Microfinance In Malaysia Research Articles

THE POTENTIAL FOR IMPLEMENTING MICROFINANCING FROM THE ZAKAT FUND IN MALAYSIA

Issue: The constrains to obtain a capital often involving underprivileged entrepreneurs because it is difficult to get a fund from the financial institutions. From a Muslim entrepreneur's perspective, microfinance that offered is consisting element of riba and it is prohibited in Islam. As we know, the role of zakat is huge in the economy of the Muslims. So, effective zakat distribution system is able to organize and develop society. Especially for Muslim underprivileged entrepreneurs.
 Purpose of study: This article aims to analyze first, what is the basis for the establishment of zakat distribution law over the provision of capital through microfinance? Second, is this distribution potentially to be implemented in Malaysia?
 Methodology: Qualitative data were obtained from document analysis and interview with zakat expertise in Malaysia.
 Main findings: Based on the content analysis on primary data, the findings show that there is a strong legal basis allowing zakat distribution through micro-financing. According to scholars' views in Malaysia, the distribution of zakat through microfinance has the potential to be implemented in Malaysia.
 Implications: The distribution of zakat is not limited to self- sufficiency even can be distributed through productive zakat with the provision of initial capital and revolving capital from zakat funds through microfinance. The provision of working capital through microfinance from zakat funds is a long-term goal of zakat.
 Novelty/originality: Yet, there is no zakat distribution is done through microfinance in Malaysia. Therefore, the institutions of zakat in Malaysia adopt the Baitul Mal Aceh as a model to apply the granting of working capital in the form of micro-financing which is financed from the funds of zakat. Furthermore, scholars in Malaysia also argued that the distribution of such method has great potential to be implemented in Malaysia.

The Chronology of Microfinance Development in Malaysia: A Review

This study is to discover the development of microfinance in Malaysia through a review of relevant literature. Microfinance in Malaysia, especially the operations of Amanah Ikthiar Malaysia, are based on Grameen Bank Program innovated by Muhammad Yunus in Bangladesh. Malaysia is endeavoring to be a developed nation, and new age microfinance seems to play a crucial role in eradicating poverty. Poverty and development do not complement each other, and hence, it is essential to focus on poverty eradication through various means. Here, an attempt has been made to the methodological and systematical review of the past literature on the development of microfinance, from various sources. It is hoped that this paper would provide a better understanding of the chronological flow and evolution of microfinance in Malaysia.

Assessment the Wellbeing Effects of Microfinance in Malaysia

Assessment the Wellbeing Effects of Microfinance in Malaysia

Assessing the Determinants of Profitability Performance on Islamic Microfinance in Malaysia

Assessing the Determinants of Profitability Performance on Islamic Microfinance in Malaysia

Role of Women in Achieving Shared Prosperity: An Impact Study of Islamic Microfinance in Malaysia

This paper aims, at the very minimum, to examine the role of women in achieving shared prosperity through Islamic microfinance in Malaysia. It will also examine and study the impact of Islamic microfinance, as a catalyst for women in achieving shared prosperity and hence boost the economy. Whilst there are many researches conducted by scholars on the impact of the Islamic microfinance in promoting inclusive growth, reducing inequality and accelerating poverty reduction, this paper attempts to explore the current impact of the Islamic microfinance particularly on women involvement in entrepreneurial activity in Malaysia to achieve shared prosperity.

Social Collateral Model for Islamic Microfinance

This study examines the social collateral model for Islamic microfinance in Malaysia. Using qualitative instruments on academics and officers of microfinance institutions as the sample study, this study identifies the components that should be included in the social collateral model for Islamic microfinance. Based on interviews and focus group discussions, this study found that similar to the conventional microfinance, the Islamic microfinance also include social capital, group pressure, entrepreneurship skills, and culture as the components of social collateral model. In addition, this study found that religiosity represents another important component of the social collateral model for Islamic microfinance.

Determinants of Economic Performance of Micro-Credit Clients and Prospects for Islamic Microfinance in Malaysia

This study is divided into two parts. The first part of the study utilises econometric models to assess the economic performance of clients participating in the microcredit programme of Amanah Ikhtiar Malaysia (AIM). Several proxies are used for the economic performance variable (dependent variable), including level of earnings/income, ratio of spending to income and value of assets. The regressors (independent variables) used are education level, age, amount of loan, source of income and ownership of assets. The second part of this study concentrates on analysing the prospects of introducing Islamic microfinance products to be used in microfinance activities in Malaysia. In the first part of the study, we find that the economic performance of AIM participants is significantly determined by the amount of money borrowed from AIM. Other factors found to influence the respondents’ economic performance are education level, age, gender, assets owned before joining AIM and area of residence. Because level of education is found to contribute significantly to the economic performance of AIM participants, it is suggested that AIM work to educate its borrowers, and more specifically, to provide business training. In the second part of the study, the results show that there is a great demand for Islamic microfinance products in Malaysia. The findings of the study could serve as general guidelines for microfinance institutions in designing Islamic microfinance products for either Muslims or non-Muslim micro-entrepreneurs.