Microfinance and Poverty: Mahathir's Failed Project in Malaysia

Dr. Mahathir, Father of Modern Malaysia, is a juggernaut in the modern history of Malaysia of which economic progress has been considered a showcase of socioeconomic development and the ability to increasingly bring about equitable distribution of income to its citizens, in an environment of high growth and general price stability, can only be matched by few countries. During the global recession of 1981-82, Dr. Mahathir assumed his leadership in the government. He managed to create an entrepreneurial revolution especially enhancing small business by providing easy microcredit in order to eradicate hardcore rural- urban poverty in Malaysia. Amanah Ikhtiar Malaysia (AIM) is that sort of institution which was welcomed by Dr. Mahathir's government in 1987 as a full-fledged microfinance institution. This organization is the oldest replications in Asia with some Islamic adjustments of the Grameen Bank model that was initiated in 1983 by Nobel winner Dr. Yunus. However, the present study pregnant with empirical evidence suggests that poverty alleviation in Malaysia is not the outcome of microfinance scheme but of some other strategies articulated by far-sighted statesman Dr. Mahathir.