[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/grg/02entp/v3y2012i1p1-25.html
   My bibliography  Save this article

The Importance Of Monitoring And Entrepreneurship Concept As Future Direction Of Microfinance In Malaysia: Case Study In The State Of Selangor

Author

Listed:
  • Hamdino Hamdan

    (Faculty of Business, Universiti Selangor (UNISEL))

  • Pazim @ Fadzim Othman

    (College of Law, Government and International Studies (COLGIS), Northern University of Malaysia (UUM))

  • Wan Sabri Wan Hussin

    (College of Polytech-MARA)

Abstract
The Economic Crisis of 1997-1998 that invaded the Asian region prompted the Malaysian Government to realize that the dependence on the labor-intensive and capital–intensive modes of production was insufficient to sustain the future economic growth. The future competitiveness of the Malaysian economy depends heavily on the knowledge-based characteristics where entrepreneurial aspects are considered more important for future economic growth and the alleviation of poverty. In support for the entrepreneurial activities among the poor, microfinance1 program is deemed important for the poor to start their business activities in the form of microenterprises. The integration of entrepreneurial concept and microenterprise into microfinance program also contributes towards increasing the effectiveness of the program. Basically, the microfinance program in Malaysia has been administered by various institutions and non-banking government agencies. The most important institutions for this study are Lembaga Zakat Selangor (LZS), Yayasan Basmi Kemiskinan (YBK) Selangor, Amanah Ikhtiar Malaysia (AIM) and Yayasan Tekun Nasional (TEKUN). However, it is doubtful whether this program has achieved its objective in enhancing the socio-economic level of the poor and contributing to the development of entrepreneurial activities. In addition, there have been very few studies to evaluate the importance of monitoring in enhancing the effectiveness of the microfinance program. Therefore, the focus of this study is to evaluate the effectiveness of YBK Selangor, AIM, TEKUN and LZS microfinance programs in increasing the participants’ business income by conducting microenterprise businesses through the adoption of entrepreneurial concept. Based on the univariate and multivariate analyses, the results show that AIM is the most effective microfinance program as it enables the poor to increase their business income and contributes to the development of entrepreneurial activities. Results of the study also show that monitoring, fund size, purpose of loan usage and total income before participating in the microfinance program, are the main factors which influence the level of income that poor people can generate. In addition, Islamic microfinance program which is based on Syariah and Islamic Finance concept has a very high potential in helping the poor to expand and diversify their economic activities, and increase their contribution towards development of entrepreneurial activities

Suggested Citation

  • Hamdino Hamdan & Pazim @ Fadzim Othman & Wan Sabri Wan Hussin, 2012. "The Importance Of Monitoring And Entrepreneurship Concept As Future Direction Of Microfinance In Malaysia: Case Study In The State Of Selangor," Journal of Global Entrepreneurship, Global Research Agency, vol. 3(1), pages 1-25, July.
    • Handle: RePEc:grg:02entp:v:3:y:2012:i:1:p:1-25
    as

    Download full text from publisher

    File URL: http://www.globalresearch.com.my/journal/entrepreneurship_v03n01/001_Article_001_JOGE_PG001-025.pdf
    Download Restriction: no
    File URL: http://www.globalresearch.com.my/journal/entrepreneurship_v03n01/entrepreneurship_v03n01.htm
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicola Meccheri & Gianluigi Pelloni, 2006. "Rural entrepreneurs and institutional assistance: an empirical study from mountainous Italy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 18(5), pages 371-392, September.
    2. Aderemi Ayinla Alarape, 2007. "Entrepreneurship programs, operational efficiency and growth of small businesses," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 1(3), pages 222-239, August.
    3. Paulson, Anna L. & Townsend, Robert, 2004. "Entrepreneurship and financial constraints in Thailand," Journal of Corporate Finance, Elsevier, vol. 10(2), pages 229-262, March.
    4. repec:ilo:ilowps:388076 is not listed on IDEAS
    5. repec:pri:rpdevs:morduch_microfinance_poor is not listed on IDEAS
    6. Rusdy Hartungi, 2007. "Understanding the success factors of micro‐finance institution in a developing country," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(6), pages 388-401, May.
    7. Wennekers, Sander & Thurik, Roy, 1999. "Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
    8. Ambreen Fatima, 2009. "Socio‐economic constraints to demand for borrowing among rural females of Pakistan," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(11), pages 1050-1070, September.
    9. John Conroy, 2005. "APEC and financial exclusion: missed opportunities for collective action?," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 12(1), pages 53-79, June.
    10. Vandenberg, Paul., 2006. "Poverty reduction through small enterprises : emerging consensus, unresolved issues and ILO activities," ILO Working Papers 993880763402676, International Labour Organization.
    11. Jonathan Morduch, 1998. "Does Microfinance Really Help the Poor? New Evidence from Flagship Programs in Bangladesh," Working Papers 198, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    12. Mohammed S. Chowdhury, 2007. "Overcoming entrepreneurship development constraints: the case of Bangladesh," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 1(3), pages 240-251, August.
    13. Li, Wenli, 2002. "Entrepreneurship and government subsidies: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(11), pages 1815-1844, September.
    14. Ahmed, Habib, 2002. "Financing Microenterprises: An Analytical Study Of Islamic Microfinance Institutions," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 9, pages 28-64.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Islam, Asadul & Nguyen, Chau & Smyth, Russell, 2015. "Does microfinance change informal lending in village economies? Evidence from Bangladesh," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 141-156.
    2. Asli Demirgüç-Kunt & Ross Levine, 2009. "Finance and Inequality: Theory and Evidence," Annual Review of Financial Economics, Annual Reviews, vol. 1(1), pages 287-318, November.
    3. Folorunsho M. Ajide & James T. Dada, 2023. "Poverty, entrepreneurship, and economic growth in Africa," Poverty & Public Policy, John Wiley & Sons, vol. 15(2), pages 199-226, June.
    4. Chun Jiang & Amei Feng & Chunhuan Xiao, 2021. "Does Capital Account Liberalization Spur Entrepreneurship: The Role of Financial Development," Sustainability, MDPI, vol. 13(16), pages 1-19, August.
    5. Miller, Paige & Brux, Jacqueline Murray & Neema, Clementia Murembe, 2016. "Microcredit in Uganda: Fundamental Reform or Just another Neoliberal Policy?," African Journal of Economic Review, African Journal of Economic Review, vol. 4(2), July.
    6. Jose Ernesto Amoros, 2009. "Entrepreneurship and Quality of Institutions: A Developing-Country Approach," WIDER Working Paper Series RP2009-07, World Institute for Development Economic Research (UNU-WIDER).
    7. Polbin, Andrey & Shumilov, Andrei, 2020. "Предпринимательство, Накопление Богатства И Ограничения Заимствования: Обзор Зарубежных Исследований [Entrepreneurship, wealth accumulation and borrowing constraints: Foreign research experience]," MPRA Paper 103675, University Library of Munich, Germany.
    8. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.
    9. Léon, Florian, 2019. "Long-term finance and entrepreneurship," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    10. Miranda-Reyna, Montserrat & Carrillo-Urbina, Gilberto Jaime, 2017. "Impacto de los indicadores financieros en el desempeño de las instituciones microfinancieras en México: un estudio de panel desbalanceado," eseconomía, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 12(46), pages 41-60, Primer se.
    11. Liu, Chen & Yang, Wei, 2023. "Does social insurance stimulate business creation? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    12. Francisco Buera, 2009. "A dynamic model of entrepreneurship with borrowing constraints: theory and evidence," Annals of Finance, Springer, vol. 5(3), pages 443-464, June.
    13. José Ernesto Amorós & Pekka Stenholm, 2013. "The Influence of the Quality of Government Institutions on Entrepreneurial Motivation: Exploring the Variance across Countries," Working Papers 1401, Departament Empresa, Universitat Autònoma de Barcelona, revised Dec 2013.
    14. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.
    15. Bashir, Rabia & Bajwa, Sami & Mamoon, Dawood, 2017. "Channeling Local Culture into Sustainable Microfinance Solutions by Akhuwat: From Borrowers to Donors," MPRA Paper 81591, University Library of Munich, Germany.
    16. William Kerr & Ramana Nanda, 2009. "Financing Constraints and Entrepreneurship," NBER Working Papers 15498, National Bureau of Economic Research, Inc.
    17. Guo‐Hua Cao & Jing Zhang, 2022. "The entrepreneurial ecosystem of inclusive finance and entrepreneurship: A theoretical and empirical test in China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1547-1568, January.
    18. Calza, Elisa & Goedhuys, Micheline, 2016. "Entrepreneurial heterogeneity and the design of entrepreneurship policies for economic growth and inclusive development," MERIT Working Papers 2016-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    19. Simeon D. Alder, 2016. "In the Wrong Hands: Complementarities, Resource Allocation, and TFP," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(1), pages 199-241, January.
    20. Isabel Grilo & Roy Thurik, 2008. "Determinants of entrepreneurial engagement levels in Europe and the US," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(6), pages 1113-1145, December.

    More about this item

    Keywords

    Microfinance; microenterprise; entrepreneurial concept; eradicating poverty; Islamic microfinance program;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:grg:02entp:v:3:y:2012:i:1:p:1-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: editor (email available below). General contact details of provider: http://www.globalresearch.com.my/journal.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.