1.

0 INTRODUCTION

Microcredit or also known as microfinance programs are developed

based upon the concept of Grameen Bank. As far as we had
understood, Grameen Bank was established by Prof. Mohamad Yunus,
to help the poor, especially women in Bangladesh, to be self-reliance by
growing their own business. The concept of Grameen Bank is to provide
small loan for the people to establish a business to climb out of poverty.

In general, poverty had become one of the major social problems around
the globe including Malaysia. Since Malaysia’s vision is to become a
developed nation, thus it is significant that the poverty within society
should be eradicated. As we can observe, Malaysia had been inspired
and thus embraced the concept of Grameen Bank by introducing
microcredit programs. With the microcredit programmes, we can
conclude that Malaysia is striving to achieve one of the missions listed in
the Malaysia’s New Economic Policy (NEP), which is reducing poverty.

1.1 Definition of Microfinance or Microcredit

As mentioned earlier, the concept of microcredit is based upon the

framework of Grameen Bank, which was established to finance the poor
to become an entrepreneur. So, to achieve the objective mentioned
earlier, some microfinancing institutions had been established. So,
based on our research, there are several governmental agencies as well
as not-for-profit entities are providing this microcredit facilities to the
people in need.

1.2 MICROCREDIT PROVIDERS

As mentioned earlier, there are 2 categories of microfinancing entities,
which are government and entities other than government. Based on
Mokhtar et. al. (2012), there are 4 main microfinancing institutions
established, which are Amanah Ikhtiar Malaysia (AIM), Yayasan Usaha
Maju (YUM), Economic Fund for National Entrepreneurs Group (TEKUN)
as well as People’s Credit Cooperation (KKR). Mokhtar et. al. (2012) had
further stated that YUM and TEKUN are governmental agencies,
whereas AIM is an NGO and KKR is a credit association.

There are non-governmental microcredit scheme providers

1. Yayasan Usaha Maju – Sabah
2. Koperasi Kredit Rakyat
3. Amanah Ikhtiar Malaysia (AIM)

1.3 NON-GOVERNMENTAL MICROCREDIT PROVIDER

Governmental agencies: -
Agricultural Bank of Malaysia (BPM)
Farmers Organisation Authority (LPP)
MARA
FELDA

https://banktani.tripod.com/microfinance.htm#:~:text=There%20are%20a
%20number%20of,Amanah%20Ikhtiar%20Malaysia%20(AIM).
2.0 Successes and Drawbacks of Microcredit Businesses

Based on the reasech, we can conclude that the micro financing is a

successful business.

Analyze the successes and drawbacks of micro-credit

businesses financing entities of governmental organizations
and non-governmental organizations(NGOs) in Malaysia.
(Study both the numbers of organizations active , minimum
and maximum amount of loan approved per applicant (in the
process), estimated total volume of funds ditched out till to-
date, cost of funds/interest rates charged, minimum and
maximum duration of lending/borrowing period adopted as well
as vital facts and figures that can be shared by all and
experiences encountered by these organization as a learning
curve.)
REFERENCES

Ahmad, I. (n.d.). Current Situation of Microfinance in Malaysia and Its Issues.

https://banktani.tripod.com/microfinance.htm#:~:text=There%20are%20a%20number
%20of,Amanah%20Ikhtiar%20Malaysia%20(AIM).

Microfinance / Microcredit in Malaysia. Loanstreet. (2018, October 19).

https://loanstreet.com.my/learning-centre/microfinance-microcredit-in-malaysia.

Mokhtar, S. H., Nartea, G., & Gan, C. (2012). The Malaysian microfinance system and a
comparison with the Grameen Bank (Bangladesh). Journal of Arts and Humanities
(JAH), 1, 60–71.

Mokhtar, S. H., & Ashhari, Z. M. (2015). Issues and Challenges of Microcredit Programmes
in Malaysia. Asian Social Science, 11(26). https://doi.org/10.5539/ass.v11n26p191

Mokhtar, S. H. (2011). Microfinance performance in Malaysia: a thesis submitted in partial

fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at
Lincoln University (thesis). Lincoln University, Christchurch.