A few months ago, I attended a masterclass on sustainability, where I had an insightful conversation that stuck with me.
After the session, I met a fellow attendee from Bank Islam Malaysia, who serves as the VP of Sadaqa House. As we spoke, he shared how Sadaqa House Microfinance works—channeling philanthropic funds into microfinance initiatives that empower underprivileged entrepreneurs. The way it blends Islamic finance, grants, and business mentorship to create a real, lasting impact was something I had never come across before.
That conversation sparked my curiosity, leading me to dive deeper into their work. And the more I explored, the more I realized the transformative power of finance when paired with purpose.
Digging into their initiatives, I came across the iTEKAD program, different microfinance models, and real-world impacts on entrepreneurs. The numbers, the structured approach, and the success stories all point to one thing—finance can be a force for good when done right.
When we think of financial empowerment, most people picture big loans, corporate financing, or investment deals. But what about the small entrepreneurs—the street food vendors, home-based tailors, or backyard vegetable farmers? For them, access to capital is often the biggest barrier. Traditional banks see them as too risky or “unbankable.”
This is where iTEKAD Microfinance comes in. A national Islamic social finance program initiated by Bank Negara Malaysia (BNM) in 2020, iTEKAD is designed to take entrepreneurs from being financially vulnerable to fully bankable—step by step. Supported by Bank Islam Malaysia and driven by Sadaqa House, the program blends grants, interest-free loans, Shariah-compliant financing, and structured business training to create sustainable growth.
What makes iTEKAD special isn’t just the money—it’s the journey.
It starts with the BangKIT Business Grant (BBG). Funded by zakat, this grant offers up to RM5,000 to asnaf (financially vulnerable) entrepreneurs. It’s seed money to buy equipment, raw materials, or set up a small shop—enough to get a micro-business off the ground.
Once entrepreneurs demonstrate commitment, they move to iTEKAD BangKIT Microfinance: an interest-free Qard Hasan loan of up to RM20,000. Now, they have the capital to expand operations without the burden of interest—ethical, compassionate, and practical.
Next is iTEKAD Maju Microfinance, where entrepreneurs can access up to RM50,000 through Tawarruq-based financing, a Shariah-compliant sale arrangement. At this stage, they are no longer “unbankable” but are still preparing for mainstream banking. This helps them hire staff, open shops, or explore digital business platforms.
Then comes the innovative iTEKAD Jaya, launched in 2024, which introduces a Mudarabah (profit-sharing) model. Sadaqa House acts as the investor, while the entrepreneur manages the business. Profits—and risks—are shared, creating a true partnership that reflects the ethical spirit of Islamic finance.
Finally, entrepreneurs graduate to SME financing, entering the commercial banking system fully prepared to compete, grow, and contribute to the economy.
What makes this model powerful is the structured, step-by-step approach: starting with grants, moving to interest-free loans, scaling through Shariah-compliant financing, innovating with profit-sharing, and finally transitioning to mainstream finance. It ensures no one is left behind while building confidence, skills, and long-term sustainability.
Training and mentoring are integral. In 2023 alone, iTEKAD conducted 49 training sessions on business strategy, financial literacy, and digital marketing, with a special focus on women entrepreneurs in collaboration with Yayasan Sultanah Bahiyah. Pre- and post-disbursement sessions helped hundreds of entrepreneurs prepare for and maximize the impact of funding.
The numbers speak for themselves:
- 190 asnaf micro-entrepreneurs assisted through the funding escalator, mobilizing RM1.34 million in grants.
- 177 iTEKAD BangKIT micro-entrepreneurs received RM3.13 million in blended finance.
- 90 iTEKAD Maju micro-entrepreneurs accessed RM2.07 million in financing.
- 155 micro-entrepreneurs achieved upward mobility, with 41 at Grade 1 and 114 at Grade 2.
Support extends beyond capital. Over 1,000 entrepreneurs have opened current accounts with Bank Islam, with active balances totaling RM4.57 million. Hundreds are using mobile banking and Al-Awfar investment accounts, connecting them to financial tools that help their businesses grow.
At its core, iTEKAD is more than microfinance—it’s a pathway of hope. It proves that even the most vulnerable entrepreneurs can transform into thriving business owners with the right mix of capital, mentorship, and structured support. For many, it’s the bridge between survival and success, poverty and prosperity.
Programs like iTEKAD remind us that finance doesn’t have to be cold numbers on a spreadsheet. It can be a vehicle for empowerment, creating long-lasting social impact and ethical, sustainable growth.
Maybe the world needs more iTEKADs.
👉 If you’d like the visual version, here’s the presentation link.
Check this to learn more about that.
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