Norhaziah Binti NawaiMohamed Sharif Bashir2024-05-282024-05-282009https://oarep.usim.edu.my/handle/123456789/468618-19 August 2006, Malang – East Java The 8th IRSA International ConferenceThis paper is to analyze the role of Amanah Iktiar Malaysia (AIM), the largest Malaysian microcredit program, in eradication poverty. This paper is a contribution to the ongoing debate on the effectiveness of poverty eradication programs and their impact on the poor. This paper analyzes the role played by AIM in poverty eradication and evaluates the AIM micro credit programs in selected rural areas in Malaysia. Empirical investigation has been based on survey question covered selected rural areas in Malaysia. The effectiveness of AIM program’s performance is influenced largely by three main groups of factors namely are outreach, financial sustainability and the impact on the client. The paper tries to see whether AIM small loans on reasonable terms provided to poor households for financing additional income-generating activities could be an effective way of reducing extreme rural poverty. Moreover, by providing working capital to small sized project households how much that credit could bring about a significant increase in project size and hence absorbing surplus labor in small projects leading to the increase in household income and consequently reducing extreme rural poverty. The study provides strong evidence that microfinance is indeed an effective tool for poverty eradication. The study will highlight a number of policy implications to improve the overall AIM performance.en-USmicrocredit program, poverty eradication, microfinance effectivenessArticle