A study on Bank Pertanian Malaysia, Sarawak Branch: the sustainability in providing microfinance for poverty alleviation / Kamal Abg Abu Bakar

Poverty in Malaysia is predominantly a rural problem with 60 percent of the poor in the country residing in the rural areas and mostly are relying on agriculture activities as a source of earning. Latest statistic shows that 1.5 million Malaysians are classified as living in poverty earning a monthly income of RM580.00 in which about 140,000 of them are in Sarawak. For that reason, micro finance is an opportunity for them to access start-up or additional capital to make a living and survive! The establishment of Bank Pertanian Malaysia as a development bank is to provide and regulate credit and other facilities for the promotion and development of economic activities in the rural areas. However, BPM Sarawak branch was accused of having poor collection rates, which lead to the micro finance program being ceased. Based on its financial year ending 31st December 2001, micro credit figure is less than 5% from the total loans portfolio for Sarawak with no new micro finance loan approved or developed. The problem of BPM Sarawak is to sustain its microfinancing. This study determined the people’s awareness and understanding toward micro finance offered by Bank Pertanian Malaysia and the cause & effect relationship of the factors affecting the capability of the bank to sustain. The research further tries to identify BPM’s market segment, its attributes that influence the choice of the facility, and to understand the public’s perception on BPM micro finance.