Bank Islam Malaysia Bhd is targeting to benefit 3,500 microentrepreneurs from its microfinance innovation — the BangKIT Microfinance — in the next five years.

Sadaqa House — the first-of-its-kind Islamic crowdfunding platform that was launched by Bank Islam on Jan 19, 2018 — funds this microfinance facility from donations via cash or online transfers made by corporate institutions and the public, said Bank Islam.

The banking group today launched the Bang KIT Microfinance to provide public awareness on the importance and function of Islamic Social Finance in ensuring the socio-economic wellbeing of the country, especially in this challenging environment caused by the Covid-19 pandemic.

As a start, RM2 million is allocated for BangKIT Microfinance, according to the group. From this allocation, Bank Islam is targeting to benefit around 300 to 350 microentrepreneurs, subject to the availability of the funds.

Bank Islam chief executive officer Mohd Muazzam Mohamed said: “We have received funds from a donor, one institution of about RM2 million, [thus] we are looking at 300-350 recipients from this RM2 million,” he said, without revealing the name of the institution.

“We have put ambitious target for the next five years of RM20 million, hopefully that will benefit between 3,000 to 3,500 recipients under the BangKIT Microfinance,” added Mohd Muazzam during a virtual media briefing in conjunction with the launch ceremony of Bank Islam’s social financial initiative today.

According to Bank Islam, the facility is designed to assist selected unbanked and underbanked microentrepreneurs to obtain capital start-up business or business expansion and subsequently build a credit record to qualify them for other financings in the future.

Offered under the al-Qard contract (interest-free), BangKIT Microfinance provides financing as low as RM500 to RM3,000 for start-up businesses, and RM3,000 up to RM20,000 for business expansion with a repayment period of between six months to three years.

It said customers who benefited from this facility will be provided with structured entrepreneurship training to ensure their business sustainability.

Furthermore, Bank Islam said Sadaqa House also organised #KitaBantuKita Campaign from Nov 25, 2020 until Jan 31, 2021 to raise funds from the public to help ease the burden of those affected, following the third wave of Covid-19 infections.

Commenting on the enhanced targeted repayment assistance (ETRA) applications, Mohd Muazzam said 500 applications have been received so far from the B40 group.

On Sunday (Nov 22), Bank Islam announced that it is ready to accept ETRA applications from B40, M40 and microenterprises adversely impacted by the Covid-19 pandemic.

The ETRA was announced by Finance Minister Tengku Datuk Seri Zafrul Aziz at the tabling of Budget 2021 earlier this month.

Courtesy by :https://www.theedgemarkets.com/a