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The impact of microloans in vulnerable remote areas: evidence from Malaysia

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  • Sow H. Chan
  • Mazanah Abdul Ghani

Abstract

Microfinance is not a panacea, and the extent to which the very poor are being served remains unclear. This study examines whether microfinance programmes reach the intended target in vulnerable remote villages, and whether the borrowers improve their lives through microfinance. Seventy-two borrowers from three villages were studied. Remote villagers living below the poverty line were reached. Ninety-three per cent of the borrowers observed an increase in income, assets and spending on family members. Improvement on non-income aspects was also reported. The findings suggest that small loans can encourage the development of (1) rural enterprise, (2) skills and confidence in rural women and (3) social standing of rural women. The study concludes that microfinance is an empowering tool in vulnerable remote areas.

Suggested Citation

  • Sow H. Chan & Mazanah Abdul Ghani, 2011. "The impact of microloans in vulnerable remote areas: evidence from Malaysia," Asia Pacific Business Review, Taylor & Francis Journals, vol. 17(1), pages 45-66, January.
    • Handle: RePEc:taf:apbizr:v:17:y:2011:i:1:p:45-66
    DOI: 10.1080/13602380903495621
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    References listed on IDEAS

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    1. Judy L. Baker, 2000. "Evaluating the Impact of Development Projects on Poverty : A Handbook for Practitioners," World Bank Publications - Books, The World Bank Group, number 13949.
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    1. Wan Nurulasiah binti Wan Mustapa & Abdullah Al Mamun & Mohamed Dahlan Ibrahim, 2018. "Development Initiatives, Micro-Enterprise Performance and Sustainability," IJFS, MDPI, vol. 6(3), pages 1-15, August.
    2. Maxime LEBOVICS & Niels HERMES & Marek HUDON, 2016. "Are Financial And Social Efficiency Mutually Exclusive? A Case Study Of Vietnamese Microfinance Institutions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 87(1), pages 55-77, December.
    3. Abdullah Al Mamun & Mohd Asrul Hery Bin Ibrahim & Rajennd A/L Muniady & Mohammad Bin Ismail & Noorshella Binti Che Nawi & Noorul Azwin Binti Md Nasir, 2019. "Observations of Participation in Development Initiatives on Enterprise Income and Asset in Peninsular Malaysia," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 5(2), pages 198-213, July.

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