Evaluating the effectiveness of a microcredit program in the elevation of borrowers’ quality of life in malaysia; [Ocena skuteczności programu mikrokredytów w zwiększaniu jakości życia pożyczkobiorców w malezji]

• Published in: Polish Journal of Management Studies
• Main Author: Zakaria M.; Manaf K.A.; Nafi M.N.A.; Hariani P.; Yusuf S.N.S.
• Format: Article
• Language: English
• Published: Czestochowa University of Technology 2020
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85099409854&doi=10.17512%2fpjms.2020.22.1.40&partnerID=40&md5=be01a666dac793e30be66e736727b00e

Microcredit program offers productive and social capitals to empower the poor in becoming successful entrepreneurs. This program is part of poverty eradication strategies adopted by many countries for moving the poor out from shackles of poverty and thus elevating their quality of life. Although the program has been established in Malaysia for more than three decades, poverty in the country persists. Triggered by the issues, the objective of the study is to investigate the impact of microcredit program on the elevation of borrowers’ quality of life. The microcredit is evaluated based on three dimensions namely loan size, loan tenure and training. Meanwhile, the quality of life is assessed in four improvements of life namely health, economy, family and household. Data were gathered from 386 borrowers of a Malaysian microcredit institution and analysed using Binomial Logit Model. Findings indicated that loan size, loan tenure and training had significant impacts on the elevation of borrowers’ quality of life. These discoveries provide useful insights to policy makers and microcredit providers in which increasing loan size, extending loan tenure and sufficient training would enhance the borrowers’ life. Additionally, educating borrowers with appropriate skill, knowledge and technology will prepare them to face challenges and uncertainties in the digital world. Hence, microcredit is an essential investment to expedite the aspiration of Malaysian government and sustainable development goals of the United Nation in ending hunger and poverty as well as elevating the quality of life of the poor. © 2020, Czestochowa University of Technology. All rights reserved.