Abstract
The main aim of this paper is two‐fold: first, to discuss the role of micro‐finance institutions (MFIs) in promoting informal sector in Malaysia; second, to identify issues and policy measures on MFIs and the informal sector. The paper attempts to suggest that there is a strong need for having formal polices and institutions to service the informal sector and tap their potential for economic regeneration. This paper focuses on six micro‐finance programmes, namely, Amanah Ikhtiar Malaysia, Yayasan Usaha Maju, Koperasi Kredit Rakyat, Kooperasi Kredit Pekerja, Partners in Enterprise Malaysia and Projek TEKUN. This paper concludes by reviewing issues and challenges of MFIs.
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