IMPACT OF MICROFINANCE ON POVERTY ALLEVIATION IN ANURADHAPURA DISTRICT

Finance

Poverty has been recognized as a strategically important issue which contributes in achieving development targets universally besides strengthen the local government system for the overall development of the Sri Lanka. Meanwhile microfinance deemed to one of dominant concept which influenced on poverty alleviation in Sri Lanka recently. Therefore, main objective of current study is to develop a model to analyze the impact of microfinance on poverty alleviation in Anuradhapura district. Through a sound literature review; fulfillment of basic needs, living standard and self-employment have been considered as dependent variables which represents the poverty alleviation and microfinance activities treated as independent variable while age, gender and income levels considered as control variables. Self-administrated questionnaire based on five point Likert scale was used and it was able to collect data from 100 microfinance beneficiaries in Anuradhapura district according to convenient sampling method. Internal consistency of questionnaire measured from Cronbach’s alpha on all variables indicated the values greater than 0.7 by implying a satisfactory level of reliability thus three models comprised on poverty alleviation showed more that 20% explanatory power of microfinance activities. The findings revealed that microfinance activities have significant impact on fulfillment of basic needs, living standard and self-employment on microfinance beneficiaries in Anuradhapura district. Therefore it can be concluded that microfinance deemed to be one of virtuous practice on poverty alleviation for rural areas in Anuradhapura District.

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