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Modeling the demand for Islamic microfinance services: an application of PLS-SEM approach

Mohd Thas Thaker, Mohamed Asmy and Kassim, Salina and Amin, Md Fouad and Che Mohd Salleh, Marhanum and Othman, Nadhrah and Kassim, Siti Nadhirah (2022) Modeling the demand for Islamic microfinance services: an application of PLS-SEM approach. International Journal of Islamic Economics and Finance (IJIEF), 5 (1). pp. 89-106. ISSN 2622-3562 E-ISSN 2622-4372

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The access to capital is very crucial for ensuring the financial sustainability of microfinance clients. It is also equally important to determine the demand for microfinance services among the clients. This study aims to identify the factors affecting the demand for Islamic microfinance (IsMF) services among the women microentrepreneurs in Malaysia. This study has collected a total of 250 samples from the field survey on women micro-entrepreneurs who are also the clients of Amanah Ikhtiar Malaysia (AIM). In addition, Partial Least Squares (PLS) method used to identify the potential factors (4As) i.e., affordability, accessibility, adequacy and awareness affecting the demand for IsMF. The results show that only “accessibility” has significant and positive relation with the demand for IsMF. Besides, the measurements items of accessibility such as distance of IsMF institution, collateral requirement, guarantor requirement, application procedure and process, repayment method, service efficiency, advise and consultation, and number of IsMF centers are the key factors affecting the demand for IsMF services in Malaysia. This paper provides some insights for the policy makers of Islamic microfinance and recommends that IsMF providers should take accessibility factor into greater consideration for the economic upliftment of women in microenterprises in Malaysia.

Item Type: Article (Journal)
Uncontrolled Keywords: Islamic microfinance; Women; Amanah Ikthiar Malaysia; 4As
Subjects: BPH Islamic Economics
H Social Sciences > H Social Sciences (General)
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr Mohamed Asmy Bin Mohd Thas Thaker
Date Deposited: 21 Feb 2022 15:03
Last Modified: 21 Feb 2022 15:03
URI: http://irep.iium.edu.my/id/eprint/96859

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