Entrepreneurial Success for Women through Microfinance and Effect of Education: Evidence from Sri Lankan

Abstract

Microfinance is considered a poverty alleviation strategy in most countries especially in Asia and Sri Lanka is no exception. Sri Lanka is providing microfinance services through microfinance institutions (MFIs) to poor women for setting-up and developing micro-enterprises. It has been revealed through research that there are five components of microfinance services offered in Sri Lanka namely; Micro-credit, Micro-savings, Micro-insurance, Business-support, and Skills -development. The past researchers have focused on the socio-economic, environmental, and individual factors that have an impact on the entrepreneurial success of women obtaining microfinance services, however, the impact of each of these service components and their specific constituents and indicators for measuring these are not agreed upon. It is important to know the individual impact of usage of these service components on the entrepreneurial success of the users and the influence of their level of education, for the industry and policymakers. Hence the main aim of this study was to determine the relationships (magnitude and direction) of usage of these service components to entrepreneurial success and the moderating effect of level of education on microfinance service users and their entrepreneurial success. The results of the study confirmed that out of the five microfinance services (components), usage of Micro-credit, Micro-savings and Skills-development had a positive relationship to entrepreneurial success and the other two services, Micro-insurance and Business-support did not have such relationship. Further, it was revealed that the level of education had moderated only the relationship between the usage of micro-savings and entrepreneurial success. Further, the study confirmed that the usage of micro-credit component was the most vital service component impacting the entrepreneurial success of women. Further, specific constituents and indicators for measuring these microfinance service components have been developed.