Application of Microfinance in Selected Islamic Banks in Malaysia : Challenges and Prospects

Omar Kachkar; Djafri Fares; Kamaruzaman bin Noordin

doi:10.5742/MEJB.2015.92767

Article Details

Application of Microfinance in Selected Islamic Banks in Malaysia : Challenges and Prospects

Authors:

Omar Kachkar | Djafri Fares | Kamaruzaman bin Noordin

Publisher:

medi+WORLD International

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Middle East Journal of Business 2016 Vol.11 Issue 2, pp.12-18

Document Type:

Article

Publication Date:

4/2016

Document Language:

English

Document ID (Org No.):

82770

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2015.92767

Descriptors:

Keywords:

Abstract:

 This paper aims to investigate the issues and challenges faced by Islamic banks in implementing Microfinance (MF) in selected Islamic banks in Malaysia. An empirical study is endeavoured consisting of semi structured interviews with senior managers and officers from four Islamic banks in order to address the main research questions.Out of the four selected Islamic Banks, only two are currently providing MF. The MF programs in these two banks are mostly restricted to pensioners, army wives, registered companies and companies operating for a minimum of two to three years. The main challenges facing Islamic Banks when dealing with MF can be highlighted in the following points: the default risk, the lack of funds and the unwillingness of shareholders to take MF risk, the high operating cost, the complexity of MF processing, and regulatory restrictions. Other hindrances include the lack of well trained staff capable of efficiently managing MF. This research concludes with a call for Islamic Banks to seriously participate in economic and social development through greater involvement in MF.

Article Details

Application of Microfinance in Selected Islamic Banks in Malaysia : Challenges and Prospects

Authors:

Omar Kachkar | Djafri Fares | Kamaruzaman bin Noordin

Publisher:

medi+WORLD International

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Middle East Journal of Business 2016 Vol.11 Issue 2, pp.12-18

Document Type:

Article

Publication Date:

4/2016

Document Language:

English

Document ID (Org No.):

82770

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2015.92767

Descriptors:

FINANCING

FINANCIAL AID

CAPITAL

ISLAMIC BANKS

MALAYSIA

Islamic Microfinance

Islamic Banks

Microfinance

Malaysia

Issues

Article Details

Authors: Omar Kachkar | Djafri Fares | Kamaruzaman bin Noordin

Publisher: medi+WORLD International

Main Topics: Islam, Bábism & Bahá"í Faith

Journal: Middle East Journal of Business 2016 Vol.11 Issue 2, pp.12-18

Document Type: Article

Publication Date: 4/2016

Document Language: English

Document ID (Org No.): 82770

Frequency: Quarterly

eISSN: 18348769

pISSN: 18348777

DOI: 10.5742/MEJB.2015.92767

Descriptors:

Issues

Authors:

Omar Kachkar | Djafri Fares | Kamaruzaman bin Noordin

Publisher:

medi+WORLD International

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

Middle East Journal of Business 2016 Vol.11 Issue 2, pp.12-18

Document Type:

Article

Publication Date:

4/2016

Document Language:

English

Document ID (Org No.):

82770

Frequency:

Quarterly

eISSN:

18348769

pISSN:

18348777

DOI:

10.5742/MEJB.2015.92767