Investigating the Effect of the Utilization of Microcredit on Hardcore Poor Clients Household Income and Assets

The objective of this study is to examine how Amanah Ikhtiar Malaysia (AIM)'s clients have been using the microcredit received and the effect of microcredit utilization on household income and asset. To obtain the above mentioned objectives, this study employed a cross sectional stratified random sampling method. Based on the literature review, it was found that there is a lack of studies to find out how AIM's hardcore poor clients were utilizing the microcredit they received. In addition, there is a paucity of literature which examines the effect of usage of loan on household income and asset. Findings of this study show that a relatively high percentage of old respondents used credit in trading activities and they engaged in self-employed production, trade and service activities more than new clients. Average monthly household income and market value of total household assets were also found to be higher for the respondents who used credit in income generating activities. Therefore, this study proposes that AIM should focus on the usage of credit in income generating activities by its clients. It is also recommended that AIM should review and re-structure the existing policies to increase the employment rate and income generating opportunities of client's household members. This can be done by providing appropriate training, diversifying the loan program and offering loan for non-income generating activities