- April 2, 2021
- Posted by: RSIS
- Categories: Banking & Finance, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue II, February 2021 | ISSN 2454–6186
Rathiranee, Y
Professor in Financial Management, Department of Financial Management, University of Jaffna, Sri Lanka
Abstract: This study was conducted to investigate the impact of micro-credit on income of poor women who are involving in self-employment activities focusing on people who borrow from microfinance institutions and continuously using it in selected rural areas in Jaffna District. This study mainly focuses on the status of using micro credit and effect of micro-credit on income of the poor women. Data were collected using survey method; using direct personal interviews with a ninety six women headed households. The sample from three villages (Chulipuram, Kondavil, Kopay) of Valikamam Division in Jaffna District was selected by using simple random sampling method. To find out the accuracy of the data the Cronbach’s alpha reliability test has been done. Further, the self-employment can be divided into two categories as product and service and to differentiate the income among the production and service activities of poor women the discriminant analysis was used by using SPSS software. The result of this study revealed that the micro-credit leads to increasing income and asset building those who involve with production activities. In addition to this, using micro-credit creates more job opportunities and economic activities and improves the income of women through the self-employment opportunity. However, the micro-credit has negative impact on people’s feeling about paying back the loan because most of the people borrowed fund from various licensed specialized Banks and leasing companies which provide loans with higher interest rates.
Keywords: Micro-credit, Income, Poor Women, Self-employment activities and living standards.
I. BACKGROUND OF THE STUDY
The term microfinance refers to a variety of financial services that target poor and low income clients. Micro loans are provided for a multi purposes. Microfinance Institutions (MFIs) are the organizations which provide loans and other services to the poor people. According to ADB (2008) Microfinance is the provision of financial services of deposits, loans, services for payment, and insurance to the poor and low income people and their micro enterprises. These statements are explaining that microfinance is a financial service but it is designed specifically for the poor people to improve their lives in sustainable manner. It is an economic development approach providing financial services through institutions to low-income people.
