Amanah Ikhtiar Malaysia (AIM) Loan is a micro-financing scheme to help the poor low-income group in Malaysia gain a means of income. This AIM loan allows people to start a new or expand an existing business. Here in this article we shall look at the finest details of AIM loans.
Eligibility Criteria for the AIM Loan
Before applying for the Amanah Ikhtiar Loan, it is important to review the eligibility requirements and evaluation process involved. Outlined below are the conditions for acceptance:
Financial and Income Criteria
One of the requirements for applying for the AIM loan is that you fall under the bottom 40% group (B40). Those wanting to apply for this loan, their household income cannot exceed RM3,050 per month, or their per capita income cannot exceed RM610.
In addition, applicants cannot own too many assets. Those with more than 3 acres of agricultural land, a house sold for more than RM200,000 or a car costing more than RM50,000 (excluding motorcycles or commercial vehicles) may not apply.
Eligibility Evaluation Process and Approval Determination
The Amanah Ikhtiar loan process entails an opportunity for assessment of eligibility. AIM will check whether the applicant passes in terms of the financial requirements and income criteria set. For those who do at the selection stage, they will need to come together to form a group of 5 women, who are not closely related who will do their best to make sure that repayments are made.
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 a variety of financing schemes for those planning to set up a business, expand a business, as well as for their social and educational needs.
Loans for New and Existing Entrepreneurs
For those planning to go into business, there’s the i-Mesra scheme, which offers micro-credit of up to RM10,000 in basic financing (repayable in around 100 weeks); and the i-Srikandi scheme for women aged over 40, which does likewise, though the amount is between RM10,001 and RM30,000 and the repayment period up to 150 weeks.
For existing business owners, AIM also provides additional financing through schemes like the i Sejahtera, which is targeted at social and small businesses and allows entrepreneurs to expand their business or cover additional social costs.
Financing for Educational and Social Needs
AIM also offers financing for education in the form of the i-Bestari scheme. Under this scheme, AIM provides funds of up to RM5,000 to assist children of Sahabat members with education expenses, including tuition fees, book purchases, and more. There is also the i-Penyayang scheme, where members who encounter a financial crisis or unexpected project failure can avail and receive financial assistance from AIM.
Application Process and Document Preparation
To successfully apply for the AIM loan, applicants must adhere to several critical steps.
Step 1: Forming a Group
For the AIM loan, applicants need to create a group of 5 women who are not related to one another by blood or marriage, who will become jointly responsible for regular repayments.
Step 2: Completing the Application Form
Once they have formed a group, the applicants must fill up the application form which can be obtained at the nearest AIM office. This will require information such as individual members’ particulars, a description of the business they intend to undertake, and so on together with supporting documents such as a copy of MyKad.
Step 3: Attending a Center Meeting
Before the application can be approved, all applicants must attend a Center Meeting held by AIM. Potential Sahabat members will then be briefed on the rules and repayment responsibilities, and will be presented with their business proposal.
Step 4: Approval Evaluation
After the orientation session, these steps will allow you to receive your financing if all eligibility criteria are met. This usually occurs 3 to 4 weeks after submission.
Repayment System and Joint Guarantee
One of the key characteristics of the Amanah Ikhtiar loan is the repayment system. Loans are paid back weekly. Members of the group must attend the Center Meeting to repay their loans. Payments are made progressively throughout the loan from the date of application depending on the amount and the type of loan applied for.
One of the connotations of joint guarantee is that of a commitment between group members to help one another and make certain that all payments are made according to the schedule. Failure of one member to repay could jeopardize the standing and/or the future access to credit of the whole group, and so group members will closely observe, support, and take steps to see that everyone makes their payments.
AIM Loan Advantages and Disadvantages
While the AIM loan provides numerous benefits to low-income people, there are also several drawbacks that must be addressed prior to application.
Benefits of the AIM Loan
- No Interest (Riba): The AIM loan is not charged any interest (riba), making it more suited for those who are struggling financially.
- Flexible repayment system: Because repayments are made weekly, borrowers have more time to earn income prior to making payments.
- Group Support: Because you are guaranteed by one another within the group, the threat of not paying back is reduced. Since it is a joint guarantee, of course.
Disadvantages of Amanah Ikhtiar
- The application process takes time. There are many hoops to jump through; like group formation then orientation, then the basic Ikhtiar courses.
- Strict eligibility criteria: Applicants must fulfill strict financial conditions, such as income and asset limits, which may prevent needy people from qualifying.
Emergency Loans for Financial Crisis
If you’re in need of instant loans, AIM is not for you since approval and application take several weeks. If you’re looking for faster funds, you might turn to other financing schemes like TEKUN Nasional that offer quick loans for urgent needs. But if you can wait, AIM is a better loan in the long run.
The Practical: 3 Ways to have your cake and eat it too with the AIM loan!
- Prepare a Strong Business Plan – to secure the loan it helps to show that you’ve done your homework!
- Get Involved With A Fully Committed Crew – make sure you choose your group carefully, to be with people you can trust to follow the group rules, because one bad apple spoils the bushel!
- Take the Time to Learn from the Training they Provide – don’t skimp on taking advantage of their courses, attend as many of the supportive ‘bread’ sessions as you can get into, and learn all you can about how to handle your additional ‘sourdough’ and business better!
Conclusion
AIM loan - For the B40 group wanting to start or grow their little enterprises, this is the friendly loan! With specific financial assistance to help the members improve their standard of living to better cope with house financing, this loan caters to those who prefer a more manageable, easy to apply for and who will utilise the amount altogether in growing their business. There are some challenges when it comes to aspiring members with their application but AIM more than makes up for it on a long term basis. That's if you need to borrow cash fast; nice to consider them now but having AIM long term on hand will do a lot of good for your family's economic life.
FAQ
Who is eligible for the AIM Loan?
Applicants must be Malaysian, 18 years old and above, B40 (a household income not exceeding RM3,050.00 per month) and eligible for the other requirements.
What do I need to do to apply for the AIM Loan?
To apply for the AIM Loan, you need a group of 5 women to register, complete the application form, attend the center meeting and basic course, and submit copies of documents such as your MyKad.
Does the AIM Loan need to be guaranteed/ collateralised?
No, AIM Loan does not need to be guaranteed/ collateralised. We provide financing based on the joint guarantee system within the group.
Can I avail AIM Loan for my child’s education?
Yes, AIM offers the i-Bestari scheme to help cover educational costs for children, including tuition fees and learning materials.