Microfinance For Rural Entrepreneurship Development

Mulyaningrum, . and Suraya, Ahmad and Othman, Aman (2008) Microfinance For Rural Entrepreneurship Development. Project Report. UTeM, Melaka, Malaysia. (Submitted)

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Abstract

By the 1990s, economic globalization was becoming a reality. As predicted, it brought winners and losers. Among the losers were people employed in low-skill, low-wage manufacturing that made up a large portion of the rural economy. The awareness of the role of micro-entrepreneur as one of the "backbones" of rural economy has increased. It is because of the fact that micro-entrepreneur conduct income generation activities for creating self-employment. More than 73% of micro-entrepreneur especially in the rural faced financial problem. They need credit but not apply because they do not have sufficient collateral or feel their enterprise does not qualify (Asian Development Bank, 2002).Microfinance is a type of banking service that is provided to unemployed or low-income individuals or group who would means of gaining financial services. Ultimately, the goal of microfinance is to give low-income people a self-sufficient by providing a means of saving money, borrowing money and insurance. Microfinance has gained recognition as an effective way to bring very poor families lowcost financial services.Microfinance produces micro-credit as a financial innovation which originated in developing countries where it has successfully enables extremely impoverished rural people to engage in self-employment projects that allow them to generate an income, and begin to develop entrepreneurship. Microfinance work frequently with government agencies, non-government agencies by providing soft loan, and model program for developing entrepreneurship among small enterprises, rural entrepreneur, and among the general small-scale entrepreneur.In many cases, microfinance begins to build wealth and exit poverty among rural people.

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