An Exploratory Study of Using Micro-Credit to Encourage the Setting up of Small Businesses in the Rural Sector of Malaysia

Author: Chan, Sow Hup

Source: Asian Business & Management, Volume 4, Number 4, December 2005 , pp. 455-479(25)

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Abstract:

Eradicating poverty is a fundamental development challenge. Can micro-credit programmes be effective in poverty alleviation? This case study focuses on a replication of the Grameen Bank Approach (GBA) in Malaysia. It reviews access to capital in rural Malaysia, and examines Amanah Ikhtiar Malaysia's membership requirements, types of loan offered, and administration; how rural women use their loans; the major characteristics of the businesses; and the motivation to set up small businesses. The objective is to identify whether providing start-up loans for small businesses in rural areas can be effective in achieving the Malaysian Government's long-term objectives. Similarities between Amanah Ikhtiar Malaysia and the Grameen Bank are discussed. Suggestions are made to enhance small-business development in rural areas.Asian Business & Management (2005) 4, 455–479. doi:10.1057/palgrave.abm.9200140

Document Type: Research article

DOI: http://dx.doi.org/10.1057/palgrave.abm.9200140

Affiliations: 1: Faculty of Business Administration, University of Macau, L427 Luso Building, Taipa, Macau, People's Republic of China., Email: joannec@umac.mo

Publication date: 2005-12-01