Microcredit and Economic Wellbeing: A Study Among the Urban and Rural Members of Amanah Ikhtiar Malaysia (AIM)

Abstract

This study is designed to investigate the effects of capital equity fund accessibility and the development of microenterprise training programmes on micro-entrepreneurship, economic vulnerability, and household income among members of Amanah Ikhtiar Malaysia (AIM). This research adopted a cross-sectional study design and collected data through questionnaires and structured interviews. The participants were 523 impoverished families and low-income households in Peninsular Malaysia who were selected based on the information provided by AIM. Multiple regression analysis was used to analyse the collected data. The outcomes of this study presented some concrete evidence that access to the working capital generated a positive impact on low-income households and decreased the economic vulnerability among low-income urban and rural members of AIM. Furthermore, it was also found that the elongation of the participation period had a negative impact on microenterprise income and lowered the economic vulnerability level among the urban participants but displayed an opposite effect among the rural participants. In contrast, economic loan received had a positive impact on urban participants but negatively impacted the microenterprise income of rural participants. This study has extended the assets and financial approach of the neoclassical theory and also the understanding of low-income communities by offering some policy development to increase poverty eradication among the urban and rural low-income members of AIM in an emerging economy.