An Analysis of Measures of Micro Credit

Micro Finance Institution is an important tool to enhance the living condition of poor people in developing countries and Sri Lanka as well. From time to time Sri Lanka faced difficulties and challenges such as Tsunami and conflict situation. MFIs help poor people by giving financial and non-financial services in order to fulfill their infrastructure facilities and create self-employment activities to work independently. However, it is difficult to find out the services which are provided by the MFIs unless there will be a clear yardstick or index. Authors use questionnaire to gather information on this regards. This study intends to fill the gap that to find out the measures of micro credit in the war affected areas in Northern Sri Lanka. For this purpose, 337 respondents from five districts of Northern Province have been selected by using stratified random sampling method and the factor analysis has been used to find out the measures of micro credit. Four measures or variables have been found out by using factor reduction techniques. Researcher has twenty two variables and which was reduced as four measures such as repayment, amount, credit delivery and interest rate by using SPSS software. Finally it was concluded that the measures may be differ from situation to situation and place to place.