Full Article - PDF

Published: 2020-11-03

Page: 76-82


Department of Public Administration, University of Sri Jayewardenepura, Sri Lanka.

*Author to whom correspondence should be addressed.


Though the studies primarily researched the role of microfinance institutes in developing entrepreneurs, the actual “link pins” between the institute and the entrepreneurs are Microfinance Loan Officers (MLOs). Though its conventional role is assigned on them to collect the debt, today MLOs are playing multiple roles in developing entrepreneurs. However, their role has not been sufficiently researched in the microfinance literature, leaving a gap to be addressed. Hence this paper explores the role of microfinance loan officers in developing entrepreneurs in Sri Lanka. This is a qualitative study by using primary data collected from entrepreneurs who are the clients of a large MFI in Sri Lanka in terms of the portfolio and the client base. Data were collected through three focus group discussions with entrepreneurs. Each focus group consisted of 5 entrepreneurs representing the selected MFI. Thus, the sample size is 15 entrepreneurs from the chosen MFI and the unit of analysis is microfinance loan officers. The study found that, MLOs are playing a key, yet multiple roles in developing entrepreneurs at the different stages of entrepreneurial development process: MLOs carry out initial surveying of the clients on the site itself, assessing the creditworthiness before disbursing the loans, providing credit advice, facilitating training for the entrepreneurs and arranging of flexible approach for entrepreneurs under the critical circumstances. Based on those findings the study made recommendations.

Keywords: Microfinance loan officers, developing entrepreneurs.

How to Cite

MADHUWANTHI, L. A. P. (2020). ROLE OF MICROFINANCE LOAN OFFICERS IN DEVELOPING ENTREPRENEURS: A CASE STUDY FROM SRI LANKA. Asian Journal of Arts, Humanities and Social Studies, 3(2), 76–82. Retrieved from


Download data is not yet available.


Dixon R, Ritchie J, Siwale J. Loan officers and loan ‘delinquency’ in microfinance: A Zambian case. Accounting Forum. 2007;31(1):47-71.

Agier I, Szafarz A. Credit Officers and Loan Granting in Microfinance: Brazilian Evidence; 2010. Available: (Accessed on 10/08/2019)

Siwale JN, Ritche J. Disclosing the loan officer’s role in microfinance development. International Small Business Journal. 2011;30(4):432–450.

Godfroid C. Relationship Lending in Microfinance: How does it Impact Client Dropouts; 2019. Available:

Udell G, Berger A. Small Business Credit Availability and Relationship Lending: The Importance of Bank Organization Structure. Economic Journal. 2002;112:32-32.

Bernard DTK. Microfinance services: Facilitating entrepreneurial success of poor women. Review of Contemporary Business Research. 2015;4(2):57-66.

Newman A, Schwarz S, Borgia D. How does microfinance enhance entrepreneurial outcomes in emerging economies? The mediating mechanisms of psychological and social capital. International Small Business Journal. 2014;32(2):158–179.

Rao S. Nurturing entrepreneurial women. Journal of Entrepreneurship in Emerging Economies. 2014;6(3):268-297.

Tipu SAA, Arain FM. Managing success factors in entrepreneurial ventures: A behavioral approach. International Journal of Entrepreneurial Behavior & Research. 2011;17(5):534-560.

Chrisman JJ, McMullan WE. A Preliminary assessment of outsider assistance as a knowledge resource: The longer-term impact of new venture counseling. Entrepreneurship theory and practice. 2000;24(3):37–53.

Becker GS. Human capital: A theoretical and empirical analysis with special reference to education. Chicago: University of Chicago Press; 1993.

Holtmann M, Grammling M. A toolkit for designing and implementing staff incentives schemes, Microfinance Network & CGAP, Nairobi; 2005.

Siwale J. The role of loan officers and clients in the diffusion of microfinance: A study of PRIDE Zambia and CETZAM in Zambia. PhD thesis. University of Durham; 2006.

Yin RK. Case-study research: Design and methods 4th edition ed. London: Sage; 2009.

Thomas L, MacMillan J, McColl E, Hale C, Bond S. Comparison of focus group and individual interview methodology in examining patient satisfaction with nursing care. Social Sciences in Health. 1995;1(4):206-220.

Fisher T, Sriram MS. Micro-Credit: Putting Development Back into Micro-Finance. Vistaar Publications. New Delhi; 2002.

Labiea M, Méonb PG, Szafarzc A. Discrimination in microfinance: The role of credit officers, CEB Working Paper No.09/017. Centre Emile Bernheim, Université Libre de Bruxelles, Belgium; 2009.