Conceptual Framework: The Role of Microfinance on the Wellbeing of Poor People Cases Studies from Malaysia and Yemen

Abstract

The role of microfinance institutions in poverty reduction and wellbeing improvement has attracted the policymakers’ attention in the developing countries across the globe as well as Malaysia and Yemen. The underlying logic is that by providing microfinance services, poor will be able to participate in the economic market through forming their small businesses. Consequently, they will be able to generate income and improve their households, self esteem and efficacy. Despite the popularity and apparent success of microfinance, there is no clear evidence that asserts the positive impact of microfinance scheme. Therefore, the aim of this research is to propose a conceptual framework in the role of Malaysian and Yemeni microfinance on the poor’ wellbeing. Microfinance servers refer to financial, nonfinancial and social services while the clients’ wellbeing refers to the clients’ household, micro and small enterprises performance and empowerment. The mixed method is employed to carry out the objective of this research. The cross-sectional survey with the randomized control trait is used for collecting the quantitative data while the regression logistic with chi-squire are used to analysis. In contrast, the semi interview is conducted to collect and analysis qualitative data. The three microfinance institutions of Amanah Ikhtir Malaysia, Yayasan Usaha Maju and Economic Fund for National Entrepreneurs represented Malaysian microfinance while the Al-Amel Bank represented Yemeni microfinance.