Abstract:
Micro finance has been highlighted as a critical turning point in any emerging
country, and micro loan is the most powerful micro-financial tools for
economic development. As a result, microfinance institutions employ the
microloan facility to alleviate poverty among poor individuals and to assist
Small and Medium Enterprises in overcoming financial challenges. The
SANASA Society is a well-known financial institution in Sri Lanka that gives
microloans to over 8000 primary societies in order to alleviate poverty.
Hence, the primary goal of this study was “To identify impact of microloan
facilities on poverty alleviation among customers in Sri Lanka’s Sanasa
Primary Society”. The study followed the positivism philosophy and identified
three independent variables, such as loan interest rate, ease of getting a loan,
and level of awareness, after analyzing existing literature. Moreover, the study
was conducted in a deductive way by using survey and quantitative research
techniques. Further, the study sample size included 54 Samurdhi recipients
who joined the SANASA primary society to take out micro loans and fall
below the poverty line, chosen from a population of 122 using a simple
random sampling procedure. The study findings revealed that an affordable
microloan interest rate, the ease of getting a loan, and the awareness level of
microfinance positively influenced poverty alleviation and an affordable or
fair interest rate was identified as the most influential factor in poverty
reduction. Hence, it was suggested that SANASA Primary Society charge a
reasonable and affordable interest rate, simplify the loan application process
from filling to approval, improve employee supportive behavior through an
employee training program, and conduct a customer awareness program to
alleviate poverty by providing microloans to individuals.
