Impact of Gender on Effective Utilization of the Microfinance Credit Facilities in Sri Lanka

Abstract

Microfinance institutions can play vital role in giving solution this poverty problem especially in developing countries like Sri Lanka. Microfinance Institutions generally provides savings, credit facilities and some other services like providing education, technology, insurance etc. Experience shows that microfinance can help the poor to increase income, build viable businesses, and reduce their vulnerability to external shocks. It can also be a powerful instrument for self-empowerment by enabling the poor, to become economic agents of change. Microfinance institutions (MFIs) provide credit facilities to poor with no collateral or having a minimum security. Therefore the recovery of loans is at a higher risk to maintain the sustainability of the MFIs. So that it is important to analyze to whom the credit facility is given, for what purpose and returns earned from that program as well as the recoverability of the loan. Therefore this research focus on the qualities between genders about micro financing expectations to identify better gender to focus on developing these habits. Sample units were selected from the District of Kurunegala and the sample comprised 150 individuals who are currently engage in microfinance credit scheme and 50 individuals who are about to start their Microfinance projects. Equal number of men and women were included in the sample. Primary and secondary were collected from the borrowers and MFIs using a questionnaire, interviews and institutional records to analyze the attitude towards credit scheme, their repayment habit, saving patterns and the performance of microfinance projects. In this study, the researcher assesses the performance of men & women in microfinance credit schemes to find out whether men or women will achieve the microfinance goals favorable manner. The research finding shows a favorable impact of achieving microfinance goals by women rather than men. Women show a good record of repayment of loans, increase of their savings and earn more capital return than men.