Case Study

Selecting High-income Generating Activities for Microentrepreneurs: The Case Study of Amanah Ikhtiar Malaysia

Identifying activities that help borrowers earn high income from microcredit

This case study identifies income generating activities that have resulted in high income for borrowers who obtained credit from Amanah Ikhtiar Malaysia (AIM), the biggest MFI in Malaysia.

Microcredit began in Malaysia in 1987 with the establishment of AIM, which adopted the Grameen Bank model for rural microfinance. AIM aimed to alleviate rural poverty through microfinance provision to the rural poor to generate income. The study conducts a survey to obtain data on AIM members’ economic activities and income obtained from these activities. Findings indicate that:

  • Economic activities in the trading sector are lucrative and result in higher average income than activities in production and service sectors;
  • Activities that result in high monthly incomes include rubber trading, sales of cooking gas, cosmetics, body wear, paint products, jewellery, used cars and electronics.

The study suggests that AIM should provide training to its members to impart skills and knowledge necessary to take up high income generating microenterprises. AIM management should encourage borrowers to venture into these activities and discourage them from undertaking activities that result in low income.