Does Microcredit Benefit Microbusinesses? Lessons from Microcredit

Agencies in Malaysia

AINON RAMLI1, ROSMAIZURA MOHD ZAIN2

1,2Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan,

City Campus, Pengkalan Chepa, 16100 Kota Bharu, Kelantan,

MALAYSIA

Abstract: - Microbusinesses are popular and profitable activities that help economic development and growth.

However, most microbusinesses are not sustainable due to borrowers’ main challenges such as limited loan

size, insufficient government support, lack of training, and high-interest loan rates. Limited studies have been

conducted on the business performance of microcredit borrowers in Kelantan. Therefore, this study investigated

the impacts of microcredit elements, namely loan size, management fees, tenure, mode of payment, and help

and support toward the microbusiness performance in Kota Bharu, Kelantan. This study employed a

quantitative research methodology by distributing a survey questionnaire to 300 borrowers from Amanah

Ikhtiar Malaysia and Tabung Ekonomi Kumpulan Usaha Niaga in Kota Bharu. Finally, 131 clean datasets were

used to run the correlation and regression analyses to identify relationships and significant impacts in the

datasets. The results revealed that the mode of payment has the least significant relationship with and did not

impact microbusiness performance. Loan size, management fees, and help and support positively and

significantly impact microbusiness performance. Conversely, tenure negatively but significantly affects

microbusiness performance. All the microcredit elements in this study explained 83.4% of microbusiness

performance.

Key-Words: - Microcredit; microbusiness performance; loan size; tenure; management fees; mode of payment;

help and support

Received: May 23, 2022. Revised: September 24, 2022. Accepted: October 25, 2022. Available online: November 24, 2022.

1 Introduction

The growth of microfinance (or microcredit)

institutions (MFIs) is encouraging in the 21st

century, especially in third-world countries. Various

studies have shown that microfinance successfully

creates healthier lives and helps people become

financially literate [1]. [2] commented that the idea

to develop MFIs was to provide financing access

facilities to Small and Medium Enterprises (SMEs),

particularly for those who do not have access to

commercial bank loans. Thus, microentrepreneurs

requiring capital to run and grow larger businesses

that are not eligible to receive loans from banks can

apply for MFIs. [3] reported that microcredit is a

money-lending program for low-income families to

be used as a business capital to generate income and

earnings to support self and family needs. It

involves offering small loans (microloans) to poor

borrowers who usually do not have collateral,

permanent employment, and verifiable credit

history. [4] indicate that microcredit covers low-

income individuals’ loans, savings, insurance,

transfer services, and various financial products.

This concept was established in Bangladesh in 1983

by the founder of Grameen Bank, Muhammad

Yunus. He developed the Grameen Bank to provide

microfinancing to the poor, who were primarily

women. The concept was widely recognized and

adopted by many countries [4]. The credit offered

improved the women’s economic status and

changed their lives. Since then, many organizations

have developed microbusiness programs, which

greatly help communities in developing countries.

[5] opined that microcredit provides microloans

to the poor to engage in various income-generating

activities and help overcome poverty. Microcredit

has been a tool used for society’s socioeconomic

development and poverty eradication [6]. Extensive

provision of financial services is believed to

accelerate economic growth by providing adequate

capital access and opening employment

opportunities to the poor [6]. According to [7], the

lack of access to financing is viewed as a common

problem that hinders microbusinesss’ growth. Thus,

microcredit improves low-income families’ current

living status and social development.

Microfinance was introduced in Malaysia in

1987 to provide financial access to the poorest in the

community and reduce income inequality [8].

Poverty and inequality in Malaysia are characterized

by income differences between rural and urban

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

236

Volume 20, 2023

populations, gender and ethnic and state groups.

Since 2006, in collaboration with Bank Negara, the

Malaysian government has encouraged more

financial institutions to provide microcredit products

to the public due to the importance of

microbusinesses in the country’s economic growth

[9]. Three important MFIs in Malaysia are AIM,

Yayasan Usaha Maju (YUM) and TEKUN [10]. All

three MFIs receive financial support from the

Malaysian government, but they differ in the year of

establishment, type of organization, loan scheme,

service area coverage, and borrowing targets [8],

[11].

The Ikhtiar Financing Scheme implemented by

AIM aims to reduce Malaysia’s poverty rate by

providing financing support to enable low-income

households to participate in viable economic

activities to enhance their economic status. This

scheme includes i-Mesra, i-Srikandi, and i-Wibawa.

In 2018, AIM provided financing worth RM 2.3

billion to 359,474 beneficiaries [12]. Since the

establishment of AIM, borrowers, also known as

“Sahabat,” were assisted through the existing

financing scheme, which amounted to 943,562

people. From January to April 2020, the total

financing for 29,586 people was RM 606.46 million

[13]. Furthermore, TEKUN Nasional, formerly

known as the TEKUN National Foundation, is an

agency under the Ministry of Entrepreneur

Development and Cooperatives established on the

9th of November, 1998. The establishment of

TEKUN aimed to easily and quickly provide

microcredit to native people (Bumiputera) to start

and further develop their businesses.

Microfinance has proven to be a useful

instrument to address the widespread poverty issues

in urban and rural areas [14]. It has been considered

a primary strategy in economic development

nationwide for the last decade. A study by [11] on

AIM, TEKUN, and YUM participants found that

microfinancial loan services can enhance the

participants’ economy as it helps them earn a higher

income and creates employment opportunities.

Moreover, microcredit is socially beneficial when

solving debt problems, improving household

wellbeing, and raising living standards.

Consequently, microcredit loan borrowers’ quality

of life could be improved.

However, the borrowers’ main challenges are the

limited loan size, lack of training, and high-interest

loan rates. In addition, the loan size provided by

Malaysian microinstitutions has also influenced the

performance of microbusinesses. This study aligns

with [15], who agree that a positive and significant

relationship exists between the achievement of SME

goals and total loans.

According to [16], insufficient capital prevents

businesses from growing. Microbusiness operators

need to cover capital equipment, raw materials, and

marketing costs. Therefore, the loan size is crucial

in expanding the size of the business market [17].

Few studies have been conducted to develop a

framework comprising microcredit elements and

microbusiness performance concerning the above

issues. Therefore, this study focused on the main

microcredit elements. This research specifically

aimed to investigate the impact of microcredit

elements on loan size, management fees, tenure,

mode of payment, and help and support toward the

microbusiness performance among the borrowers

from the AIM and TEKUN institutions in Kelantan,

Malaysia. In other words, the central aspect

investigated here is whether microcredit benefits the

borrowers. Indirectly, the study findings will show

how effective is the microcredit provided by those

institutions.

2 Literature Review and Hypothesis

Development

Microcredit has become a popular method of

involving low-income earners in financial markets

worldwide, enabling them to start small businesses.

With the introduction of microcredit, loans are more

easily obtained due to the exemption of conditions

for any guarantees or guarantors. Most SMEs in

Malaysia are microbusinesses, comprising 76.5% of

the total SMEs in Malaysia, while the remaining are

small (21.2%) and medium SMEs (2.3%).

Microbusinesses include hawkers, carpenters,

plumbers, machine shop operators, mechanics,

shoemakers and small farmers. Furthermore,

personal tailors, bakery owners and caterers can also

be categorized as microbusinesses [18]. Undeniably,

microbusinesses are gaining attention among key

players such as the World Bank, The United Nations

Capital Development Fund, governments,

nongovernmental organizations (NGOs), and private

entities [15].

2.1 Microbusiness Performance and

Microcredit Elements

Performance is a popular topic in business and

management because performance measurement is

essential for achieving organizational goals or

objectives [19]. Business performance is one of the

microbusiness goals to maximize profit and the

owner’s wealth [20]. Besides, business performance

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

237

Volume 20, 2023

indicates the organization’s ability to use the

available resources efficiently and effectively to

obtain optimal results [21]. In general, SMEs’

performance can be reflected in the financial aspects

of the business, such as costs, expenses, income,

revenue, profits, the value of assets held, and

savings. Previous literature divided performance

measures into financial and nonfinancial [22].

Several past studies were interested in microcredit

and business performance [17], [23], [24], [25]. [14]

showed that many microfinancial women

entrepreneurs successfully increased income,

savings, and asset ownership and protected

themselves and their families from financial

problems. Microcredit elements, such as repayment

methods and term loans, can also influence a

company’s performance [26]. Financial measures,

including cash flow, net income, working capital,

and account receivable and payable aging were

included in this study to measure microbusiness

performance. Several perspectives from the

literature on potential factors (microcredit elements)

affecting microbusiness performance are discussed

below.

2.2 Loan Size

Loans to micro and small businesses enable

entrepreneurs to grow their businesses and improve

their living standards by creating employment

opportunities to overcome income poverty [27]. The

flexible and appropriate loan amount provided to

microbusinesses can help them start a business

correctly and on time [17]. In line with [28]’s

findings, loan volume influences the positive

relationship between financing methods and SME

performance. [29] defended that loan amounts can

affect borrowers’ income. [30] also showed that

women entrepreneurs who successfully obtain

higher loans provide better education for their

children compared with women entrepreneurs with

smaller loans. [31] found that AIM credit has

contributed to economic growth among poor female

borrowers in Malaysia. The TEKUN Financing

Scheme provides small-business capital financing of

up to RM 100,000, while AIM provides up to RM

30,000. The present research aimed to explore how

the loan size affects microbusiness performance

among microcredit borrowers.

2.3 Management Fees

Setting interest rates and service charges is a

significant problem in designing microfinance

programs. Effective financial services pricing can

determine MFIs’ short and long-term success [32].

As interest rates rise, banks charge higher for

business loans. Thus, borrowers use more income to

pay off loan interest, which in turn reduces profits.

Higher interest rates increase the likelihood of loan

repayment failing. The borrower may decide to halt

a project or stop expanding the company at a high-

interest rate.

In contrast, low-interest loans can boost business

growth and increase profits [33]. [34] stated that

higher interest rates of MFIs may be caused by

increasing poverty or unexpected inflation growth.

Furthermore, company returns and profits can be

increased due to lower debt costs [35]. Malaysian

MFIs provide interest-free financing but charge the

borrower a service or management fee (ujrah).

Service or management fees are charged to cover

the process from loan application until full loan

settlement. AIM and TEKUN are interest-free but

practice management fees in their financing. [36]

supports this statement by highlighting that an AIM

loan is a free benefit based on Islamic principles.

AIM uses the concept of Qard Hassan (principal

amount) and ujrah (service fee) as management fees.

Entrepreneurs who borrow from TEKUN must pay

an annual management fee costing 4% of the loan

value during the loan period [37]. The borrower is

also encouraged to save 5% of the loan value each

year [26]. According to [38], the determination of

the total management charge by AIM is based on a

charge rate of 10% per annum on the amount of

financing applied for all financing schemes.

2.4 Tenure

The loan period is when the microbusiness must

repay MFIs [39]. Microbusinesses that have

microfinancing facilities with longer loan terms

increase the entrepreneurs’ business income. Longer

payment terms allow borrowers to pay lower

repayment amounts. Smaller repayment amounts in

turn help borrowers better manage cash flow,

earning more business income [39]. The loan period

provided is a crucial growth performance

determinant of microbusinesses. For example,

increasing the loan size is necessary to expand the

microbusinesses size. Adequate loan amounts and

financing information are provided to

microbusinesses to help them adequately start a

business [17]. According to [40], small businesses

get shorter loan periods than large companies

because large companies have an excellent track

record. Approximately 50% to 70% of new start-up

companies in the United Kingdom face failure, a

situation preventing lenders from considering long-

term loans [41]. According to [42] and [43], more

than 60% of Malaysian SMEs fail within five years

of operation. Consequently, it is essential to identify

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

238

Volume 20, 2023

the extent to which the loan period, whether short-

or long-term, affects the performance of

microbusinesses, particularly in Malaysia.

2.5 Mode of Payment

Microfinance plays a vital role as a practical

approach to reducing global poverty [44]. Loan

repayment is critical for microbusinesses and

microfinance institutions’ development [45].

Borrowers, particularly microbusinesses, that

receive financing from microcredit institutions are

expected to repay the loan in a fixed period, as

stated in the financing agreement after the

microcredit makes funds payment. Technically,

microcredit repayments are usually made

periodically, including management fees or interest

rates. [46] found that increasing income and sales

volume improve borrowers’ repayment

performance. This is because the borrower has

enough funds to finance the business by earning

more profit.

Furthermore, [47] pointed out that payment

schedules provide borrowers guidance in their

repayment process. Each microfinance institution

has a different payment schedule. According to [47],

Ghana’s microfinancial loan repayment schedule is

14 months. However, the payment schedule in

Malaysia is 6 months to 10 years for TEKUN,

whereas repayments are on a weekly, monthly, and

semiannual basis [48]. Conversely, AIM offers six

financing schemes, and the loans are to be repaid

weekly. For example, the financing value for the i-

Wibawa Scheme ranges from RM 5,000 to RM

15,000 with a 12- and 25-week repayment period

[49]. [50] argued that the borrower fails to repay

their loan when their business does not have enough

returns to cover the scheduled payment on the day

of payment. [51] and [52] agreed that loan

flexibility is critical in driving borrowers to benefit

and reduce financial stress. Thus, the effect of the

microcredit loan payment mode on microbusiness

performance is also examined in this study.

2.6 Help and Support

Most entrepreneurs face the main challenge when

starting a microbusiness, particularly access to

financial resources, especially for the poor. Most

microbusinesses obtain microloans for financial

assistance to support their business growth and

compete with larger businesses. [17] pointed out

that the expansion of microbusiness schemes in

Malaysia requires strong support from all agencies,

especially the government and MFIs, to ensure the

microbusinesses’ success. [53] stated that

government support comes in various forms:

financial and technical assistance, training

programs, expansion and consultation, information

resources and others. Entrepreneurs are expected to

be equipped with the knowledge and skills needed

to manage their business effectively to achieve

success through training programs. Practically,

MFIs in Malaysia, such as AIM and TEKUN, are

instrumental in providing financial assistance to

microbusinesses. Moreover, government agencies’

help and support, such as MFIs, provide microcredit

to microbusinesses to start and expand businesses.

In addition, some MFIs offer advisory services,

business location visits, guide business success such

as lectures, conduct workshops, and offer courses to

microbusinesses [54]. [55] found that most

microcredit borrowers do not have the technical

skills associated with their business. Due to the

limited knowledge and exposure, they are less aware

of the importance of continued business growth.

Therefore, AIM and TEKUN must critically instill

knowledge and education among

microentrepreneurs. In addition, microentrepreneurs

can also manage their loans better, including their

business and personal expenses, through knowledge

and education.

Table 1 shows the summary of microcredit or

financial elements to evaluate microbusiness

performance based on previous research. The

effectiveness of microcredit programs must be

evaluated by analyzing the effects of the loans on

the borrowers. Based on Table 1, the previous

studies made in the field of business performance

have been conducted in different study or scope

contexts.

Table 1. Summary of microcredit elements based on

previous studies

Loan

size

Management

fees

Tenure

Mode of

payment

Help

and

suppor

1.[17]

2.[2]

3.[25]

4.[27]

5.[28]

6.[30]

7.[37]

8.[39]

9[55]

[17] conducted a study in Malaysia to examine

how financial parameters (such as tenure, interest

rates, collateral, and manner of payment) affect

microbusinesses performance and determine if these

factors have a substantial impact on the return on

investment. However, their study focused only on

microfranchisees, and the findings on the impact

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

239

Volume 20, 2023

between four financial terms and microbusiness

performance were not discussed extensively. [2]

evaluated the business performance among micro-

and small enterprises (MSEs). MSEs under AIM

and TEKUN programs in the contexts of loan size,

cost of borrowing, mode of payment and self-

development program and advisory service.

According to their research, AIM had much higher

mean values for microcredit items (such as loan

disbursement amount, method of loan repayment,

monitoring of loan use, advisory services,

monitoring, and assessment of the business project,

staff cooperation, and the program’s overall impact

on small entrepreneurship) than TEKUN. In their

study, [2] also observed that TEKUN and AIM have

offered a variety of training programs, courses as

well as corporate and personal development

initiatives. The high degree of respondents’

satisfaction with the different program elements

included in this survey should not discourage

microcredit providers from making future changes

to their programs. However, their study did not

discuss in depth the impact of business performance

in the context of microcredit terms among MSEs.

A conceptual framework regarding the impact of

Malaysian MFIs’ welfare on their beneficiaries was

put forth by [37]. In their study, the term

“wellbeing” refers to the client’s home, the

performance of MSEs, and client empowerment,

whereas microfinance servers are defined as

nonfinancial, financial, and social services. To

expand the market and the growth of MSEs, for

instance, expanding the size of the granted loan is

crucial. The adaptability of loan disbursement,

which includes the conveniences of quick access to

services, timeliness, and offering sufficient

information regarding the terms of service, are

crucial factors in enhancing customers’ wellbeing.

Additionally, it is important to consider the

flexibility of the loan repayment policy, which

includes the loan grace period, loan repayment

duration, and interest rate, when assessing the

impact of microfinance services on clients’

wellbeing. However, the empirical evidence from

that study did not allow to measure the relationship

between the microfinance servers and wellbeing.

The impact of microfinance institutions on

Malaysian SMEs was examined by [39]. In their

study, the independent variables were the total loan

amount, client’s educational level, loan duration,

and business course, while the dependent variable

included the business income. According to the

regression analysis results, microfinancing

significantly affects the earnings of SMEs.

According to [39], additional microfinance

institutions will help provide numerous

microfinance facilities to SMEs. However, the

impact of microfinance on SMEs regarding

management costs was not covered in this study.

In conclusion, microcredit or financial terms

mostly related to business performance are loan

size, management fees, tenure, mode of payment,

and help and support. Many studies have

investigated the impact of microcredit terms on

business performance between MFIs and business

owners, particularly AIM, TEKUN and YUM.

However, research examining the impact of all

microcredit elements, as listed in Table 1, is lacking.

For example, [28] only measured loan size and help

and support; [27] investigated the loan size and

management fees; and [55] evaluated the mode of

payment and help and support. Therefore, the

studies conducted on microcredit and business

performance have overemphasized the effect of

microcredit alone and ignored other aspects. This

study differs significantly from other reports, where

the researchers investigated small-business

performance, in several respects. First, this paper

examines the impact of financial elements (loan

size, tenure, management fees, mode of payment,

and nonfinancial element [help and support], as

noted in Table 1) in the context of microbusiness

performance. This multifaceted microcredit measure

was chosen because it was thought that the

program’s overall structure would make it easier for

participants to boost their businesses’ performance.

Second, the target population of this study is

microbusinesses located in Kelantan, who are the

borrowers of microcredit loans from AIM and

TEKUN institutions. [56] estimated that Kelantan

had the lowest GDP per capita in Malaysia in 2020,

at RM 14,096. This study will support the MFIs

program and small entrepreneurs to improve their

standard of living toward contributing to GDP

growth. Third, there are still gaps in the research on

how well businesses operate after loan approval,

particularly in Malaysia’s Kelantan. Based on the

literature above, the following hypotheses are

suggested:

H1: The size of microcredit loans positively and

significantly affects the performance of

microbusinesses;

H2: Management fees charged by MFIs positively

and significantly affect the performance of

microbusinesses;

H3: Tenure of microcredit loans positively and

significantly affect microbusiness performance;

H4: Microcredit repayment modes positively and

significantly affect microbusiness performance;

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

240

Volume 20, 2023

H5: Help and support provided by microcredit

institutions positively and significantly affect

microbusiness performance.

3 Research Design

A quantitative analysis was used to investigate the

impact of microcredit elements among the

borrowers from AIM and TEKUN institutions in

Kelantan, Malaysia. Primary data were collected

through a survey using a closed-ended

questionnaire. Thus, a set of structured

questionnaires was distributed to the respondents

comprising AIM and TEKUN borrowers. These

questionnaires enabled the researchers to obtain

reliable and accurate information from a primary

data source.

The questionnaire involved three sections. The

content of Section A is about the demographic

profile of the respondent, i.e., gender, race, age, type

of business, level of education, number of business

years and microcredit characteristics; Section B

concerns the independent variables, i.e., size of the

loan, interest rate, mode of payment, tenure and help

and support; and the last section, Section C, related

to the dependent variable in this questionnaire, i.e.,

microbusiness performance. The measurement used

in this study was adapted from various established

sources (see [17], [28], [29], [30], [40], [45]).

Measurements of all items representing independent

and dependent variables were performed using a 5-

point Likert scale: 1 = “Strongly disagree,” 2 =

“Disagree,” 3 = “Neutral,” 4 = “Agree,” to 5 =

“Strongly agree.” The items examined how strongly

the respondents agreed or disagreed with the listed

statements [57]. Self-administered questionnaires

were distributed and collected by the researcher to

record the respondents’ responses. The owners of

the microbusinesses were visited by the researcher

to complete the questionnaires. The respondents

were informed that they could complete the

questionnaires and return them within one week.

One hundred and thirty-one respondents provided

their answers.

3.1 Population, Sample Size, Sampling

Technique and Data Analysis

The target population of this study is

microbusinesses located in Kelantan who applied

for microcredit from AIM and TEKUN institutions.

The AIM’s borrowers, known as “Sahabat,” are

about 42,232. According to the AIM website, AIM

branches in Kelantan can be categorized into three

major districts known as Kelantan Utara, Kelantan

Tengah, and Kelantan Selatan. There are 15 AIM

branches in this state, with five in each district. The

TEKUN borrowers, 938 in total, are known as

“Teman.” Therefore, the total population of AIM

and TEKUN borrowers in Kelantan is about 43,170.

This study chose the sample from AIM and

TEKUN borrowers in the Kota Bharu branch of

Kelantan Tengah. The AIM and TEKUN borrowers

in Kota Bharu were 2,930 and 32, respectively. A

large gap separates the numbers of borrowers

between AIM and TEKUN. AIM offers microcredit

for all types of microbusinesses. Conversely,

TEKUN offers microcredit only for

microagricultural activities. The study sample

included 300 borrowers, 268 from AIM and 32 from

TEKUN. Probability sampling was employed in this

study, i.e., basic random sampling technique. Thus,

the borrowers were selected by random selection or

random sampling. [58] states that with random

selection or sampling, individuals have an equal

probability of selection from the population, thus

guaranteeing a sample that represents the

population. Statistical Package for Social Science

(IBM SPSS) version 25 was employed to analyse

the primary data for this study. The statistical

technique included frequency analysis (Section A)

and reliability analysis and multiple regression

analysis (Sections B and C). Finally, 131 clean data

were used to run the correlation and regression

analyses to identify relationships and significant

impacts in the dataset.

4 Findings

Pilot tests were conducted to improve the survey

instruments. Existing problems can be identified,

corrected, or modified before the actual survey is

conducted by carrying out a pilot study [59].

Therefore, undertaking a pilot study is crucial to

ensure the content validity of an instrument and

advance questions, format, and scales [58]. [60]

stated that a pilot study seeks to evade problems that

arise from a research questionnaire caused by

contributors’ confusion over questions that may

accumulate through real research survey

implementation. It is created to identify uncertainty

in questions or whether the questions are prejudiced.

For pretesting, a small sample is used to guarantee

that replies are obtained in a similar fashion when

employing a larger scale sample [61]. In this study,

questionnaires were distributed randomly to five

microreaders. These traders were subsequently

removed from the study.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

241

Volume 20, 2023

4.1 Descriptive Analysis

The borrowers’ characteristics are shown in Table 2.

The study included a total of 150 respondents,

including 118 from AIM and 32 from TEKUN.

However, 19 questionnaires were not valid due to

incomplete and/or insufficient data for analysis.

Thus, only 131 responses were analyzed,

comprising 99 respondents from AIM (75.6%) and

32 from TEKUN (24.4%).

AIM offers a microcredit scheme for women-

owned businesses only, while TEKUN is for both

men and women. A strong reason could be the

imbalance between the number of men (7.6%) and

women (92.4%) borrowers. Most respondents were

50 years old and above (33.5%), followed by

younger respondents of 29–39 years (29.8%).

Young people below the age of 28 were the least

(13%) involved in microcredit. Regarding race,

Malays represented most (93.1%) borrowers

because the study was conducted in Kelantan, where

Malays make up 93.8% of the overall population.

On the other hand, the Chinese population in

Kelantan is only 3%. Thus, the Chinese

microborrowers represented only 6.9%.

Table 2. Characteristics of the respondents

Gender

Race

Male

7.6

Malay

122

93.1

Female

121

92.4

Chinese

6.9

Total

131

100

Total

131

100

Age

Type of Business

18 - 28

13.0

Product

61.8

29 - 39

29.8

Services

30.5

40 – 50

23.7

Agro

7.7

50 and above

33.5

Total

131

100

Total

131

100

Level of Education

No. of year in business

Primary school

7.6

< 1 year

3.8

SRP/PMR

(Secondary

school – Level 1)

21.4

1- <3 years

19.8

SPM (Secondary

school – Level 2)

56.5

3 - <5 years

24.5

Matriculation/ST

PM/Diploma

10.7

5 - <10

years

16.0

Bachelor degree

3.8

> 10 years

35.9

Total

131

100

Total

131

100

Most respondents involved in AIM and TEKUN

institutions completed their secondary school (Level

2) (56.5%), about 21.4% completed secondary

school (Level 1), and 14.5% have a diploma or

higher qualifications. A minority of the respondents

(7.6%) finished only primary school at 12. Most

respondents operated product-type businesses

(61.8%), followed by services (30.5%) and

agriculture (7.6%). TEKUN offers microcredit for

agriculture, whereas AIM only provides

microcredits for product and service types.

Lastly, Table 2 shows that most respondents

have been in the business for more than 10 years

(35.9%). This information indicates the operated

business’s maturity, and the business owners have

sufficient experience regarding the business they

run. Conversely, those who just started a business

(less than a year) accounted for only 3.8% of the

study respondents. Table 3 shows that most

respondents borrowed an average microcredit

amount worth RM 1,000–10,000 (70.2%).

Conversely, only one respondent (0.8%) obtained a

microcredit loan worth RM 30,000. This substantial

amount is difficult to obtain due to the strict

screening and evaluation conducted by these

microinstitutions. Lastly, most AIM borrowers are

likely to have a loan tenure of around 50 weeks or

one year (78.79% of the AIM respondents or 59.5%

of the overall respondents).

According to AIM borrowers, one-year loan

tenure is a reasonable timeframe. i.e., it is not too

long nor too short for them to pay the weekly

repayment amount; it is within their capabilities.

However, the TEKUN borrowers mostly choose

longer credit tenures of between one to five years

(84.38% of the TEKUN borrowers or 20.6% of the

overall respondents). Longer tenures are favored as

most of them take a more significant amount of

loans and are involved in the agriculture sector,

which needs a more extended period to generate

revenue from the crops.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

242

Volume 20, 2023

Table 3. Characteristics of microcredit

Amount of

Credit

Tenure of

Credit

RM 1,000 -

RM 10,000

70.2

25 weeks/6

months (AIM)

2.3

RM 10,001-

RM 30,000

29.0

35 weeks/9

months (AIM)

1.5

RM 30,001-

RM 50,000

0.8

50 weeks/<1 year

(AIM)

59.5

Total

131

100

1-5 years (AIM)

11.5

5-10 years (AIM)

0.8

25 weeks/6

months

(TEKUN)

0.8

35 weeks/9

months

(TEKUN)

3.1

1-5 years

(TEKUN)

20.6

Total

131

100

4.1.1 Test of Relationships

A correlation coefficient (r) analysis was used to

define the strength and direction of the relationship

between the variables. Table 4 shows that all

independent variables have positive and statistically

significant correlations with the microbusiness

performance dependent variable. Management fees

showed the highest result at 0.889, while the mode

of payment has the lowest correlation at 0.335.

Analyzing the correlation between each independent

variable is important because the value of the

relationship should not be more than 0.70 [62]. The

highest value is between tenure and loan size

(0.669). Thus, all the variables were retained.

The test of reliability and validity Cronbach’s

alpha coefficient (α) was used to measure internal

consistency or the scale’s reliability for data

collection. Table 5 shows that Cronbach’s alpha

values are above 0.70, indicating strong internal

consistency reliability for the scale used in this

study.

Table 4. Correlation coefficient (r)

Micro

Busine

Perfor

mance

Loan

Size

Manage

ment

Fees

Mode

Paym

ent

Ten

ure

Help

and

Sup

port

Micro

Business

Performanc

.519*

.889**

.335*

.42

6**

.393

Loan Size

.519**

.426**

.478*

.66

9**

.489

Manageme

nt Fees

.889**

.426*

.271*

.41

1**

.318

Mode of

Payment

.335**

.478*

.271**

.47

9**

.415

Tenure

.426**

.669*

.411**

.479*

.613*

Help and

Support

.393**

.489*

.318**

.415*

.613

Table 5. Cronbach’s Alpha

Variables

No. of

Items

Cronbach’s Alpha

Micro Business

Performance

0.835

Loan Size

0.882

Management Fees

0.769

Tenure

0.905

Mode of Payment

0.815

Help and Support

0.848

4.1.2 Hypotheses Testing

This study used multiple regressions to measure the

impact of microcredit elements on microbusiness

performance. Figure 1 presents the study results.

Fig. 1: Results of the hypotheses testing

***Significant at p-value < 0.01; **significant at p-

value < 0.05;*Significant at p-value < 0.10

Beta path coefficients originating from loan size

(H1), management fees (H2) and help and support

(H5) to business performance shows positive and

statistically significant (p = 0.01; H1: β = 0.262; t =

4.382; H2: β = 0.816; t = 19.982; H5: β = 0.165; t =

3.114). The coefficient between tenure (H3) and

business performance has a negative but statistically

significant correlation (p = 0.01). In terms of mode

of payment (H4), the construct’s coefficient with

business performance is positive but nonsignificant

(β = 0.038; t = 0.896). Overall, three constructs (H1,

H2, and H5) have positive and statistically

significant correlations. One construct (H3) revealed

a negative but statistically significant result.

Conversely, another construct (H4) has a positive

but nonsignificant association with impacting the

dependent variable of microbusiness performance.

In this study, all five constructs elucidated 83.4% of

the microbusiness performance, the nonfinancial

measure of business performance.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

243

Volume 20, 2023

5 Discussion

This study ran a survey among microbusinesses in

Kelantan, Malaysia, to discover the microcredit

elements that may impact their business

performance. The following five elements were

chosen based on previous studies: loan size,

management fees, tenure, mode of payment, and

help and support. The first element, loan size,

strongly relates to the dependent variable. It also

shows a positive and significant impact on business

performance. Microtraders need credit assistance

from microfinance institutions, including AIM and

TEKUN, to help them obtain funds for business

purposes, such as cash flow, increasing capital,

buying business assets, and others.

AIM and TEKUN place certain limits according

to the borrower’s repayment ability. They perceive

the loan size as essential and significant to their

business performance. By obtaining the required

loan amount according to their needs, the business

can operate smoothly without financial hurdles. This

finding is in line with previous studies [17], [28],

[29], [30], [31]. The findings of this study show that

almost 52% of the respondents run a microbusiness

for more than 5 years. They remain in

microbusiness for a long period of time. They

cannot increase their business category from micro

to small. The amount of loans requested by the

respondents (Table 3) tells the size of their business

when more than 70% only need microcredit of less

than RM 10,000.

Management fees show the strongest correlation

with and the most significant impact on business

performance. AIM and TEKUN do not charge loan

interest, as opposed to commercial banks.

Conversely, AIM and TEKUN charge management

fees. High management fees burden the borrowers

as they only run a microbusiness. These

management fees have to be paid using business

profits. Microtraders need to maximize profits to

remain in the market or grow their business.

However, microbusiness performance will face

obstacles if these agencies (e.g., AIM and TEKUN)

charge high and onerous management fees.

Therefore, the borrowers presume these

management fees are significant to their business

performance. Previous studies acknowledge the

significance of management fees or loan interest on

business performance [33], [34].

Tenure, which is the loan period for repayment

of a loan, positively correlates with medium strength

in business performance. However, tenure has a

negative but significant impact on business

performance. The details about the tenure in Table 3

show that TEKUN and AIM provided up to 5–10

years of tenure, respectively. Most borrowers chose

to have a 50-week tenure for AIM and 1–5 years for

TEKUN. The tenure of credit shows their ability to

repay, with almost 60% needing up to a year to clear

microcredit. With a limited daily income, a longer

payment period gives more room to use cash for

working capital, business expenses, personal

expenses, and microcredit repayments. With a

negative impact on business performance,

microcredit tenure indicates the burden borne by the

borrower. However, they need money from the loan.

Therefore, their tenure becomes a burden that

negatively impacts their business.

The mode of payment, the fourth element, has a

positive correlation and medium strength with

business performance. It also has a positive but

nonsignificant impact on business performance.

AIM and TEKUN borrowers must repay the loan

weekly according to the predetermined amount. The

repayment includes the loan amount and

management fees. The weekly payment burdens the

borrowers because the money earned from the

business cannot be used for working capital but is

instead used to repay the loan. A monthly method of

payment should be given to enable the borrowers to

use the loan money to increase sales and business

performance. Monthly payments are more practical

than weekly payments. According to the

information shared by the borrowers, they prioritize

savings to repay the loan. Once the amount is

sufficient, they are more at peace of mind and heart

to spend money for business or personal use. Their

weekly priority is to find money to repay the loan.

This situation is quite burdensome for borrowers

when they start a business using microcredit money.

They have to make immediate payments without

enough time and opportunity to roll the money from

the loan and income from sales. This situation was

also discussed by [50]. Thus, in this study, the mode

of payment is not significant to impact business

performance.

The last element, help and support, only has a

medium but positive relationship with business

performance. In this study, microcredit is financial

loan assistance from government agencies (AIM and

TEKUN), which is important for starting and

expanding microbusinesses. In addition to financial

aid, microbusinesses also need ongoing help and

support from the government and relevant agencies

or institutions to ensure survival in the market. Most

respondents finished school at a young age, i.e., 8%

primary school (12 years), 21% secondary school–

level 1 (15 years), and 57% secondary school–level

2 (17 years). At that young age, they do not have

sufficient and effective business and management

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

244

Volume 20, 2023

knowledge. Therefore, continuous support from the

government and related agencies is necessary to

improve the knowledge of respondents.

This study showed that help and support, such as

entrepreneurship training (including marketing,

financial management, social media for business,

practical packaging, customer service or effective

communication techniques), ongoing business

consultation and business location visits positively

and significantly impact microbusinesses. Overall,

in this current study, the microcredit elements

explain 83.4% of microbusiness performance.

6 Conclusions and Recommendations

This study tested the impact of five microcredit

elements on microbusiness performance. Three

factors, namely loan size, management fees, and

help and support, positively and significantly

influence microbusiness performance. Conversely,

the study found tenure to have a negative and

significant influence on business performance.

Finally, the mode of payment influences positively,

but non significantly, business performance.

Microcredit institutions, such as AIM and TEKUN,

can use this study’s findings to improve the

microcredit elements to ensure that the loan benefits

borrowers in business performance or sustainability.

According to the findings of the current study,

attention should be given to two factors, tenure and

mode of payment.

This study has limitations. First, it included

respondents from microcredit agencies AIM and

TEKUN only. A wider study that includes

respondents from other microcredit institutions,

such as MARA, SME Corp, etc., should be

considered to obtain better results. Second, the

respondents of this study were only from AIM and

TEKUN Kota Bharu, Kelantan. There are AIM and

TEKUN branches in other parts of Kelantan and

throughout Malaysia that can be included in future

studies. Third, this study also only examines five

elements of microcredit. Future studies might

uncover other elements in more detail. Finally, this

study uses simple regression. Future studies should

apply other statistical methods to conduct in-depth

empirical analyses.

Acknowledgement:

The authors are very thankful to all the associated

personnel in any reference that contributed to this

research.

References:

[1] Ariful, C.H., Atanu, D. & Ashiqur, R. 2017.

The Effectiveness of Micro-credit Programmes

Focusing on Household Income, Expenditure

and Savings: Evidence from Bangladesh.

Journal of Competitiveness, Vol. 9, No. 2, pp.

34-44.

[2] Olowe, F.T., Moradeyo, O.A. & Babalola, O.A.

2013. An empirical study of the impact of

microfinance banks on small and medium

enterprise growth in Nigeria. International

Journal of Academic Research in Economics

and Management Sciences, Vol.2, No.6, pp.

116-124.

[3] Microcredit Summit Campaign Report 2003.

https://www.findevgateway.org/sites/default/fil

es/publications/files/mfg-en-paper-state-of-the-

microcredit-summit-campaign-report-2003-

2003.pdf

[4] Suzuki, Y., Barai, M.K., Adhikary, B.K. &

Wanniarachchige, M.K. 2011. The Grameen

Bank "Empowering the Poor" Model of

Microcredit: An Institutional Comparison with

the Traditional Model of the Japanese Banking

System. The Journal of Comparative Asian

Development, Vol. 10, No.1, pp. 129-156.

[5] Bateman, M. & Dobrila, J. 2014. The Rise and

Fall of Muhammad Yunus and The Micro-

credit Model. Bateman – International

Development Studies - Working Paper #001,

January 2014.

[6] Husaini, A., Ahmad, S. & Samsudin, M.A.

2017. The Impact of Shariah Finance Micro

towards the Performance of the Micro Business

Entrepreneur: A Study of The Shariah

Cooperation of Baitul Qiradh Acheh Journal of

Contemporary Islamic Law, Vol. 2, No. 2, pp.

1-25.

[7] Choudhury, M. & Goswami, C. 2019. MSME

Financing Gaps – Review of Literature for the

Period 2005 to 2016. Journal of Small Business

and Entrepreneurship Development, Vol. 7,

No. 2, pp. 50-60.

[8] Revindo, M.D. & Gan, C. 2017. Chapter 3:

Microfinance Institutions in Malaysia, Micro-

finance in Asia, 47-91.

https://www.worldscientific.com/doi/abs/10.11

42/9789813147959_0003

[9] Loanstreet. 2018. Microfinance / Microcredit in

Malaysia. https://loanstreet.com.my/learning

centre/microfinance-microcredit-in-Malaysia.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

245

Volume 20, 2023

[10] Hj Kassim, S., Kassim, S.N. & Othman, N.

2019. Islamic Microfinance in Malaysia: Issues

and Challenges, Proceedings of the Second

International Conference on the Future of

ASEAN (ICoFA) 2017 - Volume 1, pp. 367-

378.

[11] Majid, A.A, Savarimuthu, A. & Geetha, C.

2017. Assessing Financial Returns on

Microloans from Economic, Social and

Environment Impact: A Case of Kota Kinabalu.

Proceedings of International Conference on

Economics 2017 (ICE 2017), pp. 1-23.

[12] SME Annual Report 2018/19.

https://www.smecorp.gov.my/images/SMEAR/

SMEAR2018_2019/final/english/SME%20AR

%20-%20English%20-

%20All%20Chapter%20Final%2024Jan2020.p

[13] Harian Metro. 2020.

https://www.hmetro.com.my/bisnes/2020/06/59

2233/aim-tidak-abai-sahabat

[14] Gebisa, D.A. & Dassa, A.R. 2019. The Roles

and Challenges of Micro Finance in Women

Empowerment: A Case Study in Oromia Credit

and Saving Institution in West Shoa Zone,

Ethiopia. International Journal of Small and

Medium Enterprises, Vol. 2, No. 2, pp. 14-19.

[15] Wanambisi, A.N. & Bwisa, H.M. 2013. Effects

of microfinance lending on business

performance: A survey of micro and small

enterprises in Kitale Municipality, Kenya.

International Journal of Academic Research in

Business and Social Sciences, Vol. 3, No. 7, pp.

56-67.

[16] Makokha, M. 2006. Gender and

entrepreneurship in Kenya: a comparative

analysis of male-female's start-up motivation,

individual characteristics and perceptions of

business success (Doctoral dissertation, PhD

thesis: University of Dar es Salaam).

[17] Chin, O. & Nor, M.M. 2016. Does The Micro

Financing Term Dictate The Performance of

Micro Enterprises?. Procedia Economics and

Finance, Vol. 35, pp. 281-286.

[18] SME Corp Malaysia. Guideline for SME

definition. 2020.

https://www.smecorp.gov.my/images/pdf/2021/

Guideline_on_SMEDefinition_Updated_Sept2

020_Final.pdf

[19] Yıldız, S., Baştürk, F. & Boz, I.T. 2014. The

Effect of Leadership and Innovativeness on

Business Performance. Procedia - Social and

Behavioral Sciences, Vol. 150, pp. 785-793.

[20] Waweru, C. & Ngugi, K. 2014. Influence of

Financial Management Practices on the

Performance of Micro and Small Enterprises in

Kenya. European Journal of Business

Management, Vol. 1, No. 11, pp. 1-20.

[21] Ramli, A. & Zain, R.M. 2019. The Impact of

Non-Financial Measurements in Market

Trader's Business Performance. International

Journal of Academic Research in Business and

Social Sciences, Vol. 9, No. 9, pp. 514–536.

[22] Ahmad, K. & Zabri, S.M. 2016. The effect of

Non-financial Performance Measurement

System on Firm Performance. International

Journal of Economics and Financial Issues,

Vol. 6, No.S6, pp. 50-54.

[23] Nawai, N & Shariff, M.N.M. 2010.

Determinants of Repayment Performance in

Microcredit Programs: A Review of Literature.

International Journal of Business and Social

Science, Vol. 1, No. 2, pp. 152-161.

[24] Mahmood, R & Mohamad, M.R. 2013.

Microcredit position in micro and small

enterprise performance: The Malaysian case.

Management Research Review, Vol. 36, No. 5,

pp. 436-453.

[25] Johansson, C & Pettersson, L. 2014. Micro-

credit Impact on Business Performance. A

Minor Field Study in El Salvador. Master

Thesis in Economics, International Business

and Economics Programme, Linköping

University, Sweden.

[26] Mokhtar, S.H., Nartea, G. & Gan, C. 2012.

Determinants of microcredit loans repayment

problem among microfinance borrowers in

Malaysia. International Journal of business

and social research, No. 2, Vol. 7, pp. 33-45.

[27] Kileka. M.M. 2014. A Research Report

Submitted in Partial / Fulfilment of the

Requirements for Award of the Degree of

Master of Science Accounting & Finance (MSc

A & F) at Mzumbe University, Tanzania.

[28] Hadi, F.S.A., Ahmad, M.A. & Borhan, J.T.

2013. Success Factors of Successful Micro-

credit Entrepreneurs: Empirical Evidence from

Malaysia. International Journal of Business

and Social Science, Vol. 4 No. 5, pp. 153-159.

[29] Uddin, H. & Barai, M.K. 2016. Islamic

Microcredit: The Case of Bangladesh. Journal

of Accounting, Finance and Economics, Vol. 6,

No. 1, pp. 49-64.

[30] Mahmood, S., Hussain, J. & Matlay, H.Z.

2014. Optimal microfinance loan size and

poverty reduction amongst female

entrepreneurs in Pakistan. Journal of Small

Business and Enterprise Development, Vol. 21

No. 2, pp. 231-249.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

246

Volume 20, 2023

[31] Haque, T., Siwar, C., Bhuiyan, A.B. & Joarder,

M.H.R. 2019. Contributions of Amanah Ikhtiar

Malaysia (AIM) microfinance to Economic

Empowerment (EE) of women borrowers in

Malaysia. Economics and Sociology, 12(4),

241-256. doi:10.14254/2071-789X.2019/12-

4/15.

[32] Ahmad, I. 2004. Current Situation of

Microfinance in Malaysia and its Issues. Kuala

Lumpur: Agriculture Bank of Malaysia.

https://banktani.tripod.com/microfinance.htm.

[33] Johnston, K. 2019. The Effect of Interest Rates

on Business.

https://smallbusiness.chron.com/effect-interest-

rates-business-69947.html

[34] Kazi, M.H. & Leonard, J.E. 2012.

Microfinance, Poverty and Youth

Unemployment of Nigeria: A Review. Global

Journal of Human Social Science, Sociology,

Economics & Political Science, Vol. 12, pp.

45-59.

[35] Kirimi, P. N., Simiyu, J. & Murithi, D. 2017.

Effect of Debt Finance on Financial

Performance of Savings and Credit Cooperative

Societies in Maara Sub-county, Tharaka Nithi

County, Kenya. International Journal of

Accounting, Finance and Risk Management,

Vol. 2, No. 3, pp. 113-130.

[36] Kadri, M.H. 2016. A Study of Selection of

Islamic Financing Product in Malaysia.

Regional Convention on Islamic Studies,

Melaka, pp. 1-8.

[37] Al-Shami, S.S.A., Majid, I.A., Hamid,

M.S.R.A. & Rashid, N.A. 2014. Conceptual

framework: The role of Malaysian

microfinance on the well-being of users'

services from the perspective of (AIM) and

(TEKUN). World Applied Sciences Journal,

Vol. 30, No. 30, pp. 382-394.

[38] Tahir, R,M., Yusuf, S.M. & Rahman, S.A.

2018. Commodity Murabahah Contract in

Microcredit Financing. International Journal of

Academic Research in Business and Social

Sciences, Vol. 8, No. 5, pp. 1022-1028.

[39] Pei-Wen, T, Zariyawati, M.A, Diana-Rose, F.

& Annuar, M.N. 2016. Impact of Microfinance

Facilities on Performance of Small Medium

Enterprises in Malaysia. World Applied

Sciences Journal, Vol. 34, No. 12, pp. 1845-

1849.

[40] Jamil, I.K., Zakaria, R.H. & Othman, A. 2019.

An Evaluation of Financing Without Collateral

to Small and Medium Enterprises in Malaysia:

A Conceptual Framework. Academic Journal

of Business and Social Sciences, Vol. 3, No. 1,

pp. 1-19.

[41] Yeoh, P. 2014. Implications of online funding

regulations for small businesses. Journal of

Financial Regulation and Compliance, Vol. 22,

pp. 349-364. doi:10.1108/JFRC-02-2014-0012

[42] Kee-luen, W., Thiam-yong, K. & Seng-fook, O.

2013. Strategic Planning and Business

Performance: A Study of SMEs in Malaysia

Proceedings of 3rd Asia-Pacific Business

Research Conference, (February).

[43] Deepa, M.V. & Annamalai, G. 2018. Internal

Factors For New Venture Growth In Malaysian

Manufacturing SMEs: An Empirical Study.

Taylor's Business Review, Vol. 7. No. 1, pp.

83-103.

[44] Greg, F. & Ghatak, M. 2010. Repayment

Frequency in Microfinance Contracts with

Present Biased Borrowers, Working Paper.

[45] Ssekiziyivu, B., Mwesigwa, R., Joseph, M. &

Nkote Nabeta, I. 2017. Credit Allocation, Risk

Management, and Loan Portfolio Performance

of MFIs - A Case of Ugandan Firms. Cogent

Business & Management, Vol. 4, pp. 1-

13.https://doi.org/10.1080/23311975.2017.137

4921

[46] Nawai, N. & Shariff, M.N.M. 2012. Factors

affecting repayment performance in

microfinance programs in Malaysia. Procedia -

Social and Behavioral Sciences, No. 62, pp.

806-811.

[47] Mensah, C., Raphael, G., Dorcas, O. &

Kwadwo, B.Y. 2013. The Relationship

between Loan Default and Repayment

Schedule in Microfinance Institutions in

Ghana: A Case Study of Sinapi Aba Trust.

Research Journal of Finance and Accounting,

Vol.4, No.19, pp. 165-176.

[50] Nawai, N. & Shariff, M.N.M. 2013.

Determinants of Repayment Performance in

Microfinance Programs in Malaysia. Labuan.

Bulletin of International Business & Finance,

11, 2013, 14 – 29.

[51] Field, E., Pande, R., Papp, J. & Park, Y.J. 2012.

Repayment Flexibility Can Reduce Financial

Stress: A Randomized Control Trial with

Microfinance Clients in India. PLoS ONE, Vol.

7, No. 9, e45679,

doi:10.1371/journal.pone.0045679.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

247

Volume 20, 2023

[48]

[49]

TEKUN Niaga Financing Scheme Conditions.

Available at

https://www.tekun.gov.my/en/tekun-

entrepreneur/tekun-nasional-financing-

scheme/conditions/ (assessed date: 7 March

2022)

Skim Pembiayaan Ikhtiar. Available at

https://www.aim.gov.my/skim_pembiayaan/sp

i (Accessed date: 10 March 2022)

[52] Czura, K., John, A. & Spantig, L. 2020.

Flexible Micro-credit: Effects on Loan

Repayment and Social Pressure. CESifo

Working Paper No. 8322, Available at:

https://ssrn.com/abstract=3618847

[53] Yusuf, A. 1995. Critical success factors for

small business: Perceptions of South Pacific

entrepreneurs. Journal of Small Business

Management, Vol. 33, pp. 68-73.

[54] Ramli, A. & Taib, M. 2017. Malaysian Malay

micro businesses: success factors in Langkawi

Island. Sci.Int, Vol. 29, No. 6, pp. 1191-1198.

[55] Mokhtar, S.H. 2011. Microfinance performance

in Malaysia (Doctoral dissertation, Lincoln

University).

[56] The Department of Statistics, Malaysia.

https://www.dosm.gov.my.

[57] Sekaran, U. 2003. Research Methods for

Business: A Skill-Building Approach. 4th

Edition, John Wiley & Sons, New York.

[58] Creswell, J.W. 2009. Research Design

Qualitative, Quantitative, and Mixed Methods

Approaches. 3rd Edition, CA Sage

Publications, Thousand Oaks.

[59] Gill, J. & Johnson, P. 1997. Research methods

for managers, Paul Chapman Publishing Ltd,

London.

[60] Sekaran U. & Bougie, R. 2010. Research

methods for business: A skill building

approaches. 5th edition, John Willey & Sons

Ltd, Chichester.

[61] Hair, J.F, Black, W.C., Babin, B.J., Anderson,

R.E. & Tatham, R.L. 2006. Multivariate data

analysis. 6th Edition, Prentice Hall

International, New Jersey.

[62] Pallant, J. 2010. SPSS survival manual A step

by step guide to data analysis using the SPSS

program. 4th Edition, McGraw Hill, New

York.

Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

-Ainon Ramli was responsible for the research

design, data collection, statistics and writing the

original draft.

-Rosmaizura Mohd Zain carried out the literature

review, review and editing of the article.

WSEAS TRANSACTIONS on BUSINESS and ECONOMICS

DOI: 10.37394/23207.2023.20.23

Ainon Ramli, Rosmaizura Mohd Zain

E-ISSN: 2224-2899

248

Volume 20, 2023

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

No funding was received for conducting this study.

Conflict of Interest

The authors have no conflicts of interest to declare

that are relevant to the content of this article.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.en

_US