Micro Finance as a Tool of Empowerment: Evidence from Two State Sponsored Micro Finance Projects in Sri Lanka

Microfinance provides a variety of small-scale financial products including credit, savings, insurance and business development services to poor people who do not have access to commercial banks and other formal financial institutions. It is widely believed that such credit enables poor people to engage in their own small enterprises, thereby to raise their incomes, and to accumulate assets. Microfinance is increasingly recognized as an effective instrument for poverty reduction and local economic development especially through empowering women economically, politically and socially. This research was carried  with an objective to assess the extent to which these micro finance projects contribute for the economic empowerment, social empowerment, interpersonal empowerment of women beneficiaries in Hingurakgoda DS division in Polonnaruwa district in Sri Lanka. 200 beneficiaries from 2nd community development and livelihood improvement project and  Samurdhi Bank Society were selected randomly and information was collected through structured questionnaire. Descriptive analysis shows that’s loans, advisory & counseling service, skills development & training and women empowerment are in high level. Correlation between predictors and empowerment is also reveals positive and significant relationship. Regression analysis shows that variables skills development & training and advisory & counseling service are contributing more to women empowerment.