The iTEKAD initiative, introduced by Bank Negara Malaysia (BNM) in May 2020, is a social finance program designed to assist low-income microentrepreneurs in Malaysia. The program combines blended finance methods, such as the use of philanthropic funds like zakat, with business development training.
A recent review, supported by BNM, examined the implementation of the iTEKAD initiative using surveys and interviews with Participating Financial Institutions (PFIs) and Implementation Partners (IPs). According to the report, the program has largely followed its original design and objectives. Collaboration between PFIs and IPs has allowed greater outreach to low-income microentrepreneurs and improved capacity for evaluating and strengthening participants’ creditworthiness. However, only a small number of PFIs have set up frameworks to measure and track the development of participants’ credit scores.
The review found that there is room for improvement in refining how participants are selected. Using both socio-economic and non-credit data could help ensure a fairer and more informed selection process for those most in need. It also highlighted inconsistencies in training delivery due to varying interventions. The report suggests that PFIs and IPs should work towards standardized training programs and consider partnering with technology providers to enhance access and quality.
Another area identified for enhancement is monitoring and evaluation (M&E). A stronger M&E framework would allow for better tracking of participant progress, identification of gaps, measurement of long-term impact, and ongoing feedback for improvements.
The report also pointed out the need for a platform where PFIs and IPs can share knowledge. Such exchanges could promote capacity building and improve outcomes across all involved parties.
Despite aiming for comprehensive coverage, the review acknowledges certain limitations. It recommends further research into cost-benefit analysis, repayment behaviors among microentrepreneurs, and long-term economic impacts—especially concerning women and youth. Comparing iTEKAD with other microfinance initiatives may offer insights into better resource allocation and risk management.
Based on these findings, the World Bank provided several recommendations:
"Develop a robust participant selection framework. Establish a comprehensive internal screening framework for microentrepreneurs that captures credit and non-credit data."
"Develop a standardized training intervention. Define and establish clear minimum standards for training interventions."
"Establish a standard methodology for M&E. Define and establish clear minimum standards for indicators and targets, measurement bases, data collection methods, M&E plan, and data governance."
"Facilitate knowledge sharing and documenting learnings. Conduct annual roundtable discussions with relevant stakeholders."
"Develop a long-term evaluation plan. Identify and plan for future research studies to evaluate the effectiveness of the initiative."
Policy makers are encouraged to consider these recommendations while weighing potential costs against benefits as they work toward improving iTEKAD’s implementation.