Microenterprise occupation and poverty reduction in microfinance programs: evidence from Sri Lanka
Shaw, J.
World Development Oxford 32(7): 1247-1264
2004
DOI: 10.1016/j.worlddev.2004.01.009Document Number: 233625
The microenterprise earnings of microfinance clients in southeastern Sri Lanka are linked to their initial incomes. Data were obtained mainly from questionnaire interviews with 253 respondents distributed in three location-based categories: a semi-urban cohort of 115 households; and two rural groups, i.e. 28 from the prosperous Uda Walawe irrigation scheme, and 110 from the poorer more remote semi-irrigated and rainfed regions. Poorer clients face geographic, financial and sociocultural barriers to entry to the most promising microenterprise occupations, leading them to select low-value activities with poor growth prospects. In semi-urban areas, poverty impacts could be strengthened by supplementing loans with nonfinancial interventions encouraging poor clients to select higher-value occupations. In arid rural areas, where microenterprises face severe market and infrastructure constraints, microenterprise development is unlikely to facilitate poverty exit.
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