Microfinance for Poverty Reduction
MICROFINANCE AS A STRATEGY FOR POVERTY REDUCTION
INTRODUCTION
Microfinance is not something new in Malaysia. It has been operated by credit unions, co-operative banks and specialised credit windows of banks. Microfinance services of financial credit range for about RM10,000 (USD2,631) and mostly to finance small businesses, agricultural loans and loans for poverty reduction.
Microfinance program in Malaysia has been implemented since 1987 as one of the poverty eradication strategies in the country. There are three large microfinance institutions in Malaysia namely AIM, YUM and TEKUN that targeted to different groups of people. Each of the microfinance institution has its own lending systems and has been subsidized by the government since their existence.
Majlis Amanah Rakyat (MARA), council of trust to the Bumiputera and Credit Guarantee Corporation (CGC) are some of the pioneers to introduce microfinance loans to its borrowers.
The rural credit institutions comprising of Agriculture Bank of Malaysia (BPM), Farmers Organisation Authority (LPP), Federal Land Development Authority (FELDA), and agro-based Co-operative Societies provide micro credit for the agriculture sectors.
There are a number of non-government organisations (NGOs) that engaged in microfinance. These include Yayasan Usaha Maju operating in Sabah, Koperasi Kredit Rakyat in Selangor and the best and significantly known microfinance institution (MFI) is Amanah Ikhtiar Malaysia (AIM).
Background of the study
This study research about microfinance and its strategy to reduce the poverty among Malaysia’s citizen. Microfinance was introduced in Malaysia during the last three decades. Two types of institutions namely banking institutions and non-bank institutions offer microfinance programs. Banking institutions that offer microfinance products are Public Bank, AM Bank, EONCAP Islamic Bank, CIMB Bank, Alliance Bank, United Overseas Bank, Bank Simpanan Nasional, Agro Bank and Bank Rakyat.
The
INTRODUCTION
Microfinance is not something new in Malaysia. It has been operated by credit unions, co-operative banks and specialised credit windows of banks. Microfinance services of financial credit range for about RM10,000 (USD2,631) and mostly to finance small businesses, agricultural loans and loans for poverty reduction.
Microfinance program in Malaysia has been implemented since 1987 as one of the poverty eradication strategies in the country. There are three large microfinance institutions in Malaysia namely AIM, YUM and TEKUN that targeted to different groups of people. Each of the microfinance institution has its own lending systems and has been subsidized by the government since their existence.
Majlis Amanah Rakyat (MARA), council of trust to the Bumiputera and Credit Guarantee Corporation (CGC) are some of the pioneers to introduce microfinance loans to its borrowers.
The rural credit institutions comprising of Agriculture Bank of Malaysia (BPM), Farmers Organisation Authority (LPP), Federal Land Development Authority (FELDA), and agro-based Co-operative Societies provide micro credit for the agriculture sectors.
There are a number of non-government organisations (NGOs) that engaged in microfinance. These include Yayasan Usaha Maju operating in Sabah, Koperasi Kredit Rakyat in Selangor and the best and significantly known microfinance institution (MFI) is Amanah Ikhtiar Malaysia (AIM).
Background of the study
This study research about microfinance and its strategy to reduce the poverty among Malaysia’s citizen. Microfinance was introduced in Malaysia during the last three decades. Two types of institutions namely banking institutions and non-bank institutions offer microfinance programs. Banking institutions that offer microfinance products are Public Bank, AM Bank, EONCAP Islamic Bank, CIMB Bank, Alliance Bank, United Overseas Bank, Bank Simpanan Nasional, Agro Bank and Bank Rakyat.
The