Microfinance Services and Performance of Micro Entrepreneurs: A Study of Pilimathalawa Area

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.