Abstract:
Poverty is an important problem in most developing countries. As a result of
this, people are at a low level of standard of living. Micro-credit is a loan
system that is expected to expand the income-generation activities of lowincome people and improve small and medium enterprises. This study aims to
analyze the impact of micro-credit on poverty alleviation in the Koralaipattu
West, Oddamavadi Divisional Secretariat area. The sub-objective of this study
is to compare the beneficiaries and non-beneficiaries of micro-credit, examine
the standard of living of the beneficiaries after receiving the micro-credit,
identify the problems faced by the micro-credit recipients, and propose
solutions to microcredit problems. Primary data was collected by structured
questionnaire from the 150 beneficiaries. This study performed a descriptive
analysis, multiple regression analysis, and logistics model to analyze the data
by using MS Excel and SPSS software. This study found that there is a positive
and significant correlation between microcredit and income. As well, the total
number of non-beneficiaries is higher than the total number of beneficiaries.
Further, this study found that there were no changes in the standard of living
of the beneficiaries after receiving the microcredit. Hence, this study
concluded that microcredit has a low level of positive impact on poverty
alleviation. Finally, this study suggested that interest rates should be
maintained at a low level to reduce poverty. Microcredit beneficiaries should
use their loan in useful ways. And also, poverty can be reduced through
structural changes and savings and investments.
