2. Contents of the Presentation
HIV/AIDS Socioeconomic impacts in
Malaysia
Microfinance as a potential tool
Islamic Micro Finance
Rationality
Operational Model
Recommendations

3. Socioeconomic Impact of HIV/AIDS in
Malaysia

4. Total 2010
Prevalence 15- 49 = 0.5% 10% F
91,362
40000
17.9 %AIDS
35000
30000
35%
25000
20000 HIV
(13-29)
AIDS
15000
10000
5000
0
< 2 years 2 - 12 13 - 19 20 - 29 30 - 39 40 - 49 > 50 years No Data
years years years years years

5. Been seen as a health issue rather than socioeconomic
Threat
Cost to mitigate HIV/AIDS outcomes and information in
regards with socioeconomic impact of HIV/AIDS in
Malaysia is very limited, despite its crucial guidance for
related policies

6. Quantifying strategic plans
Morbidity/mortality
Baseline Baseline
estimates projection Socio-economic
implications/costs
What’s going What will happen
on now next (if nothing
changes) Cost of
intervention
Validate with
surveillance
data/trend Impact of
Alternative Morbidity/mortality
intervention
scenario
Socio-economic
projections
implications/costs
‘What if’
interventions
Strategic
planning

7. Socioeconomic impacts study in Malaysia
- Hospital Cost Analysis
- Household Survey

8. Study Locations
Data was collected from four different zones in the country
according to density of HIV/AIDS cases in each zone, based on
Section of HIV/AIDS statistics for the last three years.
STUDY
Location
KL&SELANGOR JOHOR KEDAH KELANTAN

9. Hospital Cost Analysis
The principle of the costing approach
General
HIV/AIDS Top down
data from in the 4
the 4 selected Bottom up
selected hospitals, costing for
hospitals
(ALOS,
excluding
drug cost
+ drug
prescribed in
the hospital)
No. of opt. Visits,
No. of
admissions, etc.)
A combination approach of Top down & Bottom up costing methods
Drug cost data was extracted from 3585 HIV/AIDS patients’ records

10. The estimated cost of health care services for HIV/AIDS patient per year in
Malaysia.
Cost of care for HIV/AIDS inpatient per day of stay.
RM 364.83
Cost of care for HIV/AIDS per outpatient visit
RM 138.64
CD4≤200 CD4>200
Inpatients Outpatients Outpatients Inpatients Outpatients Outpatients
no ARVT with ARVT no ARVT with ARVT
Total cost per
patient per year
6,064.00 1,357.56 9,506.56 4,344.00 749.92 8,829.42

11. Table (VI) The overall national HIV/AIDS health care provider cost break
down for the year 2007
Description Cost
Total inpatients cost of care in 2007 201,605,633.22
Total Outpatients cost of care in 2007 excluding ARVT 67,104,950.48
Total cost of ARVT for 6203 patients in 2007 50,332,692.75
Total provider cost of IP&OP care 319,043,276.45
6203 patients

12. Household Survey
Age (Male vs. Female)
Age Group <13 13-19 20-29 30-39 40-49 50≥ Total
female 0 .10% 12.50% 46.60% 30.70% 9.10% 100 %
male 0 0 9.10% 44.09% 41.60% 5.30% 100 %

14. Education

15. Sexual Orientation

16. How the infection was detected in the first place?
Respondents latest CD4 count
75% are detected in health care facilities because
of illnesses

17. Mode of Transmission/Gender

18. Cost of HIV/AIDS morbidity from
household perspective

19. Direct cost (out of pocket expenditure)
The total estimated median of “Out of Pocket
Expenditure” per year is RM 1080 (500 – 16480) which
is almost 14.7% of patient’s median income a year
RM 192 that is average household expenditure on
health according to Malaysian national statistics 2007

20. One household might have between 1 to 5 patients
under the same roof and to mitigate the over
expenditure and affected household income
Food, accommodation , qualifying plans &
entertainment are respectively affected.

21. Indirect cost (Productivity Loss)
41.1 % of the
patients were
heading their
households

22. Reasons of stoppage work

23. Patients cost for the year 2007
Description Costing model Cost
Total out of pocket Direct cost 72,612,720.00
expenditure per year
Total estimated productivity Indirect cost 287,364,839.40
loss per year
Total Direct + Indirect cost RM359,977,559.4
Representing 0.06% of Malaysian GDP in 2007

24. The overall cost
HIV/AIDS in Malaysia has substantial economic impact
as total estimated cost for the year 2007 was claimed
about RM 679,020,835.85 includes cost of health
care provider, patient’s out of pocket expenditure and
productivity loss of patients
0.11% of the national GDP

25. Socio demographic impacts

26. Marital status
Marital status Before currently
before/currently
Never Married 42.4 38.4 3.7%
Married 44.4 35.4 9%
Dev/Wed 13.1 26.3 13.2
Total 100.0 100.0
64.65 % are currently non married adults and their sexual behavior
needs to be studied.

27. Patients from households headed by non father are more than those
coming from household headed by father. If infected fathers are
excluded,
Chi Square Test showed the difference is statistically significant
(P< 0.001 df (1) for n = 297).

28. Children
No. of children per HIV/AIDS patient who experienced marriage
61.7% Patient
1.9 child
In 2007 is 1179 AIDS related death with estimated No of orphan = 997

29. Internal migration
1%
Running away from the family to stay alone or
with friends
Are the whole Before detection after the detection
family members (%) (%)
staying together
yes 59.6 45.8
no 40.4 54.2
Total 100.0 100.0

30. Psychosocial impacts

31. Current status of disclosure to family members and friends

32. Hostility
21% Have heard about the patients intentionally
harming others?
7.4% we can fine an excuse “it was not a crime or
deviation”
1.3% are firmly supporting the righteousness of these
activities.
To support their revenge, anger, let others share the same feeling,
feeling injustices, and self satisfaction were showed as the reasons.

33. Impact on other household members
61.7% of the respondents having children and among
them 17.6% experienced neighbors prohibit their
children to play with patient’s children.
Majority were indentified from Kelantan followed by Kedah,
Selangor then Johor
Furthermore, 10.1% have children left school from
Kelantan and Kedah for various reasons.

35. Recommendations
Psychosocial impacts monitoring data base
HIV/AIDS patients counselors & Mass media Training
modules
A national research committee should be
established to guide and direct prospective
researches with the view to fill the gaps of
knowledge in this field and to avoid
unnecessary repetition of interviewing PLWAH

36. Microfinance organizations can customize a specific
package for the HIV/AIDS households especially for
the non ill members who can contribute in the
household income and leverage total earning. This
advantage would enhance their care and support and
might help to prevent most of the negative
consequences.

37. Introduction
This section aims to propose an “operational model of
Islamic Microfinance” that can extend financial assistance to
the destitute HIV/AIDS patients so that their productive life
can be illustrated by means of economic activities
The implementation of this model may help to reduce
productivity loss & enhance social protection of the HIV/AIDS
patients and their families.

38. Microfinance System
Microfinance:
• Microcredit is a collateral free, solidarity(group) based
lending programme for the uncreditworthy poor people.
In this programme loan is provided to eradicate poverty
through creating self employment. This system avoids any
legal action and pays doorstep service to the clients.
Besides it emphasizes on obligatory and voluntary savings.
(Yunus 2011)
It facilitates micro-loan, venture-capital, tiny-savings, micro-
insurance and money transfer (IRTI-IDB 2007).

39. Microfinance can play a vital role of easing the negative
economic impact on the HIV/AIDS affected household
(Barnes, 2003).
This provision can increase income and economic safety of
the household extending productivity of the economically
active patients and it also enables the healthy members to
become more productive (Parker, Singh and Hattel, 2000).

40. Conventional Microfinance System
Weakness:
• Interest/ Riba From Islamic Perspective is the main weakness of conventional
microfinance. (Clark, 2002; Segrado, 2005; Obaidullah, 2008)
• Riba is detrimental to the social wellbeing as it causes unemployment rising cost of
capital and consequently it contributes adverse affects on consumption, investment
and employment
• Marginal Efficiency of Capital (MEC) does not stand on the optimum level in the
presence of Riba (Khan 1983)
• The approach of the contemporary Microfinance is “financing based on
repayment”
• A trap of “borrowing-repaying cycle” that creates financial vulnerable condition
(Diop, Hellenkamp and Servet 2007)
• Solidarity and woman-only approach
Conventional microfinance system can’t properly cope with the destitute HIV/AIDS
patients because of sustainable rate of interest (Shankar 2007), Risk-averse
attitude and group based lending method (Rosenberg 2002).

41. Islamic Microfinance
Islamic Microfinance can deal with the higher risk groups
because it believes in mission and market based approach
(Obaidullah, 2008)
Diverse sources of capital (Sadakah/ donation, Waqf/ trust,
and Zakah/ compulsory donation by the wealthy muslim)
(Kaleem and Ahmed 2010).
4 principles such as 1) Completely free from Interest or Riba.
(Borhan 1997) 2 ) Risk and Reward Sharing 3) Financial
risks born solely with the IsMFI not with the borrowers 4)
Loan to socially productive activities
Therefore it could be presumed that Islamic Microfinance would
be better fitted in financing the destitute people with HIV/AIDS.

42. Family Based Lending Methodology Vs Group.
Family based lending is more feasible
Participation of the family members may contribute positively to the
investment and create synergy
As other member of the family will be benefitted from this type of financing
they will be more concern and attentive to the patient.
Instead of liability the patient could be considered as asset.
Patient would feel more comfort, dignity and self-reliance
Patient may feel lees or no stigma
After demise of the patient, family member would be able to continue the
loan scheme inheriting the assets earned by the patient.
Family members would be more empathetic than the group members
Thus family member will get an opportunity to perform their duty to the
patient with greater convenience.

43. Rationality
• Better access to treatment
• Maintain proper food / nutrition and accommodation
• Minimize –ve impacts on other household members
• Gain more care and support from other family members
• Increase adherence to treatment
• Increase adherence to drug rehabilitation
• Decrease the feeling of anger ,revenge and hostility
• Less psychological complications
• practical approach to minimize stigma and discrimination
• Application of Islamic financial tool might bring more religious
institutes to learn more about HIV/AIDS and to help in more
positive way
“Islamic religious institutes are always asked to implement but
not to be involved in the product development”.
• Encourage health insurance companies to cover HIV/AIDS
patients
• Operationalize corporate social responsibility

44. The Operational Model
This model has been drawn based on the
previous literature and our study on the
economic impact of HIV/AIDS on the
patients and their families in Malaysia.
The model integrates:
Islamic Microfinance (A conceptual Model)
Destitute HIV/AIDS (Health Deteriorating
Phases of the Patient )
Household Economic Portfolio (Economic
Management Strategies of the Household)

45. Conceptual Model of Islamic Microfinance
for HIV/AIDS
Source of Capital: Investor,
Sadakah, Zakah, Waqf
IsMFI Services
Microcredit Micro Savings Micro Insurance
Micro Equity
Qard Hassan Charitable
Trustee Activities
Murabaha Financing
with bai Bai (Mudarabah)
Bithamin
Ajil, Ijara, Bai Joint Venture
Salam (Musharakah)

46. Health Deteriorating Stages of the HIV/AIDS
patient
Detection Revelation Recovering
Complication Death

47. Integrated Operational Model
Reversible Mechanism and
Micro- (CD4 500+) Stage 1 Disposal of Self-Insurance
Equity
Assets
(CD500 to 300- ) Stage 2
Disposal of Productive
Microcredit Assets
(CD4 50-)Stage 3
Stage
Charity Destitution
Death
1) Stages of Financing 2) Stages of Health Deteriorations 3) Stages of Adapting Strategies

48. Organizational structure
Retailing
Production
Stock
Job Station HIV/
AIDS
Microfinance
Microfinance Screening
Institution HIV/
Microcredit Mechanism
AIDS
Charity
Rehabilitation
HIV/
Centre Individual AIDS
Enterprise
Household

49. Fundamental Issues
Due to fungibility of financing , Conceptual Approach and
Methodological Approach should encompass three level of
analysis:
1) the Individual
2) the Enterprise and
3) the Household
Standardizing a new criteria to measure up the poverty line of the
HIV/AIDS patients
Based on the Income and Expenditure levels
Economic Portfolio of the Household with HIV/AIDS Patients of Malaysia
Family Based Lending method
Organizational Structure
Shariah Compliance Regulatory and
Management

50. Impact of Income and Expenditure Effects on Household
Consumption Expenditure (Gayle Martin)
Household
consumption drop in h/h expenditure
expenditure
h/h falling below poverty line
h/h falling deeper
below poverty line
Poverty
line
Q1 Q2 Q3 Q4 Q5
Households divided into 5 income quintiles

51. Borrower Issues
Four basic issues are determined such as
Identification, Measurement, Monitoring and Controlling (BNM
2007)
Identification
Borrower’s profile (Armendariz and Morduch , 2007)
Who is the HIV/AIDS Patient (drug user, Brothel goer, sex –
worker, transmitted from husband/wife/ mother etc)
Current Stage of the Disease
Destituteness/ Economic condition
Expertise / Entrepreneurial Skills (determination of the scope of
investment)
Economic Activeness
Family Status (Whether any other member of the family can
participate in Islamic Microfinance or Crediting scheme)
Track Record (Morals/ Credit Background)

52. Borrower Issues(Con…)
Measurement
Ex-Ante and Ex-Post
Ex-Ante
Size of the Capital (Ehsan and Blake, 2008)
Profit and Loss Sharing Ration (Variations
based on Project and Profit) (Bacha,1997)
Ex-Post
Linear relationship between project and
profit (Rickwood and Muride, 2000)

53. Borrower Issues(Con…)
Monitoring
Ex-Post Hazard
(Iqbal and LIewellyn (2002)
Asymmetric information
Superior information may lead a party to go against the
interest of another
The agent may conceal the profit level
Usages of Loan (Beatriz Armendariz and Jonathan Morduch
(2007)
(Khalil, Rickwood and Murinde 2002)
Overconsumption of prerequisites by the Mudarib
Under reporting profit, risk avoidance and shirking of effort
by the Mudarib
Amoral entrepreneur may grasp higher profit margin than the
agreed ratio(Ahmed 2002)

54. Borrower Issues(Con…)
Controlling
Discretionary power
Monitoring and contractual governance
(Rickwood and Muride 2000)
long term involvement with the project and
higher risk exposure (Obidullah, 2007)
Organizational Control

55. Organizational Issues
Risk Management
Money Lending, Risk Taking, Risk Sharing, Risk
leveraging
Regulatory Framework
Reinvestment of firm’s surplus growth
(Aggarwal and Yousef, 2000)
Code of Behavioral Conduct of the Islamic
Financial Institute with the Destitute Patients
Financial contract with a patient
Loan Transformation to charity

56. Other Issues: Non-Muslim Borrowers
Non-
Usages of Islamic Financial tools with non-
Muslim Borrower
Code of Ethics
Code of Behavioral Conduct
Shariah Compliance Investment Policy

57. Industry based Business model
Model 1: Cleaning Item (Retailing)
Model 2: Fabrication (Production)
Model 3: Stock Holder (Profit Sharing)

58. Conclusion
Existing Microfinance organizations like Amanah Ikhtiar
Malaysia (AIM) can cater a specific package for the
HIV/AIDS households
The potentials of AIM
Large in size and Capital (easy to economize the operating
expenses)
Operating all over Malaysia
Higher access to poor and pro-poor
Long experience of Microfinance
Initiated certain Islamic Microfinance tool (Qard-al-Hassan)
Trusted brand

59. Thank You