethical standards. “We provide a framework for self-governance among its members, ensuring that digital lending practices are conducted ethically and in compliance with Sri Lankan laws. This helps build trust with consumers and regulators.”

The spokesman said that the association represents the collective interests of its members in discussions with government bodies and regulatory authorities, advocating for policies that support the digital lending sector.

DALA also functions as a knowledge base, facilitating the exchange of market updates and best practices among members. This collaborative environment helps organisations stay informed and address industry challenges collectively (SF)