When setting up a business in Sri Lanka’s financial services sector, it is important to clearly understand the legal and operational differences between Micro Credit Companies and Finance Companies. At 360 Accountants, we provide expert guidance and registration services to help you navigate this space — especially if you are considering launching a Micro Credit Company.
What is a Micro Credit Company?
A Micro Credit Company (MCC) is a business that provides small-scale lending services, such as daily loans and short-term credit facilities, typically to individuals and small businesses. One of the key features of an MCC is that it uses the owners’ funds or private capital to issue these loans. Importantly, Micro Credit Companies:
✅ Do not collect public deposits
✅ Do not rely on third-party funds for lending
✅ Are not required to obtain approval from the Central Bank of Sri Lanka
✅ Are not classified as licensed financial institutions
Because MCCs use their own capital to provide loans and do not take deposits from the general public, they operate with far fewer regulatory restrictions compared to finance companies. This makes MCCs an attractive option for entrepreneurs looking to enter the informal lending sector legally.
What is a Finance Company?
In contrast, Finance Companies in Sri Lanka are highly regulated and are required to operate under licenses granted by the Central Bank of Sri Lanka. Finance Companies:
✅ Collect deposits from the public
✅ Lend money based on public funds
✅ Are subject to strict regulatory oversight and compliance
✅ Must meet specific capital adequacy and liquidity requirements
Because these companies handle public money, they are continuously monitored and audited by the Central Bank to ensure financial stability and consumer protection.
Why Choose a Micro Credit Company?
If you want to operate a simple lending business using your own funds and without the burden of Central Bank licensing, a Micro Credit Company is an ideal choice. It offers flexibility in providing loans to clients, particularly in the daily loan market, small business sector, and underserved communities.
How We Can Help
At 360 Accountants, we specialize in Micro Credit Company registration in Sri Lanka. Our experienced team will guide you through the legal requirements, prepare the necessary documents, and handle the registration process to ensure your business is compliant with Sri Lankan regulations.
Whether you are a local entrepreneur or an investor looking to enter the microfinance sector, we make the process simple and hassle-free.
