W Muhammad Zainuddin B Wan AbdullahWan Nur Rahini Aznie Bt ZainudinSarina Binti IsmailHafiz Muhammad Zia-ul-haq2024-05-282024-05-2820222023-2-41743-760110.18280/ijsdp.170634https://www.iieta.org/journals/ijsdp/paper/10.18280/ijsdp.170634https://oarep.usim.edu.my/handle/123456789/7540Volume: 17 No: 6 (page: 1983-1996)This research examines the influence of microfinance services on the socioeconomic performance of Malaysian B40 households, which are considered vulnerable communities in Malaysia. Mainly, it explores the mediating role of entrepreneurial competencies and financial management practices in the relationship of microfinance services with households’ economic well-being, entrepreneurial success, and social wellbeing. Likewise, this research also examines the moderating role of microfinance institutions’ service efficiency in the success of microfinance services to improve households’ socioeconomic outcomes. The responses were collected from the participants of Amanah Ikhtiar Malaysia, the largest microfinance institution serving the low-income population of Malaysia. Employing the structural equation modelling approach, results show that microfinance financial services and non-financial services positively influence households’ socioeconomic performance through entrepreneurial competencies and financial management practices. On the other hand, microfinance financial services are also found to have significant direct influence on households’ socioeconomic performance. Further, results also indicate that microfinance institutions’ service efficiency positively moderates the influence of financial services to improve households’ socioeconomic performance. This is novel research that introduces human capital development as an underlying mechanism in the household economic portfolio model, suggesting that microfinance interventions develop human capabilities among their participants, which further assist them in the efficient management of financial and business affairs, thus, improving socioeconomic outcomes.en-USmicrofinance services, entrepreneurial competencies, financial management, socioeconomic performance, household economic portfolio modelArticle19831996176