Islamic Microfinance in Malaysia: Issues and Challenges
In many countries, microfinance has been proven to be an effective tool in enabling the low-income segment of the society to borrow and kick-start small businesses. There are three important microfinance institutions in Malaysia, namely, Amanah Ikhtiar Malaysia (AIM), Yayasan Usaha Maju (YUM), and Tabung Ekonomi Kumpulan Usahawan Niaga (TEKUN). In accordance with Islamic law, any element of usury must be avoided entirely in economic transactions, hence resulting in the imposition of management fees on the borrowers instead of interest. This chapter seeks to study the issues and challenges faced by Islamic microfinance institutions in the Malaysian context.
KeywordsIslamic microfinance Low income AIM Malaysia
- Amanah Ikhtiar Malaysia. (2012). The role of microfinance in poverty alleviation: AIM’s experience. International Islamic Accounting and Finance Conference.Google Scholar
- Aziz, E. B. A. (2008). State-Ngos relationship as partners in poverty reduction: A study of two Ngos in Malaysia. Dissertation, International Islamic University Malaysia.Google Scholar
- Bank Nagari. (2009). Bank Perkreditan Rakyat’s operation reports. Padang: Bank Nagari Sumatra Barat, Indonesia.Google Scholar
- Bank Negara Malaysia. (2007). Financial stability and payment systems report 2009: Malaysia’s microfinance framework. Bank Negara Malaysia. http://www.bnm.gov.my/files/publication/fsps/en/2009/cp01_003_whitebox.pdf. Accessed 3 Mar 2017.
- Bank Negara Malaysia. (2014). Questions and answers on Pembiayaan Mikro and micro enterprise fund. Bank Negara Malaysia. http://www.bnm.gov.my/documents/sme/FAQ_on_Pembiayaan_Mikro_English.pdf. Accessed on 20 Mar 2017.
- Convergences Barometers. (2014). Microfinance barometer 2014. Convergences Barometers. http://www.citigroup.com/citi/microfinance/data/lebarometre.pdf. Accessed 7 Mar 2017.
- Department of Statistics Malaysia. (2012). Economic census 2011: Profile of small and medium enterprises. Department of Statistics. https://www.dosm.gov.my/v1/uploads/files/BanciBE/Penerbitan_Profil_PKS_2011.pdf. Accessed 10 Mar 2017.
- Fernando, N. (2008). Managing microfinance risks: Some observations and suggestions. Asian Journal of Agriculture and Development, 4(2), 1–22.Google Scholar
- Gibbons, D. S., & Kasim, S. (1990). Banking on the rural poor in Peninsular Malaysia. Business and Economics, 6, 111.Google Scholar
- Grewal, B. K. (2011). Constraints on growth in Islamic finance. IFSB 4th Lecture on Financial Policy and Stability.Google Scholar
- Islam, T. (2007). Poverty alleviation impact on Grameen microcredit. In Microcredit and poverty alleviation (pp.165–167). Hampshire: Ashgate Publishing Limited.Google Scholar
- Kasim, S. (2000). Financing South East Asia’s economic development. Institute of South East Asian Studies.Google Scholar
- McGuire, P. B., Conroy, J. D., & Thapa, G. B. (1998). Getting the framework right: Policy and regulation for microfinance in Asian. http://dev.bwtp.org/wp-content/knowledgecentre/books/Getting-the-Framework-Right.pdf. Accessed 22 Mar 2017.
- Mokhtar, S. H., Nartea, G., & Gan, C. (2012). The Malaysian microfinance system and a comparison with the Grameen Bank (Bangladesh) and Bank Perkreditan Rakyat (BPR-Indonesia). Journal of Arts and Humanities, 1(3), 60.Google Scholar
- Sabah, Y. U. M. (2017). Sejarah Ringkas YUM. Yayasan Usaha Maju. http://www.yumsabah.com.my/my/index.php/mengenai-yum/sejarah-ringkas-yum. Accessed 20 Mar 2017.
- Sabah Tourist Association. (2017). People and culture. Sabah Tourist Association. http://www.sta.my/people_culture.cfm. Accessed 20 Mar 2017-06-09.
- TEKUN. (2009). Operational reports 2009. Kuala Lumpur.Google Scholar
- Yunus, M. (2007). Creating a world without poverty: Social business and the future of capitalism. New York: Public Affairs.Google Scholar