Browsing by Author "Thathsarani, U. S."

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    The Impact of Samurdhi Bank’s Microloans on the Economic Stability of Households in Padukka Divisional Secretariat
    (Faculty of Humanities and Sciences, SLIIT, 2025-05-27) GJayasooriya, N. D. H. D.; Thathsarani, U. S.
    An important aspect of sustainable national development is household financial stability. The accessibility of financial services remains a problem for low-income households in Sri Lanka. This paper aims to analyze the effect of microfinance initiatives on the economic stability of low-income families within the Padukka Divisional Secretariat division in Sri Lanka, specifically their contribution to enhancing income, consumption stability, and economic shock resilience. A structured questionnaire was chosen to acquire data from a random sample of 150 microfinance beneficiaries. The data were analyzed through using partial least squares Structural Equation Modeling (PLS-SEM). The findings indicate that microfinance has a large positive effect on household income and level of savings, and also leads to improved management of consumption needs and alleviation of financial vulnerability. In addition, households that had been involved in the microfinance program longer had better financial literacy and investment in productive assets. Nevertheless, issues like high interest rates and a lack of financial training diminish the benefits that are likely to be realized by certain borrowers. Importantly, the study found that while productive loan utilization significantly improves economic stability, larger loan amounts were associated with reduced stability, suggesting a risk of over-indebtedness. Overall, the results indicate that microfinance is effective in enhancing the financial stability of low-income earners in Sri Lanka, and the government should initiate policy options like offering financial literacy education, decreasing the interest rate burden, and providing other support services in order to optimize the sustainability of microfinance in the long term.