The Mediation Role of Micro-entrepreneurship in the Relationship between Microfinance and Poverty Alleviation

Abstract

This paper aims to evaluate the impact of microfinance on the alleviation of poverty. The paper also tests the mediating role of micro-entrepreneurship and the interaction effect of entrepreneurial training on microfinance and poverty alleviation. The research is based on the cross-sectional data collected from 400 beneficiaries of the National Rural Livelihood Mission (NRLM) Scheme through a pre-tested questionnaire. The data was analyzed by using regression analysis, ANOVA, and t-test. The mediation and moderation analysis was done by using PROCESS macro developed by Andrew Hayes. The results suggest that access to microfinance has enhanced the standard of living and health of beneficiaries, whereas the education of the children of beneficiaries has been negatively impacted. The results also revealed that there is a mediation role of micro-entrepreneurship and moderation role of entrepreneurial training in the relationship between microfinance and poverty alleviation. The study is based on cross-sectional data and can be replaced by a longitudinal research design. Moreover, this study focused only on the experimental group, thus, ignoring the control group. Further research could be done focusing on both experimental as well as control groups. The study's findings apprise the decision-makers and the microfinance proponents about the significance of micro-entrepreneurship and entrepreneurial training in enhancing the impact of microfinance among the deprived sections of society, particularly in rural India. This paper is the first to check the mediating role of microentrepreneurship and the moderating effect of entrepreneurial training in microfinance and poverty alleviation.