Economic Transformation Program in Terengganu

In 2012, as part of its research in Islamic Financial Criminology, the Accounting Research Institute (ARI HICoE) initiated three Islamic-based economic transformation programs: Islamic microfinance, Islamic-based social enterprise and corporate waqaf.  When reviewing existing Islamic microfinance model, ARI researchers identified one very important gap - the need to link micro entrepreneurs to a complete supply chain, including both supplier(s) of reasonably-priced raw materials for the business and buyers of the business's finished products.  A pilot research project was carried out in Tanjung Karang with a group of microfinance recipients from Amanah Ikthiar Malaysia (AIM) - a microcredit organisation.  The entrepreneurs were involved in a tailoring business.  Since their clients were mainly among locals from Tanjung Karang, the market place for the "baju kurung" business was not only limited, more unfortunately, it was also seasonal in nature.  ARI researchers invited Mydin Holding Berhad to act both as a supplier of fabrics for baju kurung and as a buyer of ready-made baju kurung.  ARI developed a training module where entrepreneurs were exposed to new competencies of financial management, business planning and business governance.  With the much improved version of business framework, the entreprenuers were able to increase their sales, profits, capital and savings.   The Tanjung Karang micro business was later replicated to two other locations in Terengganu through a tripartite collaboration of ARI (UiTM), Yayasan DiRaja Sultan Mizan (YDSM) and Mydin Holding Berhad.  YDSM identified two locations - Paka and Kuala Terengganu.

 Using the same framework, Mydin Holding Berhad supplies fabrics to the tailoring business entrepreneurs. and later on, buy-back the completed baju kurung for sale in Mydin Hypermarkets.  To mark the successes of both the Paka and Kuala Terengganu micro-business groups, ARI organised a three-party Memorandum of Agreement between Universiti Teknologi MARA, YDSM and Mydin Holding Berhad.  The Islamic microfinance programs in Tanjung Karang, Paka and Kuala Terengganu had significantly transformed the economic status of the entrepreneurs.  In fact UiTM is planning to replicate the program to other states through the respective state campuses.