Financial Sustainable of Bumiputera SMEs: Food Processing Industry Perspectives

Abstract

This study investigates the factors affecting the financial sustainability of small and medium enterprises (SMEs) in the food processing industry in Selangor. The population of the study was obtained from the Unit Perancang Negeri (UPEN). A sample of 285 Bumiputera SMEs in the food processing industry in Selangor was selected from a population of 960 using simple random sampling method. A questionnaire was used for data collection. The reliability of the instrument was confirmed using Cronbach's alpha method. The questionnaire was found to be reliable with a reliability index of 0.917 for the dependent variable and 0.848, 0.790 and 0.603 for the independent variables measured in terms of access to finance, financial literacy and capital structure respectively. The data collected were analyzed using Statistical Package for Social Sciences (SPSS). The study revealed that access to finance, financial knowledge and capital structure influence financial sustainability of SMEs. The study found that the relationship between access to finance and financial sustainability is low; the relationship between financial knowledge and capital structure and financial sustainability is medium. The study ended with the analysis of SWOT and TOWS.