Microfinance Final Report in Kedah

Poverty is about not having enough none to meet basic needs including food, clothing and shelter. However, poverty is more, much more than Just not having enough money. The World Bank Organization describes poverty in this way: “Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a Job, is fear for the future, living one day at a time. Poverty has many faces, changing from place to place and across time, and has been described in many ways.

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Most often, poverty is a situation people want to escape. So poverty is a call to action for the poor and the wealthy alike a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice In what happens in their communities. ” Despite the definitions, one thing Is certain; poverty Is a complex societal issue. No matter how poverty is defined, it can be agreed that it Is an Issue that requires everyone’s attention.

It Is Important that all members of our society work together to provide the opportunities for all our members to reach their full potential. It helps all of us to help one another. B. What Is Islamic micromanage? Islamic, more correctly termed ‘Share-compliant’, micromanage Is the provision of financial services for low-income populations In which the services provided conform to Islamic financing principles. In many respects, Islamic finance Is simply ethical finance. Islam sets out some broad principles that govern commercial transactions In general and the provision of finance In particular.

One of the most Important financing principles is that money is not an earning asset in and of itself. This means that interest is prohibited under Islamic law. Many Muslims therefore refrain from using interest based micromanage services for fear of breaching their religious beliefs. Islamic micromanage programmer cannot therefore imitate conventional interest. However, this does not mean that capital is free of charge, that it should be made available without any cost, or that there should be no return on the funds provided.

Rather, a return on capital is allowed, provided that the capital participates in the productive process and is exposed to business risk. Islamic micromanage providers have developed a number of financing mechanisms that can be utilized according to the nature of the commodity or business and the period for which financing is sought. These are generally known by their Arabic names as below: Maharajah is the most popular and widely used Islamic financing instrument.

This involves the resale of a commodity after the lender adds a specific profit margin (often referred to as the ‘mark-up’), which is paid by the borrower who agrees to buy that commodity Muhammad, a second type of contract, two parties are involved – the financier, who provides all the money, and the entrepreneur who uses his or her skill to invest the money in an attractive business venture. The profit from the Muhammad contract is shared by the financier and the entrepreneur according to a pre-determined ratio. Importantly, profit-sharing rates are a percentage of the profit and not a lump sum payment.

In the case off loss, providing it was incurred in the normal process of business and not due to neglect or misconduct by the entrepreneur, the financier loses all his or her money, while the entrepreneur merely loses his or her time and effort. Sarah is similar to leasing. Under this arrangement, an entrepreneur short of funds approaches a financier to fund the purchase of a productive asset. The financier may buy the productive asset and rent it out to the entrepreneur. The financier retains ownership of the asset and is responsible for its maintenance. . Sustainable Livelihood Opportunity The Sustainable Livelihoods approach is a holistic and flexible framework for understanding, measuring, and analyzing poverty and poverty alleviation. Unlike many traditional models which measure poverty by a single factor like low income, a Sustainable Livelihoods approach takes into account a variety of economic, social, political, and ecological factors that impact a person’s ability to sustain a livelihood. The Sustainable Livelihoods approach puts poor people themselves at the center of any analysis.

It takes into account the complexities of poverty: what level of skills or knowledge an individual has, whether or not they have access to education, sources of credit, networks of social support, and how vulnerable they are to economic stress like natural disasters or fluctuations in food prices. Using a Sustainable Livelihoods approach involves recognizing not Just what assets a poor person lacks- financial, human, social, physical, and natural assets-but also what assets they do eave, and builds interventions based on both their capacities and needs.

The Sustainable Livelihoods approach (SAL) has seven guiding principles: * People- centered: SAL starts by looking at a person’s livelihood assets, how they change over time, and the specific vulnerabilities they face. * Holistic: SAL understands that people adopt many strategies to secure their livelihoods and draw on a range of “assets” to do so. These are influenced by an array of external factors, including government policies and institutions, the private sector, and local organizations. * Dynamic: SAL seeks to understand the dynamic nature of livelihoods and what influences them. Build on strengths: SAL builds on people’s perceived strengths micro-macro links: SAL looks at the influence of policies and institutions on livelihood options and highlights the need for policies to be informed by insights from the local level and by the priorities of the poor. * Encourage partnerships: SAL counts on partnerships drawing on both the public and private sectors. * Aim for sustainability: Sustainability is important if poverty reduction is to be lasting. A. Poverty in Malaysia .

Overview of poverty in Malaysia Over 30 years ago, after taking independent from British, Malaysia was a country with a high poor rate. After so many acts from government such as New Economic Policy, the poor rate is decreased time to time. In 2002, it was 5. 1 percent down from 7. 5 percent in 1999, and until 2012 is 2. 8 percent. To define poverty, Malaysia government has released the poverty line, which is around ARM 1000 from several years, it base on the minimum wage. For instance, the minimum wage in 2012 is ARMOR in Malaysia’s peninsula and ARMOR in Saba and Karakas area.

Even though there are some argument about the poverty line, but generally it is seems to be acceptable. The poverty in Malaysia might be divided by two groups, which are rural poverty or urban poverty. The urban poverty mostly is confined to the non-Malay citizens. The migration to the urban area of Malaysian villagers also is a reason to increase the number of urban poverty. According to goal of getting no poverty in 201 5, Malaysia government is trying to do so many things to make that goal become true, the most important of them is 10th Malaysia Plan (10th PM).

According to rent Prime Minister Ninja “The Tenth Malaysia Plan houses the aspirations of both the Government Transformation Programmer and the New Economic Model, premised on high income, inclusiveness and sustainability. It charts the development of the nation for the next five years, anchored on delivering the desired outcomes for all Malaysian. The Tenth Plan sets the stage for a major structural transformation that a high-income economy requires. The Plan contains new policy directions, strategies and programmer that enable the country to emerge as a high income nation. ” b.

Poverty in Asked Table 1: Data 2: Data 3: Data of Camping Piping 3 C. Lilacs Micromanage I would like to explain this part with my own knowledge Shari is one of the parts of Islam, it includes EBITDA (Man to Allah workshop) and Mulatto(Man to Man activities). Therefore, in Mulatto, there are activities such as political, social and economic as well. As we known to fulfill a financial need, there are only two way, whether from own capital or other capital or both. This is where equity financing and debt financing rise up and the question why Islamic finance also has been raised up as well.

As Muslim, we know that those who are promoting Hiram, heir souls will be bounded in Hell and in the Day of Judgment we will be asked about the ways of our income and how we spent it. It is the fear of all the Muslim that their income or how they spend the money would be illegal/ or cursed. Hence, the missions of Islamic micromanage are purifying Muslim income and help Muslim to stay away from Rib as well. Rib in Quart( context 2:278) has mentioned about the punishment of those who are committed as below: 1 . Killed 2. Crucified 3. Hands and feet on alternative sides cutoff. 4. Ill be expelled of the land Such will be their degradation in the world, and In hereafter, there will be an terrible down. Also our Prophet (SAW) has cursed the receiver and the payer of interest, the one who records it and the one who witnesses to the transaction and said “they all are alike (in guilt)” Birr Bin Abdullah). Economic activities take an important role in our life and society, but it is also easy to commit a guilt. According to some of what Muslim must fear and afraid in their economic activities are why we should have Islamic Micromanage. So, what is Islamic Micromanage? . To provide the services under the range of Shari. Shari compliant MFC, to enable Muslims to do their transaction in a Hall way. B. Economic empowerment c. Sources of fund collection of MIFF: Katz: the third pillar of Islam Sudden: is a kind of charity, but not obligation Was : trust Muskrat: it means sharing (in Arabia word meaning is partner). Two persons or more agree to contribute funds for conducting some hall business in which all partners share the profit and the loss to a specific ratio. The share could be in cash or in form of commodities.

All the partners have the same right is the business but when one decide to become a no-working partner, his share ratio will be deducted. none to invest in a commercial enterprise of a person called Midrib (Working partner). All the terms and conditions of Maturated are mostly the same to Muskrat. The others Islamic Micromanage contracts are Karri, Maharajah, Sarah, Salaam and Assistant. B. Tracking Tracking on Yardarm Ye Thin Kayak @ Small 1 . Background Small is a Manner, he is 21 years old and now studying at AIL], his course is Computer Science.

His hometown is Yang, he comes from a family which has 4 members, his mom’s name is Radioing and his father’s name is Abraham. Auntie Radioing and Uncle Abraham both are working on their own business, which is a food rout. Their business is not smooth at all the times, sometimes it is good, but sometimes guests are Just few. It is the only source of his family’s income and it depends a lot on the costumers. Through times, a lot of restaurants and big food stores have been built up and Camel’s family has to try harder to sustain their life. Their properties are Just a small old house, a motorbike and a food store.

Normally, his parents could earn around ROOM per month, sometimes it may be less, and those amount of income is using for the whole 4 members family so it is funny when I ask him whether his family have saving money or not. It also is a very hard work for his parents to support their children to study until now. Small is the first born, so after him is his sister, Anus HTH Yea (@ Fatima). Fatima now is 16 years old and she’s studying in high school. According to Small, his younger sister is a very good girl when she studies hard and she also tries to work hard to help family.

After school, she come back home and work as a waiter in the food court until pm then she takes one hour for self-study. About Small himself, as a family’s member he also has to help his parents in their business. When he was in Manner, he started a day t Sam to help his father in bringing back home the ingredients from the early morning market. He explained to me that his family has to wake up early to go to market because they want to buy the best ingredients and only in early morning market, those ingredients are cheaper than normal so they can save more money.

Then he came back home at 6. Mama and prepared to go to school. As a bright student, he get scholarship from his high school so his parents don’t need to pay much for his study, except stationeries and uniforms only. After a day from school, he went back and worked for his parents as his sister does. His role is optional, sometimes he was a dish-washer, but some other times he is a counter as well. Small told me that his family has a lot of relatives among Manner, and some are living in Malaysia also, but they are underprivileged as well so they cannot give any help to his family.