Abstract
Microfinance has evolved as an economic development approach and intended to benefit low-income women and men. The term refers to the provision of financial services to low-income clients, including the selfemployed. Financial services generally include savings and credit; however, some microfinance organizations also provide insurance and payment services. This study examines the influence of microfinance services on the performance of micro entrepreneurs in Pilimathalawa area. 100 micro entrepreneurs who received the benefits from the Samurdhi Bank were selected as sample in this study purpose. The microfinance services – micro-credit, micro-savings, and micro-training were considered as independent variables and the entrepreneurs’ performance was considered as dependent variables of the study. Data were collected through issuing structured questionnaire to the respondents and analyzed using SPSS version 20. The Correlation analysis, Regression analysis and factor analysis were done to influence of financial services on performance of micro entrepreneurs. The results of the present study indicated that the microfinance services had the significant positive relationship with the entrepreneurs’ performance and the microfinance services – micro-credit, micro-saving, and micro-finance have highly impact on the performance of entrepreneurs. Finally, the microfinance services – credits, saving, and training - had highly effect on the performance of the micro entrepreneurs. Further, the study revealed that the micro-savings has most important to the micro entrepreneurs in the Pilimathalawa area in Sri Lanka.
Highlights
Microfinance has evolved as an economic development approach to intend to benefit low-income women and men
It is a statistical tool used to determine the probable change in one variable for the given amount of another variable and factor analysis were done for ranking the microfinance services to the micro entrepreneurs
Before analysing the variables in detail and testing the hypothesis, a reliability test was done by the researchers to examine whether the data available is fit for analysis or not
Summary
Microfinance has evolved as an economic development approach to intend to benefit low-income women and men. The term refers to the provision of financial services to low-income clients, including the self-employed. Financial services generally include savings and credit. Some microfinance organizations provide insurance and payment services. In addition to the financial intermediation, many MFIs provide social intermediation services such as group formation, development of self-confidence, and training in financial literacy and management capabilities among members of a group. MFIs can be nongovernmental organizations (NGOs), savings and loan cooperatives, credit unions, government banks, commercial banks, or nonbank financial institutions. Microfinance clients are typically self-employed, lowincome entrepreneurs in both urban and rural areas
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