An analysis of economic impact of microfinance programs through self help groups in Sri Lanka

Abstract

The microfinance is a tool for empowerment of poor people which could contribute for the development of the economy. The objective of this paper investigates whether the micro finance through Self Help roups would enhance economic and social empowerment of the poor people in Sri Lanka. The data were collected among Self Help Group members during the period 2009 and 2010. The results revealed that no group members were involved in any economic activities in the pre- Self Help Groups; rather they are involving only in household affairs. But, in the post-SHG almost all members involved either in business or production activities in small scale. Although there is high inequality in income distribution among the selected Self Help Groups economically empowered in the post –SHG from no income level. It is also observed, financial institutions are encouraged to micro financing through SHGs since the repayment rate is very high.