SMEs Financing Issues in Malaysia: Youth Entrepreneurs Perspective

Abstract

Introduction Youth unemployment is regarded as a major issue worldwide including Malaysia. The youth unemployment rate in Malaysia is three times higher than the total population. Unemployment rate among youth can have negative effects on the economy and social landscape if not curbed. It is widely accepted that entrepreneurship is capable to reduce unemployment as well as stimulate economic growth. Youth entrepreneurship may generate employment opportunities for youth, raise income for them and alleviate poverty (Chigunta, 2002). Hence, youth entrepreneurs have been known to play an important role in the process of economic development and guarantee sustainable growth (Sitoula, 2015). Recently, Malaysian government has launched the National Entrepreneurship Policy 2030 (NEP2030) and the Shared Prosperity Vision 2030 (SPV2030) where among the main objectives is to encourage the development of youth entrepreneurs in Malaysia. The government of Malaysia has placed serious emphasis on the development of youth entrepreneurs and considers it a key element in positively contributing to the country's gross domestic product (GDP). The Malaysian government has always provided support to youth entrepreneurs including assisting them in terms of financing, physical infrastructure, and business advisory support through the establishment of various agencies like, the Malaysian Global Innovation and Creativity Centre (MaGIC) and the Graduate Entrepreneurship Fund which were initiated by the government to expand the development of youth entrepreneurs in Malaysia (Nor, Masdek and Maidin 2015). Despite the importance of youth entrepreneurs in the national economy and the considerable support from the government, the results are rather disappointing when the impacts of these extensive support systems are found to be insignificant. This is evidenced by a survey conducted by Khazanah Research Institute (2018) where only 8% of young job seekers are selfemployed. The Graduates Tracer Study (2018) conducted by the Ministry of Higher Education (MoHE) found that there is a total of 170,105 graduates and only 6.5% are self-employed. According to Ridzwan et al., (2017), there are 107,306 cases of bankruptcies among entrepreneurs in Malaysia from January to April 2015, where 948 of them are youth. Furthermore,

Behavioral Intention on Islamic Crowdfunding Usage among Malaysian Bumiputera SMEs: Moderating effect of technology readiness

“…Sukmana et al ( 2022) identified a significant positive social influence on the behavioral intention to use Islamic crowdfunding, with users being convinced by their peers to utilize an Islamic-based crowdfunding model for fulfilling religious needs. Conversely, Salim et al (2021) found no significant relationship between social influence and the intention to use Islamic crowdfunding in Malaysia. The novelty and lack of awareness regarding Islamic crowdfunding in the country, where the benefits of its usage have not been widely communicated or recognized by the media may be the reasons for this result.…”

“…This positive relationship can be attributed to the respondents' positive perception of the Islamic crowdfunding model, their knowledge of its underlying concepts and benefits, and their trust in the information provided by the online platform (Hapsari, 2022;Kazaure et al, 2020). Additionally, the end users believe that Islamic crowdfunding offers them direct access to investors and helps them avoid the bureaucracy of financial institutions (Salim et al, 2021). Opposing to the findings of Husin et al (2020), who state that the link between performance expectancy and perceived usefulness in relation to users' intention to utilize Islamic crowdfunding is not significant, it is argued that the effectiveness of the platform does not consume a direct effect on users' intention to adopt Islamic crowdfunding.…”

“…The concept of perceived usefulness, highlighted by Gangwar, Date, and Ramaswamy (2015), plays a critical role as users are only inclined to implement a technology if they observe it as beneficial in terms of efficiency, performance, and productivity for their business. Several studies, such as those conducted by Hapsari (2022) and Salim et al (2021), have indicated that performance expectancy/perceived usefulness has an impact on users' intention to use Islamic crowdfunding. This positive relationship can be attributed to the respondents' positive perception of the Islamic crowdfunding model, their knowledge of its underlying concepts and benefits, and their trust in the information provided by the online platform (Hapsari, 2022;Kazaure et al, 2020).…”

“…Rahman et al (2020) also found that entrepreneurs may be hesitant to share their business ideas online, but still agree that crowdfunding is easy to use when seeking capital. According to Hapsari et al (2022) and Salim et al (2021), research findings indicate that users' intention to utilize Islamic crowdfunding platforms can be influenced by their perception of the platforms' ease of use. Hapsari et al (2022) found that young respondents who were familiar with the internet and aware of Islamic crowdfunding found online crowdfunding systems easy to use.…”

“…Hapsari et al (2022) found that young respondents who were familiar with the internet and aware of Islamic crowdfunding found online crowdfunding systems easy to use. It has been established that users are willing to use Islamic crowdfunding platforms with user-friendly technology (Kazaure et al, 2020;Salim et al, 2021). There is currently limited research on the connection between effort expectation and behavioural intention of crowdfunding or Islamic crowdfunding.…”