A study on the sustainability of microfinance institutions in serving the low-income group in Malaysia

A microfinance scheme was introduced in Malaysia in the year 1987 as one of the alternatives to poverty eradication strategies in the country by the government. Since that time there are several institutions were created to carry out the agenda in providing small loan to the low income group to start up their small scale business trading to generate more sources of income to support their household consumption. However, for certain reason the people still do not find the microfinance as an important tool to uplift their economy positions and most of the low-income group still unaware of this golden opportunity tailored for them. In addition, the sustainability of this microfinance subsidized system implemented by Malaysia is not properly studied. This study explores on the attractiveness of the products offered by the institutions and emphasizes the options that the participant or to start utilizing the product. Through this research as well it able to promote microfinance facilities as compared to microcredit that contain conventional element which is prohibited by Muslim trades to be involve in. The study also discusses the measurement and action taken by the Islamic microfinance institutions in serving the low-income group. This paper is a qualitative method in nature with the interview method using content analysis. Report, journals publications and other related documents are analyzed in achieving the objectives. The impact of the study from the result founds that it may pave the way to a clearer implication towards how the Islamic microfinance institutions sustain their operations