Complete Guide to Amanah Ikhtiar Loan

The Amanah Ikhtiar Malaysia (AIM) loan is a micro-financing scheme specifically designed to assist low-income groups in Malaysia. This scheme provides opportunities for those who wish to start or expand small businesses, as well as helping to improve their standard of living. In this guide, we will discuss all the important aspects of the Amanah Ikhtiar loan, from eligibility requirements to the application and repayment processes.

Eligibility Criteria for the AIM Loan

Before applying for the Amanah Ikhtiar loan, it is important to understand the eligibility requirements and the evaluation process involved. Here are the detailed conditions that applicants must meet:

Financial and Income Requirements

One of the main requirements for applying for the AIM loan is that the applicant must fall under the bottom 40% income group (B40). For those wishing to apply for this loan, their household income must not exceed RM3,050 per month, or their per capita income must not exceed RM610.

Additionally, applicants are not allowed to own excessive assets. For example, applicants who own more than 3 acres of agricultural land, a house valued over RM200,000, or a vehicle worth more than RM50,000 (except motorcycles or vehicles for small businesses) are not eligible to apply.

Eligibility Evaluation Process and Approval Determination

The Amanah Ikhtiar loan process involves a thorough eligibility assessment. AIM evaluates whether the applicant meets the financial and income criteria set. For applicants who succeed in the initial evaluation, they will be required to form a group consisting of 5 women who have no close familial relationships. This group will be mutually responsible for ensuring that repayments are made regularly.

Additionally, applicants need to attend an orientation session and a basic Ikhtiar course before the loan can be approved.

Types of Loans and Financing Schemes Offered by AIM

Amanah Ikhtiar Malaysia offers several types of financing schemes to meet the needs of various groups, whether for starting a business, expanding an existing business, or meeting social and educational needs.

Loans for New and Existing Entrepreneurs

For those wishing to start a small business, AIM offers the i-Mesra scheme, which provides basic financing of up to RM10,000. This loan typically has a repayment period of around 100 weeks. For female entrepreneurs aged 40 and above, there is the i-Srikandi scheme, which offers financing between RM10,001 and RM30,000 with a repayment period of up to 150 weeks.

For those who already own a business, AIM also offers additional financing through schemes such as i-Sejahtera, designed for social purposes and small businesses. This allows existing entrepreneurs to expand their businesses or cover other operational costs.

Financing for Educational and Social Needs

AIM also offers financing for education through the i-Bestari scheme. This scheme provides financial assistance of up to RM5,000 to cover the education costs of the children of Sahabat members, such as tuition fees, book purchases, and other educational necessities.

Additionally, there is the i-Penyayang scheme, which provides financial assistance to members facing financial difficulties or unexpected project failures. This scheme helps those in need of financial support after experiencing unforeseen issues.

Application Process and Document Preparation

To apply for the AIM loan, applicants need to follow several important steps. This application process ensures that only those who meet the requirements and have good commitment can obtain the loan.

Step 1: Forming a Group

The AIM loan is based on a joint guarantee system, where applicants need to form a group of 5 women with no familial relations. Each member of this group will be mutually responsible for ensuring that repayments are made regularly.

Step 2: Completing the Application Form

After forming a group, applicants must complete the application form, which can be obtained at a nearby AIM office. This form requires the applicant's personal information, details of the business to be undertaken, and supporting documents such as a copy of MyKad.

Step 3: Attending a Center Meeting

Before the application can be approved, applicants must attend a Center Meeting held by AIM. During this meeting, potential Sahabat members will be briefed on the rules, repayment responsibilities, and presented with their business proposal.

Step 4: Approval Evaluation

After attending the orientation session and completing the eligibility evaluation process, financing will be approved if all conditions are met. This approval usually takes between 3 to 4 weeks after the application is submitted.

Repayment System and Joint Guarantee

One of the key aspects of the Amanah Ikhtiar loan is the repayment system, which is done weekly. Each group must attend the Center Meeting to make loan repayments. These repayments are made progressively throughout the loan period, depending on the amount and type of loan applied for.

The concept of joint guarantee encourages group members to help each other and ensure that all payments are made according to schedule. Failure of one member to make a repayment can affect the reputation and eligibility of the entire group, therefore, group members will monitor and support each other to ensure that all payments are made on time.

Advantages and Disadvantages of the AIM Loan

The AIM loan offers many benefits to low-income groups, but there are also some disadvantages that need to be considered before applying.

Advantages of the AIM Loan

1. No Interest (Riba): The AIM loan does not charge interest (riba), making it more favorable for those experiencing financial difficulties.
2. Flexible Repayment System: Repayments are made weekly, giving borrowers more time to generate income before making payments.
3. Group Support: The joint guarantee concept, where group members are responsible for one another, helps reduce the risk of payment failure.

Disadvantages of Amanah Ikhtiar

1. Lengthy Application Process: The application process can take time as it involves multiple steps, such as group formation, orientation, and basic Ikhtiar courses.
2. Strict Eligibility Requirements: Applicants must meet strict financial conditions, such as income and asset limits, which may limit eligibility for some individuals who genuinely need assistance.

Emergency Loans for Financial Crisis

For those who need instant loans, the AIM loan is not a quick option as the approval and application process takes several weeks. However, for applicants seeking faster financial support, other financing schemes like TEKUN Nasional offer immediate loans for urgent needs. Nevertheless, if you can plan ahead, the AIM loan remains a more beneficial option in the long term.

Practical: 3 Tips to Maximize the Benefits of the AIM Loan

1. Prepare a Strong Business Plan: Before applying, ensure you have a clear and realistic business plan. This will increase the chances of loan approval.
2. Involve a Fully Committed Group: Make sure you select group members who are committed and disciplined to follow the repayment rules, as the failure of one member can affect the entire group.
3. Take Advantage of Training and Support: Do not miss the opportunity to attend the courses and training provided by AIM. These sessions will provide valuable knowledge to manage your business and finances better.

Conclusion

The Amanah Ikhtiar Malaysia (AIM) loan is an excellent option for the B40 group who wish to start or expand a small business. With a friendly structure and ongoing support, AIM provides an opportunity to improve living standards and gain better financial skills. Although there are some challenges in the application process, its long-term benefits make it a worthwhile choice for those who meet the criteria. If you need an immediate loan in an emergency situation, be sure to consider the various available options, but remember that a long-term loan from AIM will still provide many benefits in improving your family's economic life.

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