DETERMINANTS OF SOCIAL SUSTAINABILITY IN MICROFINANCE GROUPS IN RURAL SRI LANKA: A QUALITATIVE STUDY ON THE ROLE OF TRUST AND COOPERATION, CONFLICT MANAGEMENT, GROUP FUNCTIONING, AND SOCIAL NETWORKS

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