Comparing the Effect of Amanah Ikhtiar Malaysia's (AIM) Microcredit Program on Quality of Life in Urban and Rural Malaysia

African Journal of Business Management, Vol. 5(34), pp. 12981-12995, December 28, 2011

16 Pages Posted: 7 Mar 2013

See all articles by Abdullah Al Mamun

Abdullah Al Mamun

Universiti Malaysia Kelantan; Binary University College; Multimedia University

Joseph Adaikalam

Binary University College

Sazali Abdul Wahab

National Defence University of Malaysia

Mohammad Nurul Huda Mazumder

Multimedia University

Date Written: December 30, 2011

Abstract

This study was undertaken to measure and compare the impact of Amanah Ikhtiar Malaysia’s (AIM) microcredit programs on low-income household’s quality of life between urban and rural Peninsular Malaysia. To achieve the aforementioned objective, this study employed a cross-sectional data analysis using stratified random sampling method to examine whether participation in AIM’s microcredit programs improved the quality of life of low-income households. A quality of life index was developed using eleven selected indicators, namely, use of permanent housing materials for the walls, floors and roofs, environmentally safe cooking fuel, better access to public water supply and healthy sanitary facilities. Findings of this study revealed that with participation in AIM’s microcredit programs, the quality of life index as measured by these indicators improved for urban households. In fact, the overall quality of life among AIM borrowers was found to improve after participation. The current level of quality of life of the low-income urban households also appeared to be better than that of poor rural borrowers’ households. The results suggest that AIM should, therefore, focus on increasing the outreach by targeting ‘low income clients’ in urban as well as rural Malaysia. Moreover, AIM also should review and re-organize their programs in order to come up with a dynamic and well-diversified microfinance program to fulfill all financial needs of urban clients.

Keywords: microcredit, poverty, quality of life, welfare, Malaysia

Suggested Citation

Mamun, Abdullah Al and Adaikalam, Joseph and Abdul Wahab, Sazali and Mazumder, Mohammad Nurul Huda, Comparing the Effect of Amanah Ikhtiar Malaysia's (AIM) Microcredit Program on Quality of Life in Urban and Rural Malaysia (December 30, 2011). African Journal of Business Management, Vol. 5(34), pp. 12981-12995, December 28, 2011. Available at SSRN: https://ssrn.com/abstract=2229074

Abdullah Al Mamun (Contact Author)

Universiti Malaysia Kelantan ( email )

Karung Berkunci 36
Pengkalan Chepa
Kota Bharu, Kelantan 16100
Malaysia

HOME PAGE: http://www.umk.edu.my/rasmi/

Binary University College ( email )

Bandar Puchong Jaya
47100 Selangor
West Malaysia
Malaysia

Multimedia University ( email )

Persiaran Multimedia
Cyberjaya, Selangor Darul Ehsan
Malaysia

Joseph Adaikalam

Binary University College ( email )

Bandar Puchong Jaya
47100 Selangor
West Malaysia
Malaysia

Sazali Abdul Wahab

National Defence University of Malaysia ( email )

Kem Sungai Besi
Kuala Lumpur, Selangor 57000
Malaysia

Mohammad Nurul Huda Mazumder

Multimedia University ( email )

Faculty of Management
Cyberjaya
Malaysia

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