I remember attending the launching of Amanah Ikhtiar Malaysia (AIM) in September 1987, as a reporter. It was a concerted effort by Universiti Sains Malaysia (USM), Yayasan Pembangunan Ekonomi Islam Malaysia (YaPEIM), the Selangor State Government and Asia-Pacific Center for Development.
It's main objective is to provide micro loans to the poor to generate income from any economic activity.
Modeled after a Bangladeshi's millionaire Mohd Yunus method of helping the poor and destitute in his country, we embarked on similar module, turning it into one of the many 'noble' ways of alleviating poverty.
(At the time of its launch, there were already words that Mohd Yunus resorted to 'ah long' ways of retrieving the small loans on time, thus making the poor becoming more poorer).
Yes, about 99 per cent (here) of those who took AIM loan pay their dues on time. Why? If you fail to pay your weekly installment, their agents will come harassing you at home. Worse still, they will sue you after a certain duration, thus blacklisting you for just a few thousand ringgit you faulted.
I have seen some friends involved in the scheme failed to uplift their standard of living but keep busy finding money to pay the macro loan. They took RM3,000 (upon approval, the amount given was less than that) and are made to pay a weekly installment of RM150 for 30 months.
By simple math, they have to pay RM4,500 for the RM3,000 loan, an extra RM1,500 or 50 per cent of the principle amount taken!
You must keep on paying until AIM gets that RM1,500 profit from the RM3,000 loan. And you are also made to attend an every Tuesday briefing for one to two hours at the AIM office. This is compulsory, failing which will subject you to some 'actions'.
Yes, it's quite easy to apply for the loan. No guarantor, no pay slip and no nothing. Just proof that you are into any kind of small business, for instance producing 'kerepek pisang' at home, and you will get that 'lessened RM3,000 loan'.
So, how much can you earn from a small 'kerepek pisang' home-business? Maybe between RM100-RM200 per week. You don't have the right machinery and equipment to produce it in a larger scale. What machine or equipment can you buy with that RM3,000?
In the end, your small business is just to furnish the weekly installment to AIM, leaving you with nothing. If you employ one or two assistants, you won't be able to pay their daily wage but if you do, you may end up closing your small family business, which gets more difficult to sustain. You will start having sleepless night, and eventually you get more poorer than before.
I think the government has to review the whole procedures. I don't know about Tekun scheme but I heard it also gives a lot of problems to recipients. There must be other approach in dealing with such schemes.
Eradicating poverty is the thrust of the New Economic Policy and the Economic Transformation Program. However, if we make more people become poorer, something is amiss there.
If programs like AIM and Tekun are introduced to manipulate and exploit the poor, we better reconsider its mechanisms before issues like this explode in our face. We have lost a few States in the previous election...