ASSESSING ECONOMIC IMPACT OF MICROCREDIT SCHEME: A REVIEW OF PAST STUDIES ON AMANAH IKHTIAR MALAYSIA (AIM)

Abstract

Background and Purpose: Microcredit scheme was introduced to provide credit facilities for poor people to start a business activity. Microcredit creates income-generating self-employment activities that allow poor people to venture into small businesses and achieve economic independence. The scheme has been recognised as a successful tool to uplift the socio-economic status among the poor. Amanah Ikhtiar Malaysia (AIM) is the largest microfinance institution in Malaysia and therefore, its impact on the beneficiaries is crucial to be studied. This paper aims at reviewing the economic impact of AIM based on the existing literature.
 
 Methodology: Four electronic databases, which are Scopus, Science Direct, Springer and Ebscohost were used to search the literature. Subsequently 118 articles were generated from this search. However, only 13 articles which met the selection criteria were analysed. We selected only empirical studies that focused on the economic impact of AIM.
 
 Findings: Results of the review showed that income has dominated the economic impact assessment followed by asset, economic vulnerability and spending. Low concentration on the indicators other than income should be noted especially on spending as it provides a clear evidence that the recipients enjoy the economic well-being in terms of consumption expenditure.
 
 Contribution: This review reveals that microcredit has a great potential to uplift the economic status of the poor.
 
 Keywords: Amanah Ikhtiar Malaysia, asset, economic impact, income, microcredit.
 
 Cite as: Muda, N. S., & Tuan Lonik, K. A. (2020). Assessing economic impact of microcredit scheme: A review of past studies on Amanah Ikhtiar Malaysia (AIM). Journal of Nusantara Studies, 5(1), 124-142. http://dx.doi.org/10.24200/jonus.vol5iss1pp124-142