Abstract:
Lack of access to finance constantly emerges as one of the most imperative and robust
underlying factors restricting firm growth and performance. Even though there were
many literatures found on global scale there is very limited research conduct in Sri
Lankan context, especially on the microenterprise’s perspective. Therefore, the main
purpose of this study to fulfill this gap and investigate the role of access to finance on
the performance of microenterprises in Sri Lanka. The study followed positivism
philosophy and a deductive approach. As survey strategy was chosen, a structured
questionnaire was used as the data collection tool from a sample of 385 Sri Lankan
microentrepreneurs. The author has developed hypothesis and test them using the SPSS
software. The findings indicate that increased access to finance has positive effects on
the growth of profit, sales, and asset base of the micro enterprises. However, its impact
of access to finance on employment generation was weak. Further, the study confirms
the assumption that employment generation within microenterprise sector is
persistently low. This study contributed to the local body of literature by analyzing the
different employment groups of microenterprises and their relationship to access to
finance in Sri Lankan context.
