Microfinance as a Strategy of Empowering the Conflict-Affected Communities in Sri Lanka

The objective of this paper is to assess the capability of microfinance as a tool of reconciliation through economic activity generation and empowerment in the conflict-affected communities in the Northern and Eastern regions of Sri Lanka. The principal data collection tools for this study were Focus Group Discussions and Key Informant Interviews. The impact of microfinance engagement is in varying degrees with certain areas and groups showing evidence of receiving more beneficial impacts compared to others. It also showed very high involvement of women and those women who are active namely, those from groups above the very poor and those who have comparatively better educational levels. We found that microfinance intervention has both tangible and also created other intangible benefits on clients. The post-conflict Northeastern region is not a monolithic entity and there are a number of diverse groups of potential beneficiaries with different needs, skills, capacities and opportunities. Therefore, microfinance initiatives need to consider these situations and develop their interventions accordingly.