Harmonizing to the chart above, the unemployment rate was in an increasing tendency since twelvemonth 1982 to twelvemonth 1986, where microfinance has non been introduced in Malaysia. However, there was a important lessening in unemployment rate since twelvemonth 1986, where microfinance was foremost introduced in Malaysia by AIM. Although there were little fluctuations in unemployment rate over the old ages, the unemployment rate was by and large in a decreasing tendency. This could be due to the fact that microfinance has helped eliminating poorness among the hapless by enabling them to get down up their ain concern so that they could gain their ain beginning of income independently, thereby cut downing unemployment rate.
4.1.2 Poverty Rate
As shown in the charts above, both incidence of poorness and incidence of hardcore poorness have decreased over the old ages. Poverty rate in Malaysia has reduced drastically from 19.4 in twelvemonth 1987 to 5.7 in twelvemonth 2004 and merely 3.8 in twelvemonth 2009. Hardcore poorness besides decreased significantly from 5.1 in twelvemonth 1987 to 1.2 in twelvemonth 2004 and merely 0.7 in twelvemonth 2009. This could be due to the fact that microfinance has helped cut downing poorness over the old ages by giving out loans, offering services such as nest eggs, wellness insurance and so on, thereby assisting the hapless to acquire out of poorness.
Harmonizing to the chart above, GDP of Malaysia was increasing in a slow tendency from twelvemonth 1960 to twelvemonth 1978. However, GDP has started to increase drastically since twelvemonth 1986, where microfinance was foremost introduced in Malaysia by AIM. The steep curve since twelvemonth 2003 indicates that GDP has increased significantly since twelvemonth 2003. This could be due to microcredit strategy which launch in May 2003 by the Malayan authorities to heighten microenterprises ‘ entree to fiscal supports. With these entrees to fiscal support, more hapless could put up their ain concern and generate net income, therefore lending to the addition of GDP in Malaysia. [ 52 ] In other words, microfinance plan in Malaysia has influenced the hapless in Malaysia by assisting them to walk out of the hapless by themselves as engagement in microfinace plan leads to increase in GDP.
4.1.4 Amanah Ikhtiar Malaysia ( AIM )
220.127.116.11 Outreach of AIM
Based on the chart above, outreach of AIM has been in an increasing tendency over the old ages. The outreach increased in easy from twelvemonth 1986 to twelvemonth 1990. This could be due to the fact that most of the Malaysian was non cognizant of microfinance in Malaysia as it was still new to Malaysian back so. However, the outreach of microfinance increased bit by bit since twelvemonth 1991 to 2003. This could be due to the fact that Malaysian has started cognizant of microfinance services offered by AIM. The outreach of AIM has increased drastically since twelvemonth 2003. This could be due to Malaysian started to hold assurance towards microfinance services and believe the services can help them to walk out from poorness.
18.104.22.168 Outreach of AIM
As of day of the month
Number of active borrowers
Percentage of adult females borrowers
Harmonizing to the informations above, there were 165,286 active borrowers in twelvemonth 2008 and 206,379 in twelvemonth 2009. 100 % of the borrowers were adult females. Womans were targeted because their refund records tend to be better than of work forces. Furthermore, it helps adult females by cut downing their dependence on their hubbies. Besides, adult females tend to be more concerned about kids ‘s wellness and instruction than work forces. Therefore, 100 % of AIM loan was given to adult females.
Performance Data from 1990 – 2005
Entire sum of loan taken ( RM )
Entire disbursals ( RM )
Cost per ringgit capital ( RM )
Operating autonomy ( % )
Repayment rate ( % )
The public presentation on rank growing and loans disbursed are impressive as the information showed that they have increased significantly over the old ages. The figure of loans being disbursed scopes from RM102.6 million in 1998 increasing with an upward tendency up to 128.1 million in twelvemonth 2001 and 140.7 million in twelvemonth 2002. However, AIM was unable to prolong its operational cost because the operational ego sufficiency was at 80.16 % in twelvemonth 2005 when the sum charges collected were RM19, 247,784 and the entire disbursals were RM24, 011,734. Purpose can merely accomplish its viability and sustainablity when the operating ego sufficiency is at least 100 % . [ 190 ]
Apart from that, AIM has overall good refund scope which range from 98 % to 100 % . Harmonizing to Ilias ( 2003 ) , this set back could be due to the Single Mother Loan Scheme ( SKIT ) which contributes to the hapless repayment public presentation of aggregation about merely 36 % and besides from fisherman Loan Scheme.
22.214.171.124 Entire Amount of Loan Taken ( RM )
Based on the chart above, entire sum of loan given out by AIM has been in an increasing tendency over the old ages. In other words, more Malayan was cognizant of microfinance services offered by AIM after few old ages of its debut. Therefore, entire sum of loan taken has started to increase bit by bit since twelvemonth 1993. The loan sum taken increased extensively since twelvemonth 2003 due to…………….why
126.96.36.199 Entire Expenses ( RM )
Based on the chart above, entire disbursals of AIM have increased over the old ages. The addition in entire disbursals could be due to increased work load and figure of staff caused by increasing entire sum of loan taken by clients over the old ages. More staff was needed to manage loan applications and to serve the clients.
188.8.131.52 Cost per Ringgit ( RM )
As shown in the chart above, cost per Ringgit capital has reduced bit by bit over the old ages. This was because entire sum of loan taken increased faster than the addition in entire disbursals.
4.1.5 Number of Labor Force by Educational Attainment
Harmonizing to the chart above, the educational attainment has been in an upward tendency over the old ages. This could because the hapless has started obtaining microloan and spent it for educational intents. Therefore, the figure of labour force who attained third and secondary instruction have increased over the old ages. On the other manus, labour force that attained merely primary instruction or without formal instruction have decreased over the old ages.
4.1.6 Gross Domestic Savings ( Current US $ )
As shown in the chart above, gross domestic nest eggs increased bit by bit since twelvemonth 1960. The gross domestic nest eggs increased significantly since twelvemonth 1990, two old ages after the debut of microfinance in Malaysia. This could be due to the fact that microfinance has taught the hapless to salvage. Therefore, it has partly contributed to the increasing tendency of gross domestic nest eggs.
4.1.7 Gross Domestic Income and Gross National Income
Based on the graph above, both gross domestic income and gross national income have increased bit by bit from twelvemonth 1960 to twelvemonth 1986. The gross income increased drastically after twelvemonth 1988, two old ages after the debut of microfinance in Malaysia. Therefore, the addition could be due to the increased loan given out as microloans. These microloans might hold been used as concern start up capital to put up a concern, thereby bring forthing income.
4.1.9 Gross Domestic Savingss
Based on the chart above, there was merely little addition in gross domestic nest eggs before twelvemonth 1986. The gross domestic nest eggs increased significantly after twelvemonth 1986, the twelvemonth where microfinance was foremost introduced in Malaysia. This indicates that microfinance has taught the hapless to salvage, taking to increase in gross domestic nest eggs.
4.1.8 Lending to SMEs
Based on the chart above, imparting to SMEs has increased over the old ages. Addition in imparting to SMEs might hold contributed to the increasing tendency of gross domestic income as more of the hapless had obtained SME loans to get down up concern, thereby increasing gross national income.
4.1.9 No. of Institutions Reporting and Clients Reached
Based on the charts above, figure of establishments describing which offer microcredit is increasing over the old ages. Besides, figure of clients reached is besides increasing over the old ages. In order words, there demand for microcredit is increasing among the hapless. This indicates that the consciousness and outreach of microfinance has increased over the old ages.
4.1.10 Number of Poorest Clients Reported
Based on the chart above, figure of hapless clients reported increased bit by bit from twelvemonth 1997. This could be because the consciousness of microfinance among the hapless was non high. The consciousness among the hapless started addition significantly since twelvemonth 2001……………why
4.1.11 Value Added Growth of SMEs versus Overall GDP Growth
Based on the chart above, the value added growing of SMEs have systematically outperformed that of the overall GDP growing
When the logo introduced? ? 2007
4.2 Primary Data Analysis
Friends and household
Personal nest eggs
Based on the chart above, most of the respondents obtained their start up capital through personal nest eggs, commercial Bankss and microfinance establishments. 49 % of the respondents obtained their start up capital through commercial Bankss while merely 33 % of the respondents obtained their start up capital through microfinance establishments. This indicates that the outreach of microfinance in Kuala Lumpur country is low. This could be due to the low consciousness of microfinance where most of the people in the metropolis are non cognizant of microfinance plan. Therefore, the microfinance plans are unable to make the hapless.
Based on the chart above, bulk of the respondents, where 61 % of them are non cognizant of microfinance plans while those of them who are cognizant of microfinance plan occupied 39 % of the consequences. This indicates that consciousness in Kuala Lumpur country is non high plenty as bulk respondents are non cognizant of microfinance plan.
Based on the chart above, most of the respondents got to cognize about microfinance through their friends and household, followed by bank officer, advertizements and cyberspace. This indicates that MFI have non advertised plenty, doing low awarenes, thereby low outreach.
Based on the chart above, bulk of the respondents, where 69 % of them have non applied for microloan. Microfinance clients occupied merely 31 % of the respondents. This shows that the outreach of microfinance is low as the consciousness is low.
16 + 8
The chief use of the microloan is as concern capital, followed by as educational financess. This shows that the clients obtained the microloan as concern capital to get down up their concern. In other words, the microloans are used in assorted income generating activities. Based on the graph XX, microloans are normally used in service industry every bit good as nutrient and drinks industry.
Besides concern capital, 52 % of the clients obtained the loan for educational demands. Recognizing the importance of instruction, AIM introduced a particular loan strategy for instruction get downing twelvemonth 1990. It is limited to RM500 with RM5.00 service charge and is allocated among members who have completed the first loan. The loan can be used by members to ease their kids ‘s instruction [ 183 ] . This has contributed to the increased of educational attainment in Malaysia where figure of labour force who attained third and secondary instruction have increased over the old ages.
On top of that, 6 % of the clients have applied loan for nutrient and day-to-day demands and 13 % of them used it for wellness attention intents such as insurance disbursals.
Based on the chart above, 28 out of 31 clients ‘ loan took less than one month to be approved. Merely 3 out of 31 clients ‘ loan took one to three months to be approved and none of the clients ‘ loan took more than 3 months to be approved. The microloans by and large take minimal twenty-four hours to maximum 10 yearss to be approved. Harmonizing to the a client of Eoncap Islamic Bank, her loan took merely 4 yearss to be approved after she submitted all the paperss needed. This indicates that microfinance provides speedy and easy entree to funding for the hapless.
Based on the chart above, 28 out of 31 clients think that microloan is utile for them as it enables them to get down up their ain concern every bit good as paying off their disbursals such as educational fund and insurance disbursals. Most of the clients used to populate below the poorness line and were non eligible for commercial loans. Microcredit provides an option that operates without the demand for collateral. Besides, microfinance requires merely minimal certification and simple process with flexible term of offices.
Therefore, most of the clients find it easy to be applied and helpful. Apart from that, some of the clients think that the loans are utile as it enables them to bring forth their ain income, work themselves out of the hapless and finally derive complacency and respects from others. However, there are 3 of the clients think that the loans are non utile as they think that the involvement of microloan is non appropriate as some of the Bankss charge somewhat higher involvement than of commercial loans.
Based on the chart above, 19 of the clients think that involvement rates charged by MFIs are appropriate while 12 out of 31 clients think otherwise. This could be due to the fact that
Some Bankss or MFIs charge higher involvement rates for microcredit compared to commercial loans in order to counterbalance themselves for the default hazard they take and to cover their cost, thereby guarantee their fiscal sustainability. To exemplify, imparting out a million dollars in 100,000 loans of RM100 each will evidently necessitate a batch more in staff wages than doing a individual loan for the entire sum. Therefore, involvement rates charged by MFIs are well higher than the rates charged on normal bank loans. ( hypertext transfer protocol: //www.cgap.org/p/site/c/template.rc/1.26.1309/ ) . For illustration, historically, AIM levied ‘service charge ‘ on loans instead than involvement expressed in per centum footings. If calculated as involvement on chief involved, these charges were good below rates in the Malayan commercial banking sector. As a consequence, these service alterations covered merely a part of AIM ‘s loaning costs ( Conroy, Taylor and Thapa, 1995, 21 ) . To better the overall sustainability, AIM has progressively focused on supplying larger sized and higher involvement loans and functioning non-hardcore hapless. Therefore, about half of the clients think that the involvement rates of microcredit are inappropriate.
Based on the chart above, 20 out of 31 clients have participated in other microfinance plans while the staying 12 have non participated in other microfinance plans
Based on the chart above, most of the microfinance clients have participated in nest eggs service and Self-Help group of microfinance plans where nest eggs resulted in 90 % . The salvaging service has taught the hapless to salvage, thereby lending to gross domestic nest eggs. 65 % of the clients have participated in Self Help Group of AIM which requires female campaigner to organize her ain group dwelling of five members. Subsequently, they have to go to seven yearss developing, one hr per twenty-four hours, organized by AIM ‘s subdivision office. Every member in the Self Help Group has to refund the loan every hebdomad harmonizing to the sum she borrowed. Besides, every member has to lodge RM1 in Group Fund every hebdomad and has to let 5 per centum of the entire loans to be deposited in Group Fund. Besides that, there are 45 % of the clients participated in life insurance and wellness insurance plans. This indicates that the hapless are instead concerned about their wellness and realized the importance of insurance. [ 183 ]
Based on the chart above, some of the clients think that the plans such as Self Help Group are clip devouring as they are required to go to centre meeting every hebdomad. Besides, some of the clients are non familiar with the services offered and there are besides clients who think that the plans are non helpful.
Based on the chart above, 27 of the clients think that microfinance has helped them in acquiring out of poorness. This indicates that microfinance is a helpful tool in assisting the hapless and eliminating poorness. However, there are 4 clients think that microfinance has non helped them in acquiring out of poorness. This could be due to the high involvement rates charged by MFIs as many of the hapless find it hard to refund back the loan with such a high involvement rates.
As shown in the chart above, bulk of the respondents did non take up microloan because they are incognizant of the services. This indicates that microfinance is non popular among people in the metropolis. Besides that, some of the respondents do non believe that they need it as they have entree to better beginning of funding such as Islamic finance where no involvement are charged on the loans. Therefore, they think that it is be better to take up Islamic loans alternatively of microloans.
26 + 28 + 30
Based on the chart above, bulk of the respondents, which is 71 % prefer commercial loans to microfinance loans. This could be due to the low consciousness among the people, which leads to miss of proper apprehension of microfinance. Therefore, people prefer commercial loans. Besides, some respondents prefer commercial loans because they find that the involvement rates charged by commercial loans are more appropriate, they require less process and offer more satisfying services. There are 29 % of the respondents prefer microfinance loans. Most of them are made up of microfinance clients. As shown in the chart 30, the clients prefer microfinance loans because it requires short blessing period and less process, where no collateral needed. This indicates that microfinance is so a helpful tool in walking people out of the hapless.