Fitch ratings agency warns that the increased exposure to microfinance at Sri Lankan non-bank financial institutions (NBFIs) could pose a risk to their credit profiles; exposure has risen from 4% in March 2014 to 27% in December 2015. Fitch is concerned that lending to this segment is more susceptible to asset-quality deterioration during periods of economic stress. The government and its lenders have been working on an ambitious plan for micro-financing since 2009, when it launched the Grameen Bank as part of efforts to improve access to credit.
Fitch ratings agency warns that the increased exposure to microfinance at Sri Lankan non-bank financial institutions (NBFIs) could pose a risk to their credit profiles; exposure has risen from 4% in March 2014 to 27% in December 2015. Fitch is concerned that lending to this segment is more susceptible to asset-quality deterioration during periods of economic stress. Furthermore, Sri Lanka lacks a comprehensive regulatory and supervisory system for the microfinance sector, meaning that many of the large number of companies engaged in the provision of micro-finance are unregulated.