Examining the effectiveness of micro-enterprise development programs in Malaysia

Abstract

Abstract. Previous studies on socioeconomic development have examined the effect of development initiatives (i.e., access to finance and training) on several socioeconomic indicators (i.e., income, empowerment, asset, quality of life, employment). These studies have focused mostly on the outcomes of specific types of programs offered by specific development organizations. This study however focuses on informal women micro-entrepreneurs' participation in various development programs available to them and their influence on entrepreneurial competencies, human capital development, competitive advantages, economic vulnerability, supportive environment, and performance of micro-enterprises. This cross-sectional study adopted the purposive random sampling method and collected data from 384 informal women entrepreneurs from the local markets in different districts of Kelantan, Malaysia. The findings show that the development program participants have relatively higher levels of entrepreneurial competencies, human capital development, and higher levels of enterprise performance compared to non-participants. It is also noted that the level of economic vulnerability is relatively low among participants compared to non-participants. However, these findings contradict most of the earlier studies 293that show a significant positive impact of micro-credit on socio-economic wellbeing, as the difference in entrepreneurial competencies, human capital development, economic vulnerability, and performance of micro-enterprises among participants and non-participants in this study is not statistically significant. However, findings reported significantly higher levels of competitive advantages, and better supportive environment among the participants compared to the non-participants. Development organizations should therefore focus on expanding their outreach to spread the positive effects of their development programs towards uplifting the economic condition of low and middle-income households in Malaysia.

Entrepreneurial competency, competitive advantage and performance of informal women micro-entrepreneurs in Kelantan, Malaysia

“…Additionally, the researcher compared the varied financial approaches between Malaysia and Singapore, in which both offer loans, but the interest rates seem significantly higher in Malaysia (Dana, 1987a(Dana, , 1987b. Therefore, to improve the overall socioeconomic well-being among the low-income and poor households in Malaysia via sustainable economic progression, both government and nongovernment development organizations have emphasized on building a supportive environment to promote entrepreneurial activities at the grass-root level (Al Mamun et al, 2016;Zainol et al, 2017). For instance, potential entrepreneurs are offered many types of loans, training, advisory services and platforms for promotion.…”

“…They are also offered product and services through key development organizations/micro-development programs in Malaysia, such as Amanah Ikhtiar Malaysia, The National Savings Bank, The Department of Social Welfare, KEMUBU, Agricultural Development Authority, The Council of Trust for the Bumiputera and The National Entrepreneurial Group Economic Fund (Zainol et al, 2017). Furthermore, the Malaysian Government, together with development organizations, toward realizing the significance of micro-entrepreneurship, has embraced it as a means to enhance employment and economic development in Malaysia (Zainol et al, 2017). In fact, the Eleventh Malaysia Plan (2016Plan ( /2020 projects in becoming more citizen-centric with the focus on enhancing productivity and efficiency of the public service.…”

“…The Department of Statistics (2013), Malaysia reports that a total of 213,600 women had participated in the informal sector in 2013 and the number had increased from the previous year. The leading micro-enterprise development initiatives designed and offered by Amanah Ikhtiar Malaysia (a leading micro-finance institution that offers small loans to women from poor and/or low-income households for entrepreneurial activities) have focused on women micro-entrepreneurs in the attempt to incorporate women in income-generating activities in Malaysia (Al Mamun, 2014; Al Mamun and Mazumder, 2015; Al Mamun et al , 2016; Zainol et al , 2017). Furthermore, women, in general, share the care responsibilities, i.e.…”

“…They are also offered product and services through key development organizations/micro-development programs in Malaysia, such as Amanah Ikhtiar Malaysia, The National Savings Bank, The Department of Social Welfare, KEMUBU, Agricultural Development Authority, The Council of Trust for the Bumiputera and The National Entrepreneurial Group Economic Fund (Zainol et al , 2017). Furthermore, the Malaysian Government, together with development organizations, toward realizing the significance of micro-entrepreneurship, has embraced it as a means to enhance employment and economic development in Malaysia (Zainol et al , 2017). In fact, the Eleventh Malaysia Plan (2016/2020) projects in becoming more citizen-centric with the focus on enhancing productivity and efficiency of the public service.…”

Effect of entrepreneurial competencies on micro-enterprises income and assets in Malaysia

“…As the resources of any small business are limited, one of the ways that a micro-enterprise can be successful is the ability of an entrepreneur to leverage his/her own network, which can reduce the cost of operation (e.g. such as longer credit terms, discount or reasonable price of materials) and in the long term, hopefully, the assets accumulation (Zainol et al, 2017). Therefore, to study the relationship between relationship competency, a micro-enterprise income, and micro-enterprise assets in Peninsular Malaysia, the following hypotheses are developed:…”