Micro finance and poverty alleviation in Sri Lanka

Abstract

Microfinance services in Sri Lanka have a wide geographical outreach but the extent of outreach of private operators including NGOs and commercial banks in rural areas is rather limited although the poor and the poorest groups have been reached by these Institutions. Most of people prefer the MFI rather than the banks. Because, they can easily access the loans from MFI. The objective of this research is to provide further evidence on the contribution of micro finance for poverty alleviation in Sri Lanka. In this regards, a survey was conducted among the selected micro finance beneficiaries from Polonnaruwa District of North Central Province in Sri Lanka. The collected data were analyzed using statistical software and found that the micro finance programs significantly help to poor people to uplift their live which lead for the poverty alleviation in Sri Lanka. However, microfinance facilities are no 'magic bullet‘ for poverty reduction. Many other changes are also needed. Finally, it is noted that there is a significant relationship between the micro finance and poverty alleviation in a certain level of percentage.