Abstract:
Sri Lanka has been successfully achieving the millennium development goal of poverty
alleviation for last two decades showing a rapid reduction of poverty head count ratio from 26.1
percent to 8.9 percent from 1990/1991 to 2009/10. Hambantota District recorded the highest
reduction in poverty head count ratio from 32.4 percent to 6.9 percent during the same period.
Microfinance sector is dominating as a major poverty alleviation tool in Sri Lanka. The problem of this
research is to what extent the microfinance contributes for poverty alleviation The data and
information were collected from 240 samples the researcher has selected 150 treatment groups and
90 comparison groups randomly selected from three Divisional Secretariats representing all five
selected microfinance institutions of Samurdhi, SANASA, Janashakthi bank, SEEDS and Rural banks.
The structured questionnaire was the major research tool used in collecting primary quantitative
data. Descriptive statistics and binary logistic regression models were used for the analysis tools. On
the basis of analysis, author found that Poverty reduction of the area was highly contributed by
microfinance institutions of SEEDS, Janashakthi Banking Societies, and Co-operative Rural Banks
while Sanasa and Samurdhi Banks contributed less.
