Needs of microfinance among lower income earner / Muhammad Syahban Abdul Rahman

Microfinance focus on poverty alleviation by providing easier credit access to the lower income earner. Microfinance is extending credit to people who do not have access to formal credit from financial institution. The issue here, lower income individuals are capable of lifting themselves out of poverty if given access to financial services like the existence market of microfinance offer loan contract for poor client which is different from other loan financing. A Microfinance programed was introduced to Malaysia in 1987 as one of the poverty eradication strategies in the country. Amanah Ikhtiar Malaysia (AIM) was the first microfinance institution established followed by Yayasan Usaha Maju (YUM) and The Economic Fund for National Entrepreneurs Group (TEKUN) in Malaysia. These three microfinance institutions are subsidized by the government. However, the effectiveness of the microfinance system implemented in Malaysia is not well wide publicized. This research measures the factor influence the needs of microfinance system by assessing the impacts of microcredit loans on the lower income earner. In addition, this study focuses on the psychology factors that influence the needs of Microfinancing among lower income earner in Malaysia. There are several factors that determine the factor influence the needs of Microfinance such as Income Capacity, Education and Health, Granting of Microcredit and Margin of Financing. The study will use a quantitative method approach. The primary data collection will be through survey questionnaire and secondary sources such as journal and internet.