Nurturing Entrepreneurs of Microfinance Institutes: The Social Entrepreneurial Perspective in the Socio-Cultural Milieu in Sri Lanka

Abstract

The purpose of this study is to examine how Social Entrepreneurial role of profitoriented Microfinance Institutes (MFIs) facilitates to nurture entrepreneurs in the socio-cultural milieu in Sri Lanka. The researcher used interviews, focused group discussions and documentary review to collect data. Participants in the study were Microfinance credit officers and Microfinance clients. The results of this study show that MFIs have been successful in areas such as: giving loans to low-income earners; requiring that clients become entrepreneurs; building long term mentoring relationship with entrepreneurs; providing hands-on-work training, visits meetings and workshops. Therefore, the MFIs social values enhance the development of entrepreneurship in Sri Lanka. However, a range of socio-cultural factors has limited the nurturing entrepreneur. Such as the inability to reach the poorest; failure to address the problem of equity when distributing loans; capitalistic culture of focusing more on profit and efficiency rather than people welfare; the cultural tendency for clients to misuse loans; the culture of competition among MFIs; and cultural norms such as visiting people’s homes and dealing with women. This study shows that socio-cultural factors are a mutual experience between MFIs and the entrepreneurs in the sense that while the capitalist culture of MFIs affects entrepreneurs, the culture of the entrepreneurs affects MFIs in ways that shape policies and practices of the MFIs.