Microfinance services and socio‐economic welfare of urban households in Sabah, Malaysia

Solarin, Sakiru Adebola; Loke, Koh Her; Suganthi, A; Ramasamy, P.; Yen, Yuen Yee; Goh, Gerald Guan Gan

doi:10.1002/pa.2528

Cited by 3 publications

(4 citation statements)

References 35 publications

(38 reference statements)

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“…Microfinance helps low-income communities through entrepreneurship and serves as an effective strategy to achieve poverty eradication. Literature indicates that microfinance enables poor households in generating more income, thus, improving their livelihood and socioeconomic status [8]. Various existing theoretical works provide a significant foundation for this research and explain how microfinance interventions affect households' socioeconomic performance.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

See 1 more Smart Citation

The Impact of Microfinance Services on Malaysian B40 Households’ Socioeconomic Performance: A Moderated Mediation Analysis

Abdullah¹,

Zainudin²,

Ismail³

et al. 2022

IJSDP

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This research examines the influence of microfinance services on the socioeconomic performance of Malaysian B40 households, which are considered vulnerable communities in Malaysia. Mainly, it explores the mediating role of entrepreneurial competencies and financial management practices in the relationship of microfinance services with households’ economic well-being, entrepreneurial success, and social wellbeing. Likewise, this research also examines the moderating role of microfinance institutions’ service efficiency in the success of microfinance services to improve households’ socioeconomic outcomes. The responses were collected from the participants of Amanah Ikhtiar Malaysia, the largest microfinance institution serving the low-income population of Malaysia. Employing the structural equation modelling approach, results show that microfinance financial services and non-financial services positively influence households’ socioeconomic performance through entrepreneurial competencies and financial management practices. On the other hand, microfinance financial services are also found to have significant direct influence on households’ socioeconomic performance. Further, results also indicate that microfinance institutions’ service efficiency positively moderates the influence of financial services to improve households’ socioeconomic performance. This is novel research that introduces human capital development as an underlying mechanism in the household economic portfolio model, suggesting that microfinance interventions develop human capabilities among their participants, which further assist them in the efficient management of financial and business affairs, thus, improving socioeconomic outcomes.

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Section: Theoretical Backgroundmentioning

confidence: 99%

“…Particularly, AIM was tasked to provide startup capital to low-income individuals and train them to enhance their entrepreneurial performance [2]. In this regard, AIM offers various microfinance financial and non-financial services to help their clients in enhancing socioeconomic outcomes [8].…”

Section: Introductionmentioning

confidence: 99%

The Impact of Microfinance Services on Malaysian B40 Households’ Socioeconomic Performance: A Moderated Mediation Analysis

Abdullah¹,

Zainudin²,

Ismail³

et al. 2022

IJSDP

View full text Add to dashboard Cite

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“…Three different dimensions of microcredit that are found to be effective are duration of loans received, amount of loans and number of employees. Solarin et al (2020) investigated the effect of microfinance services on the socio-economic welfare of low-income earners in Sabah, Malaysia. Using a regression analysis, the results show that training, microcredit, savings, micro insurance, and social intermediation service reduces poverty among the low-income earners covered in the study.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The current papers have focussed on other regions (Khan et al, 2020). There are also few papers on Malaysia (Solarin et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Microfinance Services and Poverty Reduction in Sarawak, Malaysia

Solarin¹

2021

IJEFI

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Despite the efforts of various federal and regional governments over the years, poverty still exists in several places across the world, especially in the developing countries. Microfinance services have been promoted as viable tools to decrease poverty. Sarawak, Malaysia is an example of a region where microfinance services are being used to reduce the incidences of poverty. This paper proposes a conceptual model to understand the effect of different microfinance services on poverty reduction efforts in Sarawak, Malaysia. This paper is further expanded into research hypotheses for subsequent papers on the nexus. The model will serve as a valuable guide for approaches on using microfinance services in reducing poverty.

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Evaluating the role of microfinance institutions in enhancing the livelihood of urban poor

Hasan

Singh

Agarwal

et al. 2022

JEAS

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PurposeThe goal of this research is to look at how urban microfinance affects livelihood transformation in terms of poverty reduction, living standards, social well-being, empowerment and entrepreneurship.Design/methodology/approachThis paper analyses the role of urban microfinance towards livelihood with special reference to Western Uttar Pradesh. Primary data were collected from 321 respondents who are users of a microfinance programme using a standardised questionnaire. The data were collected using a stratified random sampling technique, and the data were analysed using structural equation modelling.FindingsUrban microfinance has a considerable impact on poverty reduction, the standard of living, social well-being, empowerment and entrepreneurship in the urban poor, according to the findings.Research limitations/implicationsThe fact that the majority of the borrowers were uneducated was the most significant barrier to them filling out the questionnaire. Their anxiety was the most significant psychological obstacle to successfully answering the questions, and it took time. As a result, it is urged that proper counselling be conducted before the poor borrowers fill out the questionnaire.Practical implicationsThe current study highlights the factors that lead to the utilisation of microfinance services. This research will aid MFIs in selecting the appropriate products and services for the urban poor. The results of this study will aid them in understanding and meeting the expectations of microfinance CEOs.Originality/valueThis is a first study conducted in Northern zone of India measuring the roles urban microfinance institutions (MFIs) in uplifting the livelihood of urban poor.

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Microfinance services and socio‐economic welfare of urban households in Sabah, Malaysia

Cited by 3 publications

References 35 publications

The Impact of Microfinance Services on Malaysian B40 Households’ Socioeconomic Performance: A Moderated Mediation Analysis

The Impact of Microfinance Services on Malaysian B40 Households’ Socioeconomic Performance: A Moderated Mediation Analysis

Microfinance Services and Poverty Reduction in Sarawak, Malaysia

Evaluating the role of microfinance institutions in enhancing the livelihood of urban poor

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