Sustainable Development of Women Micro-Entrepreneurs in Malaysia: Factors Affecting Adoption of Rotating Savings and Credit Association (ROSCA)

Abstract

Rotating savings and credit association (ROSCA) is a form of micro-credit scheme that enables the low-income group to have access to financial services. There is an increasing need for ROSCA especially by women micro-entrepreneurs since this group would normally face difficulties in obtaining financing from the banking institutions. ROSCA can be a sustainable financing tool for the women micro-entrepreneurs in sustaining their business as it enables the available resources to be used efficiently and responsibly. This study applies a qualitative analysis through in-depth interviews with 10 women involving in micro-enterprises that adopted the concept of ROSCA in Eastern regions of Malaysia, namely the Kelantan and Terengganu states. The results showed that ROSCA has enabled the women micro-entrepreneurs to resolve the issues relating to financial shortage in capital while doing business. The women micro-entrepreneurs are found to use ROSCA as an alternative to ensure a sustainable funding for their business, thus increasing financial inclusion in the economy. Keywords-ROSCA; Sustainable development; Women micro-entrepreneurs I. INTRODUCTION According to the UNDP (2014), an entrepreneur can be defined as a person who is alone or with one or two more partners starting or inheriting a business eager to take financial, administrative, social risks and responsibilities, and participating dayto-day management activities. In many countries, women participation in entrepreneurship is showing encouraging growth. Women entrepreneurship development is important in enhancing the economy (Hossain et al., 2009; Nasima and Alam, 2015), and it also increase the financial inclusion in the country. In the USA, for example, women represent around 38 percent of business owners, whereby in Louisana, more businesses are owned by women who stayed longer in business and contributed to the economic growth in USA (Mahajar and Mohd Yunus, 2013). In many countries in the Southeast Asia, in particular, women are dominating the micro-business activities and contributing positively to the family income and living standard. Even in the context of Islamic history, the involvement of women in business can be traced back during the Prophet Muhammad (PBUH) time where his wife was a good example of a successful businesswoman (Azmi et al., 2014). Furthermore, in the Holy Quran, verses An-Nisa; 24 and An-Nalh; 97 also support women to be involved in business if do not exceed the Islamic principles. Generally, women entrepreneurs can be defined as those women who start, own, operate, manage and take risk in their business (Thuaibah et al., 2007). Consequently, women entrepreneurship has become one of the prime topics among the policy-makers in the developing countries since 1980s (Hossain et al., 2009). In Nigeria, women's active participation in micro-enterprises such as agriculture, bakery and retailing has empowered them economically and enabled them to contribute significantly to overall economic development (Balagun, Bustaman and Johari, 2014). Eve...

The Role of Islamic Microfinance Institution in Women Micro-Entrepreneurs Sustainability during Covid-19 in Johor

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Evolvement of ROSCA to real property acquisition as a form of interest-free SBF model: a PRISMA-compliant systematic review

“…Studies related to characteristics of ROSCA are comprised of trust and reputation (Ntamazeze, 2014;Imami et al, 2020), sustainability of ROSCA (Guha and Gupta, 2005;Basu, 2011;Azman and Kassim, 2019), time preferences and commitment devices, success factors of stokvels or ROSCA (Bonan et al, 2019), characteristics of formal and informal ROSCA (Callier, 1990;Besley and Levenson, 1996;Schreiner and Nagarajan, 1997;Reito and Spagano, 2014), characteristics and role of ROSCA (Cope and Kurtz, 1980;Fernando, 1986;Jerome, 1991;Aredo, 2004;Kedir et al, 2011;Ngcobo and Chisasa, 2018;Amankwah et al, 2019), reasons of joining ROSCAs (Peterlechner, 2009;Kahyaoglu et al, 2016), individual self-commitment (Gugerty, 2007), and preference between ROSCAs and ASCRAs (Buijs, 1998;Hoque and Khalily, 2002).…”

“…rotating credit association-that was first introduced by Geertz in 1962 in his academic paper: "The Rotating Credit Association: a 'Middle Rung' in Development". As mentioned in Table 2, this study only included articles published primarily in a journal; however, there were five (05) conference proceedings (Kedir, 2005;Wei and Lijuan, 2011;Ntamazeze, 2014;Al-Ajlouni, 2019;Azman and Kassim, 2019) and four (04) working papers (Klonner, 2003;Kedir et al, 2011;Yu, 2013;Bousalam and Hamzaoui, 2015) included in the dataset. Books or book chapters or reviews were excluded from this study.…”