Comparing the effect of Amanah Ikhtiar Malaysiaʹs (AIM) microcredit program on quality of life in urban and rural Malaysia

This study was undertaken to measure and compare the impact of Amanah Ikhtiar Malaysiaʹs (AIM) microcredit programs on low-income householdʹs quality of life between urban and rural Peninsular Malaysia. To achieve the aforementioned objective, this study employed a cross-sectional data analysis using stratified random sampling method to examine whether participation in AIMʹs microcredit programs improved the quality of life of low-income households. A quality of life index was developed using eleven selected indicators, namely, use of permanent housing materials for the walls, floors and roofs, environmentally safe cooking fuel, better access to public water supply and healthy sanitary facilities. Findings of this study revealed that with participation in AIMʹs microcredit programs, the quality of life index as measured by these indicators improved for urban households. In fact, the overall quality of life among AIM borrowers was found to improve after participation. The current level of quality of life of the low-income urban households also appeared to be better than that of poor rural borrowersʹ households. The results suggest that AIM should, therefore, focus on increasing the outreach by targeting ʹlow income clientsʹ in urban as well as rural Malaysia. Moreover, AIM also should review and re-organize their programs in order to come up with a dynamic and well-diversified microfinance program to fulfill all financial needs of urban clients.