A balloon shrinks because it has some leak in the spherical surface or at the point where we tie it with a thread. Then through the small hole, helium or air molecules escape into the atmosphere, as the inside pressure is more than the external pressure of 1 atmosphere.
this process is called diffusion of gases.
rate of diffusion of gases is inversely proportional to the square root their molar mass or molecular mass. Heavier gas diffuses slower.
Molar mass of air is in between 32 gm and 28 gm, as Oxygen and Nitrogen comprise most of air. Molar mass of Helium is 4 gm.
Hence the phenomenon.