A Review of Financing Issues Among Microenterprises in Malaysia

Muridan, Mazliana; Ibrahim, Patmawati

doi:10.1166/asl.2018.11677

Cited by 4 publications

(5 citation statements)

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“…On the one hand, crowdfunding is a viable alternative fund for micro-entrepreneurs. This group has experienced several obstacles in obtaining funds, particularly from mainstream financial institutions (Muridan and Ibrahim, 2016). Alternative funds are crucially needed to save businesses because of the lockdown imposed by the government to combat the spread of COVID-19.…”

Section: Introductionmentioning

confidence: 99%

The applicability of Islamic crowdfunding as an alternative funding for micro-entrepreneurs in Malaysia

Ishak,

Mohammad Nasir

2023

QRFM

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Purpose The purpose of this study is to analyse potential models of Islamic crowdfunding as an alternative financing option for micro-entrepreneurs in Malaysia. While crowdfunding has gained traction as an alternative funding source for businesses, it is unclear how far this concept can benefit a group of micro-entrepreneurs in Malaysia. Design/methodology/approach This study uses a qualitative research approach by using data collected through semi-structured interviews with several experts and practitioners in crowdfunding, Shariah and entrepreneurship. Prior to discussing the facets of the findings, the data were analysed based on a thematic approach. Findings The findings reveal that while previous works of related literature suggest crowdfunding as a viable alternative financing option for entrepreneurs and their businesses, in reality, its practical implementation presents challenges. Numerous micro-entrepreneurs need more training in the areas of management and marketing. Such concerns raise questions about their ability to attract potential project backers. With the proper selection of Shariah contracts and several approaches to risk management, Islamic crowdfunding can potentially become an alternative funding source for microbusinesses. Research limitations/implications Given the exploratory nature of this study regarding the applicability of Islamic crowdfunding as an alternative fund for micro-entrepreneurs, its findings may not fully encompass Malaysia’s context because of the limited number of participants involved. Practical implications The findings of this study offer guidelines on how to implement Islamic crowdfunding for micro-entrepreneurs. Consequently, Islamic crowdfunding has the potential to alleviate the government’s burden of providing funds for micro-enterprises and enhance their skills and mentality to be more independent, creative and able to promote their products. Social implications While Islamic crowdfunding can be an alternative opportunity for business enterprises and community-based projects, it promotes the spirit of cooperation and collaboration within society. Originality/value Although Islamic crowdfunding is a topic that has been discussed previously, empirical investigations in this area remain scarce, mainly through qualitative approaches. Distinguishing from prior literature, this study analyses several potential models of Islamic crowdfunding from the perspectives of experts, practitioners and related agencies for micro-entrepreneurs. Moreover, this study bridges insights from related literature so that they offer practical applications to support micro-entrepreneurs in Malaysia.

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Section: Introductionmentioning

confidence: 99%

The applicability of Islamic crowdfunding as an alternative funding for micro-entrepreneurs in Malaysia

Ishak,

Mohammad Nasir

2023

QRFM

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“…Most micro enterprises used internally generated fund as source of financing their businesses and external source is hard to find which may cause their failures [ 33 ]. However in Malaysia, according to Muridan and Ibrahim [ 57 ], 33% of small and 51.7% of medium enterprises had used external financing from microfinance institutions compared to only 17.4% for micro enterprises. Moreover, 50% rural MEs stopped their operation in the beginning for 3 to 5 years and the rate of start-up level of such enterprises also decreased [ 57 ].…”

Section: Introductionmentioning

confidence: 99%

Microfinance towards micro-enterprises development in rural Malaysia through digital finance

Jalil¹

2021

Discov Sustain

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Microfinance is critical for the development of micro-enterprises and alleviating poverty. However, micro-enterprises are able to get microfinance services, they would face a variety of obstacles, due to the misunderstandings among many stakeholders, microfinance has not acquired widespread acceptance. Therefore, the purpose of this study is to investigate microfinance's impact on the sustainable development of Malaysia’s rural micro-enterprises. Besides, digital finance is integrated into the conceptual model to further investigate their mediating impact. Data was collected from 563 rural micro-enterprises using structured questionnaires, which were then statistically analyzed using AMOS-21. The findings of the study reveal that microfinance has a positive substantial influence on rural micro-enterprises development. Moreover, digital finance partially mediates the relationship. Thus, the study concludes that microfinance institutions are needed to adopt digital finance to enhance micro enterprises’ productivity through low transaction costs. The findings of the study can be useful to policymakers in the micro-enterprise sector who have a long-term vision and expect the sector to develop steadily. The study also provides scope and space for future academics and scholars to conduct further research.

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“…Microcredit is a common source of financing for 'unbankable' people (Muridan & Ibrahim, 2016). Microcredit enables underprivileged individuals to become self-sufficient through entrepreneurial activities.…”

Section: Introductionmentioning

confidence: 99%

Determinants of Small and Medium Enterprises’ Choice of Microcredit Provider: A Multinomial Logit Approach

Ruslan¹,

Gan²,

Hu³

2021

IJARBSS

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A Review of Financing Issues Among Microenterprises in Malaysia

Cited by 4 publications

References 0 publications

The applicability of Islamic crowdfunding as an alternative funding for micro-entrepreneurs in Malaysia

The applicability of Islamic crowdfunding as an alternative funding for micro-entrepreneurs in Malaysia

Microfinance towards micro-enterprises development in rural Malaysia through digital finance

Determinants of Small and Medium Enterprises’ Choice of Microcredit Provider: A Multinomial Logit Approach

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