Amanah Ikhtiar Malaysia :
The Oldest GB Replication

Malaysia, a high middle income country, has experienced one of the fastest economic growth rates in Asia. GDP growth rate increased from 5.8% in 1999, to 8.5% in 2000. But Malaysia is not exempt from the poverty problem. In 1997, 10.9% of households in rural areas were poor and 56,000 households were under the poverty line. Although, the poverty rate has decreased over the years, the percentage of people in poverty increased recently as a result of the world economic slowdown and declining commodity prices. AIM, which began replicating Grameen in 1986, plays an important role in reducing poverty in Malaysia today. It is also one of the largest GB replications until now.

AIM was established in September 1987 as an NGO, registered under Trustee Act 1965, as a private trust. Trusted and recognized by the Malaysian government, it aims directly to eradicate poverty in the rural areas of peninsular Malaysia.



AIM has gradually become a national programme for poverty alleviation and until December 2000 had 60 branches, with 66,130 clients. It currently employee 820 staff. A new training and research facility called CMCTRD has been operating since 1998. An entrepreneurship development unit has also been functioning from 1996. Total loan disbursement until now amounts to 5.5 million Malaysian Ringgit. Four types of loan products have been developed. These are :

SPI 1 for loans up to M$ 1,000 - 4,900
SPI 2 for loans up to M$ 5,000 - 9,900
SPI 3 for loans up to M$ 10,000
SPI 4 for loans up to M$ 20,000

In addition AIM has introduced a number of savings & insurance schemes.

Saving Schemes Compulsory Saving
Group Fund Tax
Insurance Schemes Loan Takaful
Family Takaful

AIM has received government support from the very beginning. It has received financing from the following sources:

Government of Malaysia
Islamic Economic Development Foundation (YPEIM)
Credit Guarantee Corporation (CGC)
Financial institutions
State government
Other organizations

Financial Sustainability

Since 1997, AIM has managed its operations with own income generated from its financial service. Its income that year, was M$ 15.5 million and the operational expenditures were M$ 11.9 million. The surplus was M$ 3.6 million. In 1998, AIM carried over a surplus of M$ 25.6 million to the next year with an income of M$ 39.9 million and an operational expenditure of M$14.2 million. In 1999, income was M$ 28.9 million and the operational expenditure was M$ 16.3 million, leaving a surplus of M$ 12.5 million.



Average drop-out rate - 6% per year
Coverage area - geography is a factor in certain areas specially in Sabah and Sarawak, which are sparsely populated
Impact of global and national economic factors such as fluctuation of rubber and oil palm prices
To maintain operational cost and ensure sustainability - interest rate has to be increased and there is a need for a good investment environment


Future Plan

2005 target: 160,000 members
70 branches
Loan amount to be disbursed: RM 800 million
Extend urban poverty coverage to include single mothers
Client demand product base
Create new entrepreneurs among poor people - a new Entrepreneur Loan Scheme will be launched
Maintain financial sustainability
Involved in short and long term investment - i.e. bond and property investment

By Haji Mukhtar Ramli, Managing Director, AIM

 Editor : Muhammad Yunus
Executive Editor : Khalid Shams 
Editorial Advisory Board: Argentina : Pablo Broder, Buenos Aires     Australia : Shan Ali, Sydney     Chile : Benardo Javalquinto, Santiago     Colombia : Mauricio Fernandez, Bogota     France : Maria Nowak, Paris     Germany : Nancy Wimmer, Munich     Malaysia : David S. Gibbons, Kuala Lumpur     Philippines : Dr. Cecilia D. Del Castillo, Bacolod City     USA : Alexander Counts, Washington DC
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