2. Intellectual Capital and Government Intervention on the Islamic Microfinance Institutions Performance Authors : Maryam Jameelah Hashim, Assoc. Prof. Dr Syed Musa Alhabshi University: IIiBF International Islamic University Malaysia

3. Introduction Microfinance Institutions goal is to serve the poor.
Improve MFIs performance
to expand outreach
to achieve financial sustainability

4. Challenges
Challenges in maintaining IMFIs operations and remain sustainable:
Intellectual capital
Human capital
Customer capital
Structural capital
Social capital
Government intervention

5. Issues Less government intervention Lack IC management
IMFIs Performance
Low Performance
Lack IC management
Less government intervention
Irrelevant current banking system

6. Low Performance
Low Performance due to the high default rates, inability to reach sufficient number of borrowers, dependence on subsidies and only few still live with the original objective which is “including the excluded” (Bhatt & Tang, 2001).

7. Lack IC Management
Top management is uncertain the valuable resources possessed by the firm will caused to success of new strategies (Amrizah & Rashidah, 2013).

8. Less Government Intervention
Lack of regulation imposed by government and community institutional infrastructure for delivery of microfinance are not equally distributed (Sharma, 2010).

9. Irrelevant current banking system
Abdul Rahman and Dean (2013) claims that the current banking system is not appropriate for the poor in Muslim society.

10. Objectives
To investigate the association between intellectual capital (human capital, customer capital, structural capital and social capital) with IMFIs performance.
To examine the influence between government intervention and IMFIs performance.
To identify types of IMFIs as moderator has a positive impact on IMFIs performance.

11. Previous Study
Growth and sustainability of IMFIs largely depend on the availability of external funds and their efficient operations(Ahmed, 2002).
IMFIs Performance
IC is the most important strategic assets in evaluating the performance of an organization in the developing and under developed countries (Khalique, Abdul Nassir Shaari, Md. Isa & Ageel, 2011; Amrizah & Rashidah 2013 and Ngah & Ibrahim, 2012).
Intellectual Capital
Governments can encourage the shift toward sustainable(Hubka & Zaidi, 2005) and increase their outreach (Greuning, Gallardo, & Randhawa, 1998)
Government Intervention
Tradeoff exist between financial sustainability and outreach in low disclosure MFIs. Hence, it is proven that financial sustainability and outreach are positively related for high disclosure MFIs (Quayes, 2012).
Types of IMFIs

12. Conceptual Framework Islamic Microfinance Institutions Performance
Intellectual Capital
Human Capital
Islamic Microfinance Institutions Performance
Customer Capital
Structural Capital
Social Capital
Government Intervention
Types of IMFIs

13. Hypotheses
H1: Intellectual capital (human capital, customer capital, structural and social capital) has a positive influence on IMFIs performance.
H2: Government intervention has a positive influence on IMFIs performance.
H3: Types of IMFIs as moderator has a positive impact on IMFIs performance.

14. Methodology data being gathered via structured questionnaires.
Methods use Structural Equation Modeling (SEM).
Respondents comprises of managerial levels at selected bank based IMFIs (commercial- driven) and non-bank based IMFIs (government/non- government funded).

15. Expected Result
It is expected that intellectual capital and government intervention should have positive influence towards performance of Islamic microfinance institutions.
IMFIs which possess all the IC components are endowed with more strength to compete in the business as compared to those which possess only a single IC resource (Amrizah & Rashidah, 2013).
Therefore, governments of developing countries should balance resources in investing in IC and physical investments (Chen, Cheng, & Hwang, 2005).

16. AlHuda Center of Islamic Banking & Economics - Pakistan
AlHuda CIBE FZ LLE - U.A.E
P: ,
AlHuda Center of Islamic Banking & Economics - Pakistan
Ph: (92-42) , Fax: (92-42)
Website: