Background and Purpose: Microcredit scheme was introduced to provide credit facilities for poor people to start a business activity. Microcredit creates income-generating self-employment activities that allow poor people to venture into small businesses and achieve economic independence. The scheme has been recognised as a successful tool to uplift the socio-economic status among the poor. Amanah Ikhtiar Malaysia (AIM) is the largest microfinance institution in Malaysia and therefore, its impact on the beneficiaries is crucial to be studied. This paper aims at reviewing the economic impact of AIM based on the existing literature. Methodology: Four electronic databases, which are Scopus, Science Direct, Springer and Ebscohost were used to search the literature. Subsequently 118 articles were generated from this search. However, only 13 articles which met the selection criteria were analysed. We selected only empirical studies that focused on the economic impact of AIM. Findings: Results of the review showed that income has dominated the economic impact assessment followed by asset, economic vulnerability and spending. Low concentration on the indicators other than income should be noted especially on spending as it provides a clear evidence that the recipients enjoy the economic well-being in terms of consumption expenditure. Contribution: This review reveals that microcredit has a great potential to uplift the economic status of the poor. Keywords: Amanah Ikhtiar Malaysia, asset, economic impact, income, microcredit. Cite as: Muda, N. S., & Tuan Lonik, K. A. (2020). Assessing economic impact of microcredit scheme: A review of past studies on Amanah Ikhtiar Malaysia (AIM). Journal of Nusantara Studies, 5(1), 124-142. http://dx.doi.org/10.24200/jonus.vol5iss1pp124-142
This study aims to investigate income group changes within the B40 and factors contributing to a higher income group, after utilizing microcredit from Amanah Ikhtiar Malaysia (AIM). The study was conducted in the North of Peninsular Malaysia involving the states of Perlis, Kedah and Pulau Pinang. The data was collected from 380 women micro-entrepreneurs who received AIM microcredit. The Wilcoxon signed-rank test was used to analyse the significant differences in the income changes. Meanwhile, ordinal logistic regression was applied to estimate the factors that contribute to the higher income group among the AIM women micro-entrepreneurs. The findings indicate that AIM women micro-entrepreneurs within the B40 subgroups had significantly increased their income, hence, moving them up to the higher income group. The results also indicate that education, amount of loan borrowed, business experience and business management are significant factors that influence the women microentrepreneurs likelihood to be in the higher income group. This study made a profound contribution as it demonstrated clearly the success of microcredit in elevating the income of the B40 group across different income group levels prior to receiving the loan. Therefore, this study suggests that outreach of microcredit programmes should be further extended to the B40 group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-Noncommercial 4.0 Unported License, permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.