Microcredit for rural poverty alleviation and social well‐being: A study of Sabah, Malaysia

Abstract

Microcredit is an influential intervention used to alleviate poverty and improve social well‐being in rural communities in Sabah, Malaysia. This study examined the effects of a microcredit scheme, Amanah Ikhtiar Malaysia ( AIM ), on the well‐being of these communities. Using a survey method, a pre‐tested interview schedule was administered to 277 AIM recipients in Sabah, Malaysia. Social well‐being was examined based on the three indicators of Midgley's social development approach: the management of problems, the fulfillment of basic needs, and social opportunities provided. AIM microcredit schemes were successful in improving the well‐being of AIM recipients, although the recipients faced a number of problems, including unemployment, lack of education, and access to public services and healthcare facilities. The findings of this study represent a useful guideline to the AIM authority, development practitioners, policymakers, and governmental organization and non‐governmental organization workers.