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Elements of microfinance on spatial poverty alleviation in Sri Lanka: Structural equation modeling

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  • Prasansha Kumari

Abstract

Sri Lanka being a developing country, its poverty can be identified as a serious issue for the development of the country. Poverty can be identified as a spatial characteristic in Sri Lanka which can be seen in the high poverty rates in several areas as the result of disparities of natural and physical resources distribution and, geographical disadvantages. Microfinance has been identified as a significant tool for eradicating poverty in many Asian countries after the 1990s. Sri Lanka also launched several microfinance programs to reduce poverty in the country. Despite the availability of microfinance in Sri Lanka, very few studies have been carried out; therefore, only limited knowledge of the empirical and theoretical impacts of the various microfinance elements on poverty alleviation is available. This study is an attempt to remedy this paucity of knowledge. Primary data were gathered through a Likert scale questionnaire that was distributed among 497 borrowers of the Samurdhi microfinance program. This sample was chosen from five districts of Sri Lanka. Structural Equation Modeling was used for testing the hypotheses. The findings of the study revealed that microcredit was the most significant element of microfinance for alleviating spatial poverty in Sri Lanka. Nonfinancial Services and Insurance Services also had a positive impact on spatial poverty alleviation. Micro Savings and Social Intermediation Services did not have a notable positive impact on spatial poverty alleviation in Sri Lanka. The findings of this study enhance the existing knowledge of microfinance, providing conceptual and empirical contributions. This study could substantially contribute to the government by offering it deeper insight into its programs. Therefore, policymakers and regulators will be able to introduce better tools for eradicating poverty, based on this new knowledge. 作为一个发展中国家，斯里兰卡的贫困情况可被视为该国发展面临的严重问题。贫困可被确定为斯里兰卡的一个空间特征，该国多个地区的高贫困率归因于自然和物质资源分布差异以及地理劣势。微型金融自20世纪90年代起已被许多亚洲国家确定为消除贫困的重要工具，斯里兰卡也启动了多项微型金融计划以减少该国的贫困。尽管斯里兰卡有微型金融，但相关研究却很少；因此，就各种微型金融要素对减贫产生的实证影响和理论影响而言，仅存在有限的了解。本研究试图弥补该知识空白。原始数据通过李克特量表问卷进行收集，该问卷分发给Samurdhi微型金融计划的497名借款人。该样本选自斯里兰卡的五个地区。结构方程模型（SEM）用于检验假设。研究结果表明，小额信贷是缓解斯里兰卡空间贫困的微型金融中最重要的组成部分。非金融服务和保险服务也对空间扶贫产生了积极影响。小额储蓄和社会中介服务对斯里兰卡的空间扶贫未产生显著的积极影响。本研究的结果增强了关于微型金融的现有知识，作出了概念贡献和实证贡献。这项研究能通过让政府更深入地了解其计划，从而为政府作出重大贡献。因此，决策者和监管机构将能够根据这些新知识引入更好的消除贫困工具。 Siendo Sri Lanka un país en desarrollo, su pobreza puede identificarse como un problema grave para el desarrollo del país. La pobreza se puede identificar como una característica espacial en Sri Lanka que se puede ver en las altas tasas de pobreza en varias áreas como resultado de las disparidades en la distribución de los recursos naturales y físicos y las desventajas geográficas. Las microfinanzas han sido identificadas como una herramienta importante para erradicar la pobreza en muchos países asiáticos después de la década de 1990, Sri Lanka también lanzó varios programas de microfinanzas para reducir la pobreza en el país. A pesar de la disponibilidad de microfinanzas en Sri Lanka, se han realizado muy pocos estudios; por lo tanto, solo se dispone de un conocimiento limitado sobre los impactos empíricos y teóricos de los diversos elementos de las microfinanzas en el alivio de la pobreza. Este estudio es un intento de remediar esta escasez de conocimiento. Los datos primarios se recopilaron a través de un cuestionario de escala Likert que se distribuyó entre 497 prestatarios del programa de microfinanzas Samurdhi. Esta muestra fue elegida de cinco distritos de Sri Lanka. Se utilizó el modelo de ecuaciones estructurales (SEM) para probar las hipótesis. Los hallazgos del estudio revelaron que el microcrédito era el elemento más importante de las microfinanzas para aliviar la pobreza espacial en Sri Lanka. Los servicios no financieros y los servicios de seguros también tuvieron un impacto positivo en el alivio de la pobreza espacial. Los servicios de microahorro e intermediación social no tuvieron un impacto positivo notable en el alivio de la pobreza espacial en Sri Lanka. Los hallazgos de este estudio enriquecen el conocimiento existente sobre las microfinanzas, brindando aportes conceptuales y empíricos. Este estudio podría contribuir sustancialmente al gobierno al ofrecerle una visión más profunda de sus programas. Por lo tanto, los encargados de formular políticas y los reguladores podrán introducir mejores herramientas para erradicar la pobreza, con base en este nuevo conocimiento.

Suggested Citation

  • Prasansha Kumari, 2022. "Elements of microfinance on spatial poverty alleviation in Sri Lanka: Structural equation modeling," Poverty & Public Policy, John Wiley & Sons, vol. 14(2), pages 137-165, June.
    • Handle: RePEc:wly:povpop:v:14:y:2022:i:2:p:137-165
    DOI: 10.1002/pop4.337
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