Credit counselling for borrowers in distress
Filling a vital gap in debt management services, the Sri Lanka Banks'
Association is launching a social initiative in the form of a Credit
Counselling Centre commencing January 19, 2009. Aptly titled "Upadeshana",
the centre will be located at the Central Bank's Centre for Banking
Studies in Rajagiriya with services extended at locations in provincial
towns.
Borrowers who are facing difficulty with their payments will have a
team of specially trained advisors with skill, understanding and
knowledge in banking and finance to help them manage their funds and
repayments and get back on track.
Their services will be made available free.
"The need for Credit Counselling is being strongly felt in this
country and financial management is relevant to both individuals who
borrow and institutions that lend", said the Secretary General of the
SLBA Upali de Silva.
The service will be a boon for small and medium scale entrepreneurs
as well as individuals who have obtained personal loans or credit card
facilities without much thought of the practical aspects of paying back.
The "Upadeshana" Centre will help defaulters to review their
financial situation and come up with a viable solution to meet their
obligations. What they will not do however is to get loans negated or
waived. Nor will the Counselling Service make recommendations of various
credit schemes on offer.
The service is primarily to get the borrower to re-look at his or her
resources and re-channel them in a way that would get the payments and
business back on track.
"The service comes at a time where there is global concern about
credit and financial stability", said Ms. Siromi Wickramasinghe who will
head the Upadeshana Centre.
"The SLBA has the support of the Central Bank as a part of an
endeavour to strengthen Sri Lanka's financial services sector."
Assistant Governor of the Central Bank Ms. Rose Cooray, speaking of
the need to provide "financial education" for borrowers said: "The
Central Bank has identified the concept of credit counselling as a vital
step in helping both the membership of the Banks' Association as well as
the customers who have obtained credit and find they are unable to pay
back, perhaps because their financial circumstances have changed."
Several countries operate credit counselling services to keep
defaulting in loan repayments to a minimum.
While Sri Lanka is ahead in banking compared to other Asian
countries, till now there has been little help to minimise the
defaulting of loan repayments or the misuse of credit card facilities.
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