Contemporary issues in financing micro enterprises in Malaysia: a qualitative inquiry from practitioners perspective = isu kontemporari dalam pembiayaan perusahaan mikro di Malaysia: siasatan kualitatif dari perspektif pengamal

• Main Authors: Mohamed Imtiyaz, Mohamed Noordeen, Abdul Razak, Dzuljastri, Kassim, Salina, Che Embi, Nor Azizan
• Format: Article
• Language: English
• Published: International Islamic University College Selangor 2022
• Subjects: HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/98860/7/98860_Contemporary%20issues%20in%20financing%20micro%20enterprises%20in%20Malaysia.pdf; http://irep.iium.edu.my/98860/; https://jmm.kuis.edu.my/index.php/jurnal/article/view/119/99
• Institution: Universiti Islam Antarabangsa Malaysia

Micro enterprises are considered as one of the important sections of the Malaysian economy. Micro enterprises play an important role in providing employment opportunities for the workforce of the nation and significantly contributes to the GDP of Malaysia. Despite being an important force in economy, micro enterprises experience several issues and challenges in accessing external finance. This study attempted to in depth explore of contemporary issues and challenges in financing micro enterprises from the perspective of micro financing institutions. The study carried out semi structured interviews with 06 practitioners from leading micro financing institutions in Malaysia. The outcomes of the interviews found that, incomplete documentation from applicants, lack of business ideas and plans, lack of business skills and passion, non-viable businesses and projects and mismanagement ofbusiness funds by borrowers are major challenges faced by micro financing institutions on providing financing for micro enterprises. The findings highlight the importance of risk management practices by micro finance institutions and providing necessary training for micro entrepreneurs to impart required business skills. The outcome of this study may enlighten commercial banks, development finance banks, micro financial institutions, and policy makers for their strategic planning activities in strengthening micro enterprises