Country Report on the Outreach of Microfinance Services in Sri Lanka

In recent years, microfinance has been looked upon as an effective instrument for poverty alleviation by many governments, international organizations and donors. Today, there is hardly any donor agency- multilateral or bilateral- that is not active in the field of microfinance. In recognition of its role in combating poverty and achieving the Millennium Development Goals (MDGs), the United Nations General Assembly designated the year 2005 as the International Year of Micro-credit. In assessing the effectiveness of microfinance, particularly its role in poverty alleviation, it is important to look at the outreach of the microfinance services. It is argued that microfinance can play an important role in poverty alleviation only if the extent of outreach is reasonably large. On the contrary, if microfinance institutions (MFIs) are restricted to only few geographical locations or serve only a small group of the population/poor, their effectiveness in poverty alleviation would be limited.

The objectives of the study are:
To determine the extent to which low-income households- both in rural and urban areas- have access to microfinance services.
• To analyze the extent to which the microfinance services are designed according to the needs of the low-income households.
• To determine the volume of microfinance operations on household level.
• To identify reasons for the exclusion of certain groups/households from access to microfinance services.
• Under this study, a survey covering around 3,000 households from all the districts in Sri Lanka is being conducted.

Research team

Ganga Tilakaratna
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Ramali Perera
Ayodya Galappattige
Roshini Jayaweera
S.S. Colombage (external collaborator from the Open University, Sri Lanka)


The German Development Cooperation (GTZ)

Published Year