The impact of micro credit programme on rural women livelihood development: A study of Bulathsinhala DS division in Sri Lanka

Abstract

Micro credit (MC) is a financial service include under micro finance which is provide by consultative group to assist low income people. In global context, it is a very popular credit scheme among people who don't have access to formal financial services and most of them are women. However, this study tried to find the impact of Micro Credit programme on rural women livelihood development in Sri Lanka. The study conducted under main three objectives. Firstly, identify the Micro Credit client base and their intention of granting of Micro Credit loans. Then analyse the impact of Micro Credit loans on rural women livelihood development. Finally, provide suggestions and recommendations to improve effectiveness of credit programme in Sri Lanka. As the way to continue the study 50 Micro Credit women clients were selected from Bulathsinhala DS division by using simple random sampling technique. Then the data collected through structured questionnaires and interviews were analysed by using descriptive and inferential statistical analysis methods. According to the findings of the study, due to on-time & easy access to Micro Credit loans, people tend to use Micro Credit irrespective of the high-interest rate. Anyhow, Micro Credit has not helped to improve the livelihood and living standard of the rural women in the study area. Instead of that, their debtness was increased. Reasons for that were lack of financial literacy knowledge of women and miss utilization for recover previous loan premiums and for family consumption without a proper investment plan. Therefore, the study suggests responsible authorities to create accessible credit schemes for rural women & Micro credit institutions to create evaluating & monitoring process as an after care service of loans & organize programme to improve their client’s Financial Literacy knowledge to create an effective rural Micro Credit programme within Sri Lankan context.