Bank Islam Malaysia Berhad has launched a new Islamic social finance initiative, BangKIT Microfinance. The innovative product is funded by a sadaqah instrument, via an Islamic crowdfunding official portal – the first of its kind in Malaysia.
BangKIT Microfinance is designed to assist selected unbanked and underbanked micro-entrepreneurs to obtain capital start-up or expand their businesses, subsequently building a credit record to qualify them for future financing. It provides financing from as low as RM500 to RM3,000 for start-up businesses, and RM3,000-RM20,000 for business expansion. The repayment period is between 6 months to 3 years and it is offered under the al-Qard (interest-free) contract. Customers will be provided with structured entrepreneurship training to ensure business sustainability.
The microfinance facility is funded by Sadaqa House through donations made by corporate institutions and members of the public. To start off, RM2 million has been allocated to BangKIT Microfinance, with the target of benefiting more than 200 microentrepreneurs. Eligibility criteria for BangKIT Microfinance include having a registered business with SSM, an acceptable and viable business plan with positive cash flow to repay the loan, and an account with Bank Islam.
“Islamic banking has great potential to utilise Islamic social financial instruments such as zakat, waqf, and sadaqah,” said YB Dato’ Sri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy), who officiated the launch ceremony. “These instruments should not be limited to the provision of basic needs and livelihoods of the needy or for religious purposes such as the construction of mosques and madrasahs only. It can be expanded to help the underprivileged and the community who are severely affected by the uncertain economic situation, to enable them to be independent and sustainable in the long run.”
The launch of BangKIT Microfinance is the main highlight of Bank Islam’s Social Finance Month celebration throughout November 2020. On top of that, Sadaqa House Bank has introduced its new official portal to expand the potential of the Islamic crowdfunding platform, as well as a new #KitaBantuKita Campaign to raise funds for those burdened by the third wave of Covid-19. For every RM10 contribution made to the campaign, Sadaqa House will match RM10 up to a maximum of RM500,000.