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Nigerian Delegation Impressed


Nigerian Delegation Impressed

A Nigerian delegation consisting of government officials visited Yayasan Bina Upaya Darul Ridzuan (YBU) at its office in Greentown Square recently. The objective was to get acquainted with the various programmes undertaken by the foundation to improve the quality and standard of living of the underprivileged and the marginalised.

The team led by Abu Bakar Abu Rahman was briefed on the activities of the foundation by Yayasan Bina Upaya Chief Executive Officer, Dato’ Ismail Saffian. The Nigerians were very impressed particularly with YBU’s microcredit scheme which has been actively pursued by the foundation since its inception in 2009.

Team leader, Abu Bakar reiterated his interest in formulating a similar programme for implementation back in Nigeria. “I find YBU’s microcredit programme very effective and also cost efficient,” he told reporters.

Besides micro-credit, programmes such as the giving away of food hampers, housing for the poor and the homeless, business-training courses and coaching for underprivileged students are also being considered.


YBU: Empowering the Poor Shows Positive Results



by James Gough

Yayasan Bina Upaya (YBU) microcredit financing
Hairul Anwar Mohamed Noor, YBU’s CFO

Yayasan Bina Upaya or YBU, which was founded under the Trustees Act in October 2009 began its operations in March 2010 with the goal of improving the living standards of low-income households through its Microcredit Financing Programme. Ipoh Echo which originally carried a report on YBU’s activities in 2010 (December 16, 2010) recently met with its Chief Financial Officer Hairul Anwar Mohamed Noor to get an update.

Interest Free Loans Coupled with Stringent Vetting Paying Off

According to Hairul, since its inception, YBU has so far provided assistance to 989 recipients with RM13.5 million of loans disbursed. Interestingly it is currently compiling a booklet of 100 of its successful recipients who have managed to improve their livelihood.

By any standard a success rate of just over 10 per cent in just over two years is already a good measure. According to Hairul, an added bonus is that over 50 per cent of its borrowers service their loans on time each month, 10 per cent service their loans months in advance in anticipation of rainy days while another 10 per cent settle their loans outright way ahead of the repayment schedule. Considering that the customers are the underprivileged, this healthy cash flow is a revelation.

Yayasan Bina Upaya (YBU)
Fatimah Fadzil

Yayasan Bina Upaya (YBU) microcredit financingEmpowered Recipients

Fatimah Fadzil, 53, is a single mother selling fried curry puffs. In 1999, when her husband died due to a traffic accident she was forced to fend for her three children on her own. She tried several jobs but the pay was small and it was difficult to make ends meet. She approached a welfare body earlier but was told that as she was still young and could still work to support herself.

Fatimah later joined a single mother’s association, Nur Kasih, and was encouraged to venture into the curry-puff business. She manually produced 150 curry puffs per day, which catered to food outlets. Fatimah operates out of her Ashby Road flat.

Two years ago she was approached by YBU to participate in their single mother programme called Ladies Uptown. Subsequently, to increase her production capacity, she obtained a loan from YBU and purchased two machines, a flour mixer and a pastry kneading machine which have the capacity to make up to 1000 curry puffs a day. Currently she makes 300 curry puffs per day which she supplies to individuals, food outlets and government departments.

Fatimah took her microcredit loan from YBU in 2010. Her repayment period is 60 months but anticipates on settling her loan much earlier. Two of Fatimah’s children are still studying. Their needs have been taken care of. Generally she is comfortable, her livelihood has improved and her only concern is that she has to work every day to fulfil her customers’ orders.

Gawri and Indian Rice

Yayasan Bina Upaya (YBU) microcredit financingGawri a/p Manisagaran, 27, operates an Indian rice food stall at the Candy Bar coffee shop in Simpang Pulai which offers 10 varieties of dishes daily. Previously she operated daily along the Simpang Pulai to Pengkalan main road for almost two years in her own stall before shifting into the nearby coffee shop. With her YBU microcredit loan, Gawri purchased more items for her shift to the shop and realised a doubling of her turnover almost overnight.

Gawri is married and has two children. Her husband works in KL and comes home once a month. She recently purchased a Perodua Viva and anticipates she will be able to settle her YBU loan before its full period.

YBU’s Microcredit Financing Programme

What sets YBU apart from other credit facilities is its microcredit system. Loans, based on Islamic principles, are interest free and do not require collateral or a guarantor. The programme is multiracial and is open to all communities and anyone can apply. For the two ladies mentioned above, there was no way a bank would give them a loan without a secure collateral in hand which they couldn’t provide. However, with YBU’s microcredit financing programme, Gawri and Fatimah were given an opportunity to improve their livelihoods and they have seen the results almost immediately.

The programme enables community members to apply for loans for working capital in economic activities such as opening a food stall, or increasing output of existing small businesses.

Loan values range from RM1000 to RM20,000. Eligible applicants must be between the ages of 18 and 60. According to Hairul the loan repayment period is for a maximum of 60 months and the repayment value is mutually agreed on between YBU and the recipient.

Stringent Vetting Prevents Delinquent Loans

The goal is to provide loans to the very needy and ensure the loans fulfil their objective of empowering the recipient. Hence the vetting of each application is very stringent to ensure the loan does not become delinquent. All applications will also be cross checked against the government’s welfare database such as e-Kasih to identify if previous loans had been provided.

Applicants fill an application form available at its office or on its website after which YBU will send its team for an on-site visit to vet the applicants.

Successful applicants, before receiving their loans, are called to the office and are given a motivational talk on the need to grow their existing source of income and improve their overall livelihood for the future. Subsequently too, the officer overseeing the loan will monitor the applicant for three months after disbursement, after which another department monitoring debt collection will take over.

“All this monitoring is necessary to ensure the recipient will successfully improve their livelihood and meet the objective of the programme. By being successful their self confidence improves. For a poor person the responsibility to repay the loan is very important and more so for a Muslim,” explained Hairul.

YBU would like the successful recipients to be more productive and does offer them a second loan should they want to expand their businesses. However, many have turned down the offer saying they are now able to take care of their families “which indicates that their livelihood has improved”.

The data of successful applicants will subsequently be updated to the government’s e-Kasih database.

Over the last two years YBU has compiled its own database of underprivileged citizens. This is done by its squad of volunteers or sukarelawan numbering over 3000 throughout the state currently. Generally the poor are ashamed to share their problems hence the job of the volunteer is to vet and identify suitable candidates.

Poverty Eradication Programmes

Besides its microcredit financing programme, YBU had initiated other activities to distribute its economic benefits. These include:

Housing Aid programme which refers to their housing assistance to construct new homes as well as upgrade and repair homes including those damaged by natural causes. The purpose of this programme is to enable a comfortable and quality living environment for the poor. Since its inception there have been 596 beneficiaries.

Adoption Programme. This programme applies to primary students in Year 5 and 6 to be entitled for financial assistance including tuition fees. To date a total of 113 students have been put under this programme of which 56 students obtained between 2 to 7As in the recent UPSR examination.

Higher Education Programme. This year YBU participated in an MOU with two institutions of higher learning, Quest International University of Perak (QIUP) and ITP (Perak’s Institute of Technology) to provide potential underprivileged student places at their institutions.

Federal Government Interest

YBU’s multi-pronged activities towards addressing and improving the livelihood of the underprivileged in the state have “captured the interest of the Federal Government who are contemplating implementing it nationwide,” said Dato’ Seri  DiRaja Dr. Zambry  Abdul Kadir during YBU’s  second Symposium on Capacity Building held during the middle of this year.

Based on testimony from the recipients and interviews with YBU officials, the multi-pronged strategies being implemented do address the issues of poverty by empowering the recipient to improve his livelihood. Hence it works. As a YBU executive expressed “when the plan works, the recipient’s face beams with self confidence”.

Further testimony of this can be noted from the recipients making their repayments on time.

Poverty is everywhere and is a never ending story. Fortunately for the underprivileged in Perak we don’t just give them fish to eat for a day we teach them how to fish.


Micro-Credit Makes Faizul’s Day


For five long years Muhammad Faizul Karim laboured on the five-foot way to earn a living mending shoes for his customers. Today he operates from a rented shop lot in Pekan Razaki, Sungai Rokam, Ipoh. Although he is shielded from the elements, it is still not enough. “What I really need is a shoe-stitching machine which will help improve my efficiency,” he told Ipoh Echo when met recently.

The economy of skill that comes with the machine is the underlining factor. Faizul could heave a sigh of relief, as his application for a micro-credit loan was approved by Yayasan Bina Upaya Darul Ridzuan sometime ago. He received the RM6,000 loan in late July, just before the fasting month. “I’ve placed an order for the said machine from its manufacturer in Taiwan and am awaiting its arrival,” he said.

Faizul is appreciative of YBU’s efforts in lifting the living standards of the poor and the marginalised in Perak. “I wonder what would’ve happened if there’s no such scheme in place?” he enjoined.

With a shoe-stitching machine, Faizul can double his efforts at repairing shoes. He has a steady stream of customers who use his services and despite his shortcomings, keep coming again and again. “I charge them accordingly. I guess their repeat appearance is testimony of the quality of service I render,” he said.

All said and done, YBU has one satisfied customer on hand who appreciates what the foundation does for people like him. Faizul has started repaying his loan. The low interest rate charged is a plus factor. “Paying RM170 a month is not a burden to me,” he added.


Courses to Improve Performance


Ghaffarud-Din Usulud-Din, YBU’s Chief of Micro-Credit Services

Goals set by Yayasan Bina Upaya Darul Ridzuan (YBU) to reduce poverty have been achieved, to a certain degree, since the introduction of the micro-financing scheme six months ago. The scheme has benefited some 331 small-time entrepreneurs who are involved in a number of commercial ventures, ranging from hawking cookies to cultivating rock melons. The foundation has invested almost RM3 million in the scheme, dishing out loans to deserving applicants.

Foundation’s Chief of Micro-Credit Services, Ghaffarud-Din Usulud-Din, said that capacity-building programmes aimed at improving business, are in the pipeline. “Two such programmes will be conducted in June,” Ghaffarud-Din told Ipoh Echo. One is on marketing and basic accounting. The other is a practical course getting those with certain business expertise to share their experiences with the rest. “The programmes are geared towards making the participants more productive and resilient.”

The foundation plans to organise a sale carnival to coincide with a momentous occasion in the calendar year. The carnival, according to Ghaffarud-Din, will allow the 300-odd participants to market their goods and services under a single roof. “It’ll expose them to a greater mix of buyers.”

The efforts of the hard-working and enterprising ones will not go unnoticed, said the department chief. “They’ll be given awards for their perseverance.” This will be the culmination of the multi-layered programmes to assist this business community. The MB will be invited to give away the awards.

Evaluating the entrepreneurs’ performance will be the foundation’s next target in line with its efforts to enhance efficiency and productivity.