Proceedings of the Australian Academy of Business and Social Sciences Conference 2014 (in partnership with The Journal of Developing Areas)


ACCOUNTABILITY OF MICROFINANCE INSTITUTIONS: A PROPOSED SOCIAL COLLATERAL MODEL

Amrizah Kamaluddin, Nabawiyah Abdul Hadi, Rashidah Abdul Rahman & Mohamed Azam Mohamed Adil

 


Abstract

This study presents the development process of a social collateral model for Islamic microfinance institutions. Specifically, this study proposes the relevant constructs which formed the social collateral model for Malaysian Microfinance Institutions (MMFI). Using qualitative approach, three forum groups were formed and the participants were interviewed to determine their views and opinions on the relevant constructs to be included in the model. Based on the three forum groups consisting of 14 participants, this study demonstrates that the social collateral model should consist of five constructs being social capital, group pressure, entrepreneur skill, religiosity and culture. The social collateral model developed in this study provides a more consistent measurement of social collateral and subsequently assists in improving the performance of MMFI in term of collection procedures.