Abstract:
Islamic Microfinance has been identified as an important tool in increasing the productivity of poor and
help to economic development. The main objective of this study is to empirically analyze the challenges
of Islamic Microfinance in Sri Lanka. Thus Islamic Microfinance of Sri Lanka also faces remarkable
challenges while growing fast in the nation. This is because of lack of financial techniques and human
resources. This study examines the impact of selected challenges in Islamic Microfinance and it is
practiced by Commercial Credit. A qualitative study is carried out which include personal interview,
questionnaire and secondary data materials. Questionnaires are dealing with selected challenges in
Islamic Microfinance. The target population for this study considers the staff of Commercial Credit
Head office. A simple random sampling technique is used to select the respondents surveyed for this
study. For data statistical analysis, the researcher applied statistical package for Social Science (SPSS)
16.0 computer software package under which person Coefficient, Coefficient of determination and
Regression analysis were calculated to analyze data. This study is identified the challenges of Islamic
Microfinance in Sri Lanka. Findings indicate that there is a significant positive relationship between
selected challenges in Islamic Microfinance from the sample point of view. The study recommends for
Islamic Microfinance staff working in market needs adequate training, motivate the staff, use the latest
technological systems and government must invest in supportive financial infrastructure. This research
reveals that staffs at Commercial Credit have perceptions that the selected challenges are impacted on
practices of Commercial Credit.
