The benefits of Islamic microfinance on poverty alleviation through microenterprises development: a case study of Amanah Ikhtiar Malaysia (AIM), Shah Alam branch / Nur Mahirah Mohamad Fuzi

Microfinance institution is well known for its services that gives financing to the poor for self-employment projects that generate income in allowing them to take care of themselves and their familiesto increase their quality of life. However, because of the high interest rate, immediate repayment schedule, lack of post-disbursement supervision and many other reasons, it has cause more difficulty to the borrowers than making their lives easier. To find solution to this problem, microfinance started to be viewed and studied from Islamic perspective which is to give financing that is interest-free to the borrowers. The purpose this study is conducted is because there is a limited number of study has been conducted regarding Islamic Microfinance on poverty alleviation. This gap seems yet to be left unexposed. This study is conducted to help gaining clarification and clearer understanding on the benefit of Islamic Microfinance on poverty alleviation with the hope that it can contribute to eradicate poverty in the world. Questionnaire is being used to conduct this study. 100 questionnaires are being distributed to the customer of Amanah Ikhtiar Malaysia (AIM) from Shah Alam. The four variables that are being studied in this research that are expected to give impact on poverty alleviation are family welfare, economic impact, net income and employment. Based on the findings, all of the stated variables have significant relationship with the benefit of Islamic Microfinance on poverty alleviation. The p-value for family welfare, net income and employment are 0.00 while the p-value for economic impact is 0.013.