In most countries, micro-credit programs can be regarded as an effective instrument in
encouraging public participation towards both political and economic processes of the
country as well as proven tool implemented to free people from the low standard of
living. In the pursuit of lowering the rate of poor population in the country, the
government of Malaysia had taken an initiative to work together with nongovernmental
organizations (NGOs) and private sectors. As the result, several
agencies including Amanah Ikhtiar Malaysia (AIM), Tabung Economi Kumpulan
Usahawan National (TEKUN), Bank Simpanan and AgroBank were established to
assist the poor and hardcore poor people by providing loans for their businesses both
in urban and rural areas in Malaysia. Micro-credit era begins with the establishment of
Amanah Ikhtiar Malaysia in the year of 1987 that inspired by Grameen Bank Model
for microfinancing in rural areas in Bangladesh. Total respondents of 302 of Amanah
Ikhtiar Malaysia members have been collected. By using factors such as educational
background, loan sufficiency and training provision as the chosen factors, it shows
that the most influential factors that affects the effectiveness of AIM is loan
sufficiency, followed by educational background and training provision. Based on the
Pearson correlation results. It indicates that, there are positive significant relationship
between all of the factors namely educational background, loan sufficiency, training
provision and the effectiveness of AIM in improving the welfare of its beneficiaries.
The research hopes to contribute in helping Amanah Ikhtiar Malaysia to improve its
services to low income people.
