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By Prof Sukor & Mohamad Nazri

Percentage of Population living on less than $1 a day (http://wikipedia.org)

Through out the 70s and 80s USM’s Centre for Policy Research was engaged in poverty related research. In 1984 the centre recommended to Prime Minister’s Department a microcredit scheme to be available to poor and landless farmers. 1986 : USM initiated a microcredit scheme known as the Projek Ikhtiar. It was the first international replication of the Grameen Bank. 1987 : Projek Ikhtiar was transformed into Amanah Ikhtiar Malaysia (AIM), which is now the largest Micro Finance Institutions (MFI) in Malaysia. 2011 (May): 272,923 members and disbursed over RM 5.3 billion

1996 : USM initiated a 2nd microfinance scheme, Tabung Ekonomi Kumpulan Usaha Niaga (TEKUN), which later transformed to TEKUN Nasional. 2011 (April):disbursed over RM 1.69 billion to 183,364 entrepreneurs (45.8% women)

TECHNICAL SUPPORT TO STATE GOVERNMENTS
Project Titian Saksama Rakyat Penang (PTSR)

2009 :KANITA/USM started the Project Titian Saksama Rakyat Penang (PTSR) together with Penang Development Corporation (PDC). Bridging inequality gap through micro-credit to the bottom 40% of the Penangites. Until 2010 RM 1.47 million is distributed to 400 Rakan Mauffakat

Microcredit Yayasan Bina Upaya, Perak

2010: KANITA/USM advised the Perak state government on microcredit. June 2011: RM 3.4 million is distributed to 223 men and 177 women.

 2008 : USM introduced the Micro-Pinj project, a microloan scheme to its low income staff. The project is financed from donation by USM’s staff of all levels.  August 2011: Miro-Pinj mobilised over RM 160,000, from the staffs, and disbursed over 157,000 to 42.

OPERATING EFFICIENCY
Year 2001 2002 2003 2004 2005 Branch 62 63 63 69 69 Active client 68,461 75,563 74,557 123,950 134,492 No FA 573 476 476 526 507 Av client per FA 127 153 147 235 265 Av Client/Br 1,180 1,157 1,114 1,796 1,949 % OE 42.1 41.3 39.8 60.9 66.2

2006
2007 2008

68
69 76

144,879
161,749 183,970

510
515 515

284
314 357

2,129
2,344 2,666

71.3
79.6 90.5

FINANCIAL PORTFOLIO
Tahun CAPITAL PROVIDED (RM) 128,126,650 140,712,480 152,082,150 325,969,550 304,198,630 344,883,284 432,246,370 565,911,058
OPERATIONAL

TOTAL EARNINGS (RM)

% OSS

OVERHEAD

COST Per RM
CAPITAL

(RM) 22,646,084 20,933,315 21,213,575 24,011,734 28,377,169 33,811,868 37,784,928 58,780,691

2001 2002 2003 2004 2005 2006 2007 2008

25,405,578 27,092,390 24,438,061 19,247,784 33,123,907 44,130,663 54,593,496 68,422,255

112.19 129.42 115.20 80.16 116.73 130.52 144.50 116.40

0.18 0.15 0.14 0.07 0.09 0.10 0.09 0.10

REACHING POTENTIAL CLIENT

STAYING IN DIPILADATED HOUSE

SCRATCHING FOR DAILY LIVING

WORKING FOR DAY’S NEED

Reaching The Poor

REACHING THE POOR : AIM STAFF

REACHING THE POOR : AIM STAFF

REACHING THE POOR : AIM STAFF

4.6 OVERALL IMPACT SHOWS THAT:
• 90% AIM’S MATURE CLIENTS (MORE THAN 6 YRS IN PROGRAM) OUT OF POVERTY • 10% STILL POOR • 25% INCOME RM 529 – RM 1,000 • 37.89% INCOME RM 1,001-RM 2,000 • 20.66% INCOME RM 2,001 – RM 5,000 • 5.74 % INCOME MORE THAN RM 5,000
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Breaking the vicious cycle of poverty
Credit Credit
More Investment More Investment More Income LC3 More Savings

More Income LC2

More Savings
Low Income LC1 Low Savings
Low Investment

Albukhary Blue ocean strategy

1. Developing alternative Islamic Microfinance finance products (3 M). 2. Increasing sustainable livelihood for the poorest households

Low Income 2 Being serviced by existing MFI Low Income 1 T Poor Very Poor

Islamic Micro finance product 3M: 1. Musyarakah 2. Mudarabah 3. Murabahah

COUNTRY

Bangladesh

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MICRO FINANCE PROVIDERS

BURO, formerly BURO Tangail Grameen Bank ASA FINADEV Microfinance Bank Finca Microfinance Groupe Soficom Dakahlya Businessmen’s Association for Community Development Amhara Credit and Savings Institution Dedebit Credit and Savings Institution Oromia Microfinance Asmitha Microfin Ltd. Grameen Koota SKS Microfinance Private Limited SEWA: Self-help Women’s Association

Chad Congo (Democratic Republic)

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Egypt

Ethiopia

India



Jordan

SIDBI – Small Industries Development Bank of India
CASHPOR Development and Employment Fund

SOME EXAMPLES OF WORLD MICRO FINANCE INSTITUTIONS

Kenya

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Kazakhstan One Acre Fund Kosovo Khan Bank (Agricultural Bank of Mongolia LLP)
Estate Microfinance Bank Kashf Foundation Tameer Micro Finance Bank Limited

Mongolia

Nigeria Pakistan

Ongoing research projects:  - Corporate governance and ownership issues in the microfinance industry  - Management, performance and efficiency in microfinance institutions  - International business & microfinance  - Livelihood, self-employment and microfinance for disabled persons  - Gender issues in microfinance with particular focus on management and institutional performance  - Customer – bank relationships in microfinance  - Savings and credit groups – their impact and their performance

MICRO FINANCE FINANCIERS/ PARTNERS 1. Interested in partnering with Kiva?
 In order to become a Field Partner with Kiva, a microfinance institution must, at a minimum:  Serve at least 1,000 active borrowers with microfinance services. (Not a requirement for U.S. partners.)  Have a history (at least 2-3 years) of lending to poor, excluded, and/or vulnerable people for the purpose of alleviating poverty or reducing vulnerability  Be registered as a legal entity in its country of operation  Have at least 1 year of financial audits

2. Grameen Foundation - By helping local microfinance institutions become more effective, and by providing the poor with innovative mobile phone-based solutions, we’ve helped millions pull themselves out of poverty 3. Multinationals 4. Local based companies 5. Government