Analyzing the Impact of Micro Finance Institutes on the Growth of SMEs with Special Reference to Kurunegala District in Sri Lanka

The SME (Small and Medium Enterprises) is the backbone of the Sri Lankan economy since it provides 45% of employment and contributes to 52% of Gross Domestic Production. 59 percent SME are highlighted that they face finance difficulties when they have conducted the daily operations. Further, it is emphasized that SMEs are often cannot afford to pay the high interest rate charged on loans. Micro finance institutes start to support the SME who hasn’t access the formalized financial institutes to fulfill their capital requirements. This study is mainly focused to identify the impact of microfinance services on the growth of SMEs in Sri Lanka. Overall, the outcome revealed that Micro savings, Insurance, and Training significantly impact the Small and Medium Enterprises’ growth except Microcredit. Micro Finance Services of Micro Finance Institutes are recommended for the Small and Medium Enterprises to achieve their financial growth.