Empowering the Socio Economy of Low Income Households is the Responsibility of AIM Workforce Seminar on Islamic Microfinance for Poverty Alleviation in OIC Member Countries EMPOWERING THE SOCIO ECONOMY OF SAHABAT AIM IN MALAYSIA THROUGH ISLAMIC SOCIAL FINANCE Dr Zubir bin Harun Executive Chairman AIM

Narrated by Abu Hurairah, “The Messenger of Allah SAW said: Whosoever removes a worldly grief from a believer, Allah will remove from him one of the griefs of the Day of Judgment Hadith Riwayat Muslim

Established since 1987 Malaysia’s first NGO Microfinance Institution Malaysia’s largest Microfinance Institution with lowest NPL rate (1.3%) Awarded ‘Best Islamic Microfinance Institution’ by Global Islamic Financial Awards (GIFA) for three consecutive years Best Islamic Finance Case (2015) Best Islamic Microfinance Institution (2015)

Full fledge for accreditation and Syariah compliance in the organization Develop programs for zakat and wakaf – focus Sahabat transformation Engagement with Islamic Institution and corporates companies in Malaysia Recognition and Award from International Agencies / Organizations Champion in Islamic Microfinance Institution in Malaysia, Leader in Islamic Microfinance Model internationally. AIM

Target Groups Low Income Poor Hard core Poor Earning Below USD 722 / Month (RM 3080 / Month) Earning Below USD 170 / Month (RM 733 / Month) Earning Below USD 106 / Month (RM 457 / Month)

MODEL OF AIM IN ALLEVIATE POVERTY AMONG SAHABAT AIM Transform the poor from Bottom- 40% to Middle Income Accelerate income improvement from RM1500 to more than RM4000 per household /month Increase integration from AIM’s ecosystem Enable continuous loan and productivity

Performance RM 14 billion RM 2.4 billion 370,000 Repayment Rate98.7 % Average Loan Size (RM)6,486 Portfolio At Risk1.3% Financial Self-Sufficiency5 cent

1. AIM AS AGENT OF COLLECTION Appointed by 6 states in Malaysia as zakat collector – Selangor since December 2012 Appointed by 6 states in Malaysia as zakat collector – Selangor since December 2012 – 2015 : Kedah and Pulau Pinang, – 2015 : Kedah and Pulau Pinang, – 2016: Negeri Sembilan, Pahang and Perak. – 2016: Negeri Sembilan, Pahang and Perak.

Collection of zakat in AIM as follow: Collection of zakat in AIM as follow: Awarded by Lembaga Zakat Selangor (LZS) twice; Awarded by Lembaga Zakat Selangor (LZS) twice; a. The Best Agent in Selangor, in 2013 b. The Best Agent – Private Sector in Selangor, in 2014

2. Zakat Collection Program For Sahabat: “Program Usahawan Berzakat” “Program Usahawan Berzakat” Collaborate with 6 State Islamic Council – appoint as Agent for Zakat Collector among Sahabat AIM Program Zakat Payment for Sahabat, collection period once a year Start : 2015, Pilot in Kedah Total Payers 2015 : 600 payers, RM12,000

3. Corporate Zakat / Agent Distribution Zakat Distribution Corporate Organization Distribute Zakat Corporate on behalf of the corporate to the poor Zakat Institution Distribute Zakat by the agent at 1/8 of total collection of zakat

Selangor Wakaf Corporation Selangor- Ikhtiar Wakaf Fund Strategic Partner IDB Group WAKAFDEVELOPMENT

GENERAL CONCEPT OF ASSET DEVELOPMENT POOR MICROENTERPRENEURS NEW GENERATION – CHILDREN OF THE POOR MICRO- ENTERPRENEURS CLIENTS WAKAF FUND ASSET DEVELOPMENT WAKAF INDUSTRIAL PARK WAKAF BUSINESS PARK CREATIVE BUSINESS INCUBATOR MUSLIM COMMUNITY 14

Poor Microenterpreneur Development Programs WAKAF FUND Wakaf Industrial Park Wakaf Business Park Creative Business Incubator Office Lot2 units (24’ x 62’; with 2,976 square feet for each) Baazar Lot4 units (24’ x 62’; with 888 square feet for each)

The purpose of Infaq fund in AIM is to reduce the financial burdens of members during difficulties.

The fund was distribute to four main categories as follow: CSR - Community Wellbeing & WelfareHealth Impact of Natural Disaster AIM contribute 2.5% yearly to Infaq Fund AS OF 2015, OUR TOTAL INFAQ DISTRIBUTION IS RM 325,000. HIGHEST GOES TO IMPACT OF NATURAL DISASTER – 77% FROM TOTAL DISTRIBUTION 17

Menara Amanah Ikhtiar, No.3, Jalan Cempaka SD12/1A, Bandar Sri Damansara PJU9, Kuala Lumpur Malaysia www. aim.gov.my THANK YOU

INCOME SCALEPERCENTAGE RMUSD% < 4,000 < % 4, , , % 6, ,9991,488-1, % 8,000-9,9991, , % 10, ,0002, , % >15, 000> 3, % TOTAL1 MYR = USD100.0%

INCOME SCALE NUMBER OF SAHABAT PERCENTAGE RMUSDPEOPLE % < 4,000< , % 4,000 – 4, ,24031, % 5,000 – 5,9991, ,48827,8809.4% 6,000 – 6,9991, ,73617,6356.0% 7,000 – 7,9991, ,98410,7313.6% 8,000 – 8,9991, ,2321,5230.5% 9,000 – 9,9992, ,4804,5861.6% 10,000 – 12,0002, ,9765,8622.0% 12,001 – 15,0002, ,7202,7740.9% >15, 000> 3,7202,0050.7% TOTAL1 MYR = USD295, %

corrective measures of poverty eradication Jika perlu sahaja Based on Maqasid Syariah, five basic human requirements of life are i)Religion ii)physical self iii)knowledge iv) dignity, v) wealth. a. Social problems refer to impact of poverty felt by whole society, or ummah – such as unemployment –. b. Ideological problems refer to impact of poverty of single Muslim toward his or her obligation to Allah and ummah, and may lead to kufur. 24