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The Psychological Impact of Microfinance in Sri Lanka

03 January 2013
Sri Lanka
Sri Lanka

Dr. Nina Hansen got involved with the GSG through our deputy director Pieter Boele van Hensbroek. She works as an assistant professor at the faculty of behavioral and social sciences. Nina is one of the few within her faculty that has an interest in researching the long-term social and psychological consequences of development aid projects in developing countries.

She just returned from a project in Sri Lanka where she is conducting research on the psychological and social changes of marginalized people that received access to financial services (training and micro credits). She did this in cooperation with the GIZ (German Agency for International Cooperation), one component of their development programme is the ProMiS ‘Promotion of the Microfinance Sector’. (http://www.microfinance.lk ) This programme started in 2009 and focusses primarily on the poorest layers of society, these are the people that usually don’t qualify for a microfinance loan. More information on the ProMiS project is portrayed in this informative video: https://www.youtube.com/watch?v=ii05554S3To

Nina Hansen and her research team also conducted their research on this particular layer of the population. With the help of students from Sri Lankan Universities she collected the data through interviews and surveys. This cross-sectional quantitative study set out to investigate whether the activities of the program (trainings and micro loans) resulted in high set goal of the program, namely social integration and cohesion of marginalized people in Sri Lanka by comparing clients of this program with a comparison group of marginalized people without access microfinance services. They examined the economic, psychological and social impact of the programmes’ activities.

Firstly, they study different indicators of empowerment of people that participated in the ProMis programme and what empowerment exactly means for a Sri Lankan citizen. More precisely, they investigate whether people develop more control over how to achieve goals in their life and whether their social network increases. Lastly, they study if people develop a more positive outlook towards their own country.

picture provided by the GIZ
picture provided by the GIZ

The project has created many new research questions that Dr. Hansen is eager to explore further. One of them is the change of the role of women that participated in the programme. In future projects she wants to investigate how women’s role in the family and society may change when they receive access to these financial services. Women are more often granted with microcredits as they have proven to be more reliable in paying back the loan. Her future research will systematically investigate whether women that apply for a loan for themselves or for their husband differ in their social roles.

Dr. Hansen is currently working on analysing the data and she hopes to publish her report by the end of January. If you’d like to know more about the project, feel free to contact Dr. Hansen; n.hansen@rug

Last modified:04 July 2014 9.35 p.m.

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