Does socio-demographic variables matter in explaining issues and challenges in Islamic microfinance? Evidence from Malaysia
Purpose - In line with the wide acceptance of the microfinance industry globally, Islamic microfinance has also evolved rapidly in the past years to cater for the demand for Shariah-compliant microfinancing schemes. Despite this, the industry is facing various issues and challenges from both the...
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
KnE Publishing
2019
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/73446/ http://irep.iium.edu.my/73446/ http://irep.iium.edu.my/73446/ http://irep.iium.edu.my/73446/7/73446%20Does%20Socio-demographic%20Variables%20Matter.pdf |
| Summary: | Purpose - In line with the wide acceptance of the microfinance industry globally,
Islamic microfinance has also evolved rapidly in the past years to cater for the demand
for Shariah-compliant microfinancing schemes. Despite this, the industry is facing
various issues and challenges from both the clients and microfinance institutions.
This study aims to identify the issues and challenges faced by different demographic
background of microentrepreneurs receiving Islamic microfinancing from Amanah
Ikhtiar Malaysia (AIM). Methodology- It adopts the quantitative research methodology
where primary data is collected using survey questionnaires administered on 393
women entrepreneurs who are currently clients of AIM’s Islamic microfinance scheme
located in Selangor. The descriptive and cross-tabulation analyses are applied in
efforts to understand the influence of socio-demographic factors (age, education level,
duration with AIM, and times of receiving financing) on the following issues: cost of
repayment, financing period, amount of financing, distance to AIM center, group lending
mechanism, discipline among members, problematic group members, and consultation
services. Findings - The study finds that clients with different socio-demographic factors
perceived the issues differently, suggesting an influential role of clients’ demographic
factors on the microfinance intervention. Practical implications - These findings have
important implications to the microfinance industry in terms of further improving their
products that are tailor-made to the socio-demographic characteristics of their clients.
Originality – This research taken views of AIM’s microfinance recipients which were
woman entrepreneurs in Selangor directly through a survey. Results of the research
would be useful to AIM to enhance their products and services in future. |
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