The Malaysian microfinance system and a comparison with the Grameen Bank (Bangladesh) and Bank Perkreditan Rakyat (BPR-Indonesia)

Abstract

Microfinance programme 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 subsidised by the government since their existence. This paper compares the Malaysian subsidised microfinance institutions’ lending systems with the unsubsidised microfinance institutions such as the Grameen Bank in Bangladesh and People’s Bank (Bank Perkreditan Rakyat/BPR) in Indonesia. This study found the Grameen Bank and BPR have more variety of microfinance services and flexible lending systems compared with Malaysian microfinance institutions.