Assessing Entrepreneurial Intentions of Microfinance Clients in South Asia

The urban Microfinance (MF) landscape in four comparable South Asian countries-India, Sri Lanka, Bangladesh and Nepal-have been studied here from the human capital and entrepreneurial behavioural perspective of MF clients. The world over, MF is a proven sustainability development tool to improve livelihoods and a measure to alleviate poverty by providing loans for setting up micro enterprises. And, in South Asia, MF is equated to rural credit provided to Self Help Groups (SHGs) formed by poor women. Focus on enabling micro enterprises for rural poor has been high and the urban poor have not given equal attention in the South Asian MF sector. Consequently, as critically viewed by MF practitioners, urban micro-credit does not help poverty through nurturing entrepreneurs; at best, it provides consumption based credit. Evidence of this observation can be found in urban SHGs in India. The reasons for this behavioural trend in SHG members (MF Clients) can be multiple. Analyzing these behavioural characteristics, especially entrepreneurial intentions of these urban MF clients will prove helpful in understanding the trend clearly and nurture microenterprises. It is also worthwhile to investigate whether a similar trend exists in other South Asian countries also. Hence this study analyses similarities and differences, among the entrepreneurial intentions of 360 urban SHG leaders in India and other comparable South Asian countries. Entrepreneurial Intentions represent the belief that one will perform certain behavior. It indicates the effort that the person will make to carry out that entrepreneurial behavior. The study reiterates that: intentions direct attention, experience, and behaviour toward the accomplishment of the specific action; and that Entrepreneurial Intention is facilitated by presence of perceived feasibility and desirability of entrepreneurship in an individual. The results of the survey clearly indicate that urban SHG leaders in India (MF clients) possess a low level of entrepreneurial intention compared to urban SHG leaders in the other three countries - Bangladesh, Sri Lanka and Nepal. The study points towards rationale for this and assessing the intentions of MF Clients, to facilitate both MF policy makers and practitioners to draw new and result oriented policies to reach the right populace.