Journal of Economics and Business
ISSN 2615-3726 (Online)
ISSN 2621-5667 (Print)
Published: 14 September 2020
Entrepreneurial Success for Women through Microfinance and Effect of Education: Evidence from Sri Lankan
D. T. Kingsley Bernard
Sri Lanka Institute of Information Technology
Download Full-Text Pdf
Keywords: Microfinance, Poverty, Entrepreneurial Success, Microfinance, Women Entrepreneurs, Sri Lanka
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; Microcredit, 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 Microcredit, 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 microcredit 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.
Ahlstrom, D. (2010). The Academy of Management perspectives. The Academy of Management Perspectives, 24(3), 11–24. Retrieved from
Ameer, B., & Jamil, M. (2013). Effectiveness of Microfinance Loans in Pakistan. Global Journal of Management and Business Research, 13(7), 1–5.
Atapattu, A. (2009). State of Microfinance in Sri Lanka As part of the project on State of
Microfinance in SAARC Countries. Retrieved from http://inm.org.bd/wp-content/uploads/2015/09/Sri-Lanka.pdf
Banerjee, A., Du O Z, E., Glennerster, R., & Kinnan, C. (2010). The miracle of micro…nance? Evidence from a randomized evaluation. Retrieved from http://economics.mit.edu/files/4162
Bernard, D.T K. (2015). Microfinance Services: Facilitating Entrepreneurial Success of Poor Women. Review of Contemporary Business Research, 4(2), 57-66.
BRAC Annual Report 2005. Retrieved from http://www.brac.net/sites/default/files/Brac Annual Report 2005.pdf
Brixiova, Z. (2010). Unlocking Productive Entrepreneurship in Africa’s Least Developed Countries, African Development Review. https://doi.org/10.1111/j.1467-8268.2010.00255.x
Bruton, G. D., Ahlstrom, D., & Si, S. (2015). Entrepreneurship, poverty, and Asia: Moving beyond subsistence entrepreneurship. Asia Pacific Journal of Management, 32(1), 1–22. https://doi.org/10.1007/s10490-014-9404-x
Colombage, S. (2004). Microfinance as an Instrument for Small Enterprise Development: Opportunities and Constraints. Retrieved from https://www.microfinancegateway.org/sites/default/files/mfg-en-paper-microfinance-as-an-instrument-for-small-enterprise-development-opportunities-and-constraints-oct-2004.pdf
Crépon, B., Devoto, F., Duflo, E., & Parienté, W. (2011). Impact of microcredit in rural areas of Morocco: Evidence from a Randomized Evaluation 1. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.664.5773&rep=rep1&type=pdf
De Silva, G., Attapattu, & Durant. (2006). Fitch Ratings, Sri Lanka Special Report. Duke University Press.https://doi.org/10.1215/9780822394051-083
Denis, D. J. (2012). The Persistent Puzzle of Corporate Capital Structure: Current Challenges and New Directions. Financial Review, 47(4), 631–643. https://doi.org/10.1111/j.1540-6288.2012.00347.x
Fisher, R., Maritz, A., & Lobo, A. (2014). Evaluating entrepreneurs’ perception of success. International Journal of Entrepreneurial Behavior & Research, 20(5), 478–492.
Hair, J. F., Sarstedt, M., Ringle, C. M., & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research, Journal of the Academic Marketing Science, 40, 414–433
Harris, D. S. (2005). State of the Microcredit Summit Campaign Report. Retrieved from https://docs.google.com/viewerng/viewer?url=http://www.microcreditsummit.org/uploads/resource/document/socr2005_english_final_15879.pdf
Hussain, J. G., & Mahmood, S. (2012). Impact of Microfinance Loan on Poverty Reduction amongst FemaleEntrepreneurship in Pakistan. In Cambridge Business & Economics Conference. Cambridge Business & Economics Conference. Journal of Business Venturing, 28(1), 30–50. https://doi.org/10.1016/j.jbusvent.2012.02.005
Kabeer, N. (2005). Is Microfinance a “Magic Bullet” for Women’s Empowerment? Analysis of Findings from South Asia. Economic and Political weekly, 29, 4709 -4718
Karlan, D., & Zinman, J. (2011). Microcredit in Theory and Practice: Using Randomized Credit Microcredit in Theory and Practice: Using Randomized Credit Scoring for Impact Evaluation. Science, 332. https://doi.org/10.1126/science.1200138
Khavul, S., Chavez, H., & Bruton, G. D. (2013). When institutional change outruns the change agent : The contested terrain of entrepreneurial micro fi nance for those in poverty ☆.
Khurshid, J., Khan, M. I., & Khurshid, N. (2015). Development of Integral Model for Women Entrepreneurship in South Asia (An Evidence from Pakistan). In ICSB World Conference Proceedings (pp. 1–6). Washington: International Council for Small Business (ICSB). Retrieved from https://search.proquest.com/openview/dbed5925840825b169e07a5cf1330162/1?pq-origsite=gscholar&cbl=39996
Manzoor, R. S., & Jalil, M. F. (2014). Psychological capital intervention towards women entrepreneurship development and entrepreneurial orientation. International Journal of Business Management and Administration, 3(2), 22–28. Retrieved from http://academeresearchjournals.org/journal/ijbma
Mahmood, S., Hussain, J., & Matlay, H. (2014). Optimal microfinance loan size and poverty reduction amongst female entrepreneurs in Pakistan. Journal of Small Business and Enterprise Development, 21(2), 231–249.
Mogashoa, T. (2014). A Critical Review of the Concepts Associated with Women Entrepreneurs in Rural Areas. Mediterranean Journal of Social Sciences. https://doi.org/10.5901/mjss.2014.v5n23p2263
Mokhtar, S. H., & Ashhari, Z. M. (2015). Issues and challenges of microcredit programmes in Malaysia. Asian Social Science, 11(26). https://doi.org/10.5539/ass.v11n26p191
Newman, A., Schwarz, S., & Borgia, D. (2013). How does microfinance enhance entrepreneurial outcomes in emerging economies? The mediating mechanisms of psychological and social capital. International Small Business Journal, 32(2), 158-179.
Ranasinghe, S. B. (2008). Factors Contributing to the Success of Women Entrepreneurs in Sri Lanka. Sri Lanka Journal of Advanced Social Studies, 1(2). https://doi.org/10.4038/sljass.v1i2.4858
Raven, P., & Le, Q. V. (2015). Teaching business skills to women. International Journal of Entrepreneurial Behavior & Research, 21(4), 622–641. https://doi.org/10.1108/ijebr-06-2014-0099
Robinson, M. (2002). The Microfinance Revolution. The World Bank, Washington, DC, USA. https://doi.org/10.1596/0-8213-4953-8
Roodman, D. M. (2012). Due diligence an impertinent inquiry into microfinance. Washington: Center For Global Development.
Roxin, H., & Fiege, K. (2010). Economic empowerment of women through microcredit: The case of the "Microfinance investment and technical assistance facility" (MITAF) SLE publication series; S240. Retrieved from http://edoc.hu-berlin.de/.
Sekaran, U., & Bougie, R. (2010). Research methods for business : a skill-building approach. Wiley. Retrieved from https://books.google.lk/books?id=a__YI3TJQuAC&printsec=frontcover&dq=Sekaran,+U.+and+Bougie,+R.+(2009).+Research+methods+for+business.+Chichester,+West+Sussex,+United+Kingdom:+John+Wiley+%26+Sons.&hl=en&sa=X&ved=0ahUKEwjX7MvMwPTXAhVHJ5QKHe94DigQ6AEIJDAA#v
Tilakaratna, G., & Wickramasinghe, U. (2005). MIcrofinance in Sri Lanka-A Household Level Analysis Of Outreach & Impact on Poverty - Institute of policy studies Sri Lanka. Retrieved December 4, 2017, from http://www.ips.lk/microfinance-in-sri-lanka-a-household-level-analysis-of-outreach-impact-on-poverty3/
Underwood, K. (2012). Early Intervention for Young Children, I & Percy. M (Eds). Developmental Disabilities, Ontario
Veal, A. J. (2005). Business research methods : a managerial approach. Pearson Addison Wesley.
Viljoen, D. J., & Dunga, S. H. (2013). Determining the Factors that Influence Female Unemployment in a South African Township. International Journal of Social Sciences and Humanity Studies, 5(1), 1309–8063. Retrieved from http://www.sobiad.org/ejournals/journal_IJSS/arhieves/IJSS_2013_1/Diana_Joan_Viljoen.pdf
Witbooi, M., & Ukpere, W. (2011). Indigenous female entrepreneurship: Analytical study on access to finance for women entrepreneurs in South Africa. African Journal of Business Management, 5(14), 5646–5657. https://doi.org/10.5897/AJBM10.1161
Yeboah, E. (2017). The Impact of Microfinance on Grassroot Development: Evidence from Smes in Kwabre East District of Ashanti Region of Ghana. Open Journal of Business and Management, 5(4), 577–591. https://doi.org/10.4236/ojbm.2017.54050