The Role of Microfinance in Helping the Poor: Amanah Ikhtiar Malaysia as a Model

Abstract

The aim of this study is to highlight the role of Amanah Ikhtiar Malaysia as a foundation in reducing poverty among low-income individuals and families in Malaysia by providing microcredit to finance activities that can increase their income. The foundation seeks to be a high-level and dynamic institution that pays attention to the eradication of poverty while improving the per capita income. This study highlights the role of microfinance in reducing dependence on government loans linked to the living of the Malaysian, which are debts that must be recovered in full to achieve independence in earning through small, interest-free Islamic loans. The study explained the services provided by the institution in providing financial facilities and continuous training for entrepreneurs, especially the active women and poor families so that they are supported by Islamic microfinance in order to earn profit and expected a rapid return on investment. The study adopts deductive and analytical as well as the descriptive approach in order to reach the desired aim of the paper. The main finding of the study is the need for diversification of sources of loans for micro-enterprises for the poor through the establishment of the financial institution supporting the Islamic microfinance program.