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Microfinance in Malaysia: time to rebuild
John D Conroy, 2002 (5 pages) AbstractAmanah Ikhtiar Malaysia (AIM) is the oldest and one of the largest Grameen Bank replications in Asia, as well as Malaysia's dominant MFI and a member of the BWTP Network. Following unfavourable publicity given to Grameen Bank itself in late 2001 in the Wall Street Journal, AIM's current problems are not good news for the many supporters of the Grameen model. In December 2001, following a central bank audit, senior AIM staff were suspended and a government line of credit for onlending was frozen. AIM's management information system is reported as having broken down, and while arrears were said to be at 10 per cent of portfolio at end-2001, informed observers believe that PAR may prove to be double this. However, AIM has a cadre of very experienced operations staff who have the capacity to solve problems in the field. It is reported that these staff see a politically neutral and expert board as essential to the task of solving AIM's repayment problems. It remains to be seen whether the recent management shakeout will be succeeded by a period of stabilisation and recovery. AIM's Board is reported as negotiating the return of experienced senior staff and management. BWTP hopes AIM can succeed in bringing its loan book under control and re-establishing its original mission of serving the poor in Malaysia. The following short paper analysing AIM'S vicissitudes is drawn from a paper by John Conroy, 'Challenges of Microfinancing in Southeast Asia', which will appear in 2002 in a collection titled Financing Sustained Economic Development in Southeast Asia, to be published by The Institute of Southeast Asian Studies in Singapore. The book may be ordered from the Institute at www.iseas.edu.sg Microfinance in Malaysia: time to rebuild
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