Abstract
This research studies the impact of microfinance services on the entrepreneurial success of users of such services who are mostly women of the lowest income categories. Three microfinance financial services namely, microcredit, micro-savings and micro-insurance have been identified through literature among other non -financial services. In this study, researcher has studied only the influence of financial services of microfinance on entrepreneurial success of women entrepreneurs. An empirical investigation is carried out among a sample of 464 women receiving microfinance services, selected using stratified random sampling technique. The data were collected using a structured questionnaire through face to face interviews. The statistical package for social sciences (SPSS) (version 21) is employed to test the relationships between these microfinance services and entrepreneurial success. The sample of this study captures only the women entrepreneurs from Non-Bank Financial Institutions (NBFIs) registered with the Central Bank of Sri Lanka. The results have discovered that microcredit and micro-savings have a positive relationship with entrepreneurial success of women, while micro-insurance has not shown such a relationship. These findings can be helpful to the policy makers in developing the microfinance sector and microfinance institutions to design their service offers. The research identifies some important areas for future research as well. Key words: Microfinance, microfinance services, microfinance institutions, entrepreneurial success.
Highlights
The existence of microfinance as a means of supporting the poor, dates as far back as eighteenth and nineteenth century
The results have discovered that microcredit and micro-savings have a positive relationship with entrepreneurial success of women, while microinsurance has not shown such a relationship
The questionnaire was piloted among 40 female recipients who are receiving microfinance services from Non-Bank Financial Institutions (NBFIs) registered with the Central Bank of Sri Lanka
Summary
The existence of microfinance as a means of supporting the poor, dates as far back as eighteenth and nineteenth century. Littlefield and Rosenberg (2004) on the same subject, conclude that the microfinance institutions (MFIs) have undertaken to fulfill the market needs of the economically active low income people who generally do not belong to the formal financial sector By bridging this gap in the market in a financially sustainable manner, MFIs have become part of the formal financial system of their respective countries. The practitioners and researchers have different viewpoints on the range of services and target recipients of microfinance These financial services are offered to lower income clients, generally communities, with the object of supporting economic development through the growth of entrepreneurial activity (Bruton et al, 2011; Khavul et al, 2013). According to the Census and Statistics Department of Sri Lanka (CSD) in 2013, the women account for 51.8% of the population in Sri Lanka The majority of these women belong to low income category and 14.5% are below the poverty line. The services of microfinance can be clearly categorized into two areas, namely, financial and non-financial and this study is limited only to the impact of financial services on the entrepreneurial success of poor women
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