Australian Journal of Basic and Applied Sciences, Vol. 5, No. 9, 09.2011, p. 610-619

 

 FINANCIAL SUSTAINABILITY & OUTREACHED OF MFIS   A COMPARATIVE STUDY OF AIM IN MALAYSIA AND RDS OF ISLAMI BANK BANGLADESH

 

Abul Bashar Bhuiyan ; Chamhuri Siwar ; Abdul Ghafar Ismail  and  Basri Talib

Abstract  

Microcredit has become a proven tool in against of poverty both in developed and developing economies. It has launched a challenge to the formal financial system with the hope of possibility of development to the poor group, who are a large part of the world's population. This study has an aimed for analyzing comparative of the performance of Rural Development Schemes (RDS), the largest Islamic MFI in Bangladesh and Amanah Ikhtiar Malaysia prime MFIs in Malaysia in terms of institutional characteristics, financing structure, outreached indicators, overall financial performance (sustainability), expenses, efficiency and productivity. The data have been analyzed by using financial ratio analysis on the above selected indicators to compare the performances between both of MFIs. The comparative findings show mixed output between AIM and RDS performances. The AIM performance was quite remarkable in terms of operational self-sufficiency, earning revenue's and financial expenses but very low performance was recorded as well as institutional characteristics outreached to the poor and Efficiency especially on operating expenses in compare with RDS. Overall, the study recommended that AIM may adopt Islamic mode of microfinance as like as RDS, because of Islamic Microfinance is more about dealing with poor people more closely mitigating their socio-economic needs in a spiritual way.