Abstract:
Microfinance has emerged as a crucial mechanism for sustainable development,
socially, economically, and environmentally, particularly in rural contexts of
developing countries. While the economic sustainability of microfinance groups
has been studied comprehensively, social sustainability, particularly in rural Sri
Lanka, remains underexplored. This study examines the dynamics of group
interactions and their role in sustainability to recognize the key determinants of
social sustainability in microfinance groups in rural Sri Lanka. It focuses on social
and economic inclusion, leadership empowerment, and community well-being.
Additionally, the study reveals the role of leadership, trust, and conflict resolution
in sustaining groups. Sixteen interviews were conducted with leaders of
microfinance groups in rural areas of the Anuradhapura district in Sri Lanka. The
interviews employed a qualitative approach, utilizing a pre-tested interview guide
and face-to-face interviews, a purposive sampling method, descriptive analysis,
and in-depth thematic analysis while preserving the research ethics The findings
Journal of Institute of human Resource Advancement
University of Colombo
80
of the study revealed that trust and cooperation, conflict management, group
functioning, and the impact of social networks on microfinance groups
significantly influence the social sustainability of these groups in rural Sri Lanka,
enhancing social capital and cohesion, leadership empowerment, socio-cultural
context, economic inclusion, and community well-being. Furthermore, this study
highlights the importance of adopting a comprehensive and holistic approach to
enhancing socio-cultural and economic inclusion through microfinance in rural Sri
Lanka. The social sustainability of microfinance groups leads to overall
sustainability through community-based growth and development, poverty
reduction, and prominent financial inclusion.
Keywords: Conflict Management, Group Functioning, Microfinance, Social
Sustainability, Social Networks, Trust and Cooperation, Sri Lanka
