It was recently reported in Malaysia’s ‘The Star’ online newspaper [1] that the government in the northern state of Perak on the Western Peninsula of Malaysia is to announce details of a ‘micro-credit financing model’ to help eradicate poverty during the state assembly sitting currently scheduled for 28 October 2009. Senior state minister or ‘Mentri Besar’ Dr Zambry Abd Kadir said the model would be broadly based on the Grameen methodology [2]. Dr Zambry was quoted as saying that the proposed microfinance model for Perak would focus on giving ‘the hardcore poor’ some financial assistance to start up small businesses. He also added the microfinance technique employed will have similarities to the microfinance schemes offered by Amanah Ikhtiar Malaysia (AIM) [3], one of the more established microfinance institutions in Malaysia. Previous Microcapital.Org publications on AIM have been set out in the Bibliography section below [4]. It is not currently known how much funding will be provided to support the Perak microfinance programme.
Dr Zambry was quoted as stating that the Perak state budget will be a ‘people-centric’ budget that will focus on ‘sectorial, business and socio-economic areas’. As mentioned in a previous Microcapital.Org story [5], the Malaysian state of Perak recently invited Professor Sukor Kasim to provide advice on how to eradicate income inequalities in the state of Perak. Professor Sukor was involved in the establishment and operation of AIM for many years. Details about the programme to be introduced in Perak on the advice of Professor Sukor have yet to be publicised although we have learnt from a recent informal discussion between Microcapital.Org and Professor Sukor that the forthcoming programme will target marginalised groups within Perak, including the indigenous Malays or ‘Orang Asli’, low income individuals and households from the minority ethnic Chinese and Indian groups, single mothers, beggars and the disabled. Although details have yet to be finalised, it is anticipated that the programme will aim to provide very small and customised loans to targeted individuals and assist them in improving their economic productivity levels. As shown by official statistics [6], Perak is a relatively large Malaysian state and, unlike the states of Trengganu, Kelantan, Sabah and Sarawak, is not regarded as a ‘poor’ state in Malaysia.
Microfinance in Malaysia is currently dominated by commercial banks and development financial institutions. Recent state-led initiatives in the country suggest a blurring of boundaries between financing for small and medium enterprises and micro-enterprises. Recent developments on microfinance in Malaysia have been covered in previous Microcapital.Org stories [7], [8].
By Chinq Yee Chong, Research Assistant
Bibliography
[1] Article in ‘The star’ newspaper entitled ‘perak to launch micro-credit financing to help poor’: http://thestar.com.my/news/story.asp?file=/2009/10/24/nation/20091024210240&sec=nation#
[2] Grameen Bank: www.grameen-info.org/
[3] Amanah Ihktiar Malaysia (AIM): www.aim.gov.my/
[4] Microfinance Institution AIM Receives $28 Million Grant From Malaysian Government
[6] Link to official Malaysia Department of Statistics: http://www.statistics.gov.my/portal/index.php?option=com_content&view=article&id=245&Itemid=14&lang=en
[11] MICROCAPITAL STORY: Malaysia Allows International Banks To Provide Microfinance
[12] MICROCAPITAL STORY: Bank Negara Malaysia Launches a $56.6m Micro Enterprise Fund
Similar Posts:
- MICROFINANCE PAPER WRAP-UP: “Green Energy Finance and Gender Disparity: The Case of Mountain Areas in Bangladesh,” by Sakib Bin Amin et al, Published by Copenhagen Business School
- MICROCAPITAL BRIEF: IsDB, La Poste Tunisienne to Replicate Digital Financial Services via Postal Service in Djibouti
- MICROCAPITAL BRIEF: Futu Expanding Digital Investment, Financial Education Platform to Malaysia
- MICROCAPITAL BRIEF: L-IFT Studying Fairness of Presumptive Taxation in Ethiopia
- MICROFINANCE PAPER WRAP-UP: “Impacts of Microcredit Access on Climate Change Adaptation Strategies Adoption and Rice Yield in Kwara State, Nigeria,” by Adejoke Yewande Bakare et al