Determinants of Capital Structure in Small and Medium Enterprises in Malaysia: An Exploratory Factor Analysis

Nawi, Hafizah Mat; Zulkefle, Wan Nur Shawatul Aswal; Siong, Ong Hock

doi:10.6007/ijarbss/v12-i10/15117

Cited by 4 publications

(13 citation statements)

References 68 publications

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“…Credit history refers to the relationship between the micro-entrepreneur and the lender bank and non-bank lenders (Nawi, 2015). It is usually measured as the number of loans and services taken by the borrower and successfully repaid.…”

Section: Methodsmentioning

confidence: 99%

Disruptive financial innovations: the case of Nigerian micro-entrepreneurs

Adeosun

Shittu

Ugbede

2021

JBSED

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PurposeDespite the noticeable consequences of disruptive financial innovations, access to finance remains a major factor inhibiting the sustainable-growth potentials of young micro-entrepreneurs in informal settings. This study examines the determinants of financing options among micro-entrepreneurs in informal settings. Specifically, the study seeks to establish whether credit history, income, asset, gender, awareness and network capability have effects on formal and informal financing options among micro-entrepreneurs in informal settings.Design/methodology/approachThis article uses the survey research design and administers a structured questionnaire among 300 purposively selected micro-entrepreneurs within the University of Lagos, Nigeria. Only 291 completed questionnaires are retrieved. This article also uses the multiple regression analysis to estimate the empirical model and test the research hypotheses respectively.FindingsThis article establishes that: (1) credit history and assets-based financing are significant determinants of formal financing options among young micro-entrepreneurs in informal settings, (2) gender and network capability are significant determinants of informal financing options among young micro-entrepreneurs in informal settings and (3) awareness is significant of both formal and informal financing options among young micro-entrepreneurs in informal settings.Originality/valueThis article examines the determinants of financing option among young micro-entrepreneurs in informal settings. Specifically, the study seeks to establish whether credit history income asset gender awareness and network capability have effects on formal and informal financing options among micro-entrepreneurs in informal settings.

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Section: Methodsmentioning

confidence: 99%

Disruptive financial innovations: the case of Nigerian micro-entrepreneurs

Adeosun

Shittu

Ugbede

2021

JBSED

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“…Ramachandran and Yahmadi (2019) reported that lack of basic business knowledge, lack of market knowledge and information, lack of adequate finance, complicated procedures and delay in loan disbursement, limited network, experience, and expertise, reluctant to use modern technology limited SMEs access to finance. A research Nawi (2015) observed that most SMEs in Asia faced major challenges in accessing cheap finance where available ones offered by financial institutions have strenuous lending policies related to collateral and lack of information. Yoshino and Taghizadeh-Hesary (2018) said that SMEs in this region of the world face difficulty in accessing credit because of asymmetric information problems between suppliers and demanders of funds and the high transaction costs.…”

Section: Bank Loan Financing Policies and Smes Performancementioning

confidence: 99%

Effect of Bank Loan Financing Policies on Performance of Small and Medium Enterprises in Turkana County, Kenya

Lokopu,

Cherono,

Simiyu

2023

EJEFR

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Loans are considered to be the basic source of financing Small and Medium Enterprises in developing countries like Kenya. However, the majority of SMEs continues to face challenges in obtaining loan facilities resulting in poor performance and closures. Hence, the study investigated the effect of bank loan financing policies on the performance of SMEs in Turkana County, Kenya. The study was guided by two research questions: In what ways do collateral requirements affect the performance of small and medium sized enterprises in Turkana County, Kenya? And how does financial information affect the performance of small and medium sized enterprises in Turkana County, Kenya? The study was anchored on correlation research design and targeted a population of 2037 licensed SMEs from different sectors in Turkana County. Stratified and simple random sampling techniques were employed to select a sample of 334 SMEs. A questionnaire for SMEs was used as the instrument of data collection that collected data on the independent and dependent variables. The research instrument was tested for validity and reliability before being taken to the field. Analysis of data was done through the quantitative method. Analysis of data to answer the research questions was done by using descriptive statistics; frequencies, percentages, means, and standard deviation. Data analysed was presented in the form of frequencies and percentages, mean, and standard deviation. The research result showed that there existed a significant negative effect of collateral requirements ( and performance of SMEs. However, the second null hypothesis was accepted (p>0.05) because leading to the acceptance that there was no significant effect of financial information on the performance of SMEs. The study concludes that loan financial policies had a significant effect on the performance of SMEs in Turkana County. The study recommends that financial institutions need to revise their loan financing policies to make them attractive to SMEs as they have been found to be influencing their performance. JEL: L20; G21

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“…Our sample consisted mainly of respondents registered with Cradle Fund, MaGIC and TeAM which had a balanced ethnic distribution in their databases (Juri, 1999;Nawi, 2015;Noor & Leong, 2013). It is worth mentioning that some TSs were listed with Cradle, MaGIC and TeAM, which reduced the study ' s reach and overall sample.…”

Section: Questionnaire Surveymentioning

confidence: 99%

Financing Preference among Technology Startups (TSs) in Malaysia

Jamal

2023

Univers. J. Financ. Econ.

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As the maverick of the new economy TSs are making economic waves across industries. However at their early stages TSs are fragile and vulnerable. Startups struggle with many issues starting from business planning, capacity building and management, but financing is key to their survival and growth. Governments play pivotal role in financing TSs at their early stages and so do venture capital. This study measures financing and its’ correlation to culture, innovation, government financing and private investments (venture capital and angel investors). It also examines if Islamic Finance play any role in financing TSs. Findings show that innovation and government financing are significant in later stage financing and results indicate that venture capitalists and investors are more likely to finance female technopreneurs than their male counterpart. Despite high awareness levels among technopreneurs findings indicate that Islamic Finance is highly insignificant among TSs. This study is an important contribution in the startup and entrepreneurship space as it identify financing determinants for TSs in the Malaysian startup ecosystem. Further studies are recommended in the area of securitization of assets and intellectual property to enable to TSs to financing their venture via Sukuk or other forms of Islamic securities.

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Determinants of Capital Structure in Small and Medium Enterprises in Malaysia: An Exploratory Factor Analysis

Cited by 4 publications

References 68 publications

Disruptive financial innovations: the case of Nigerian micro-entrepreneurs

Disruptive financial innovations: the case of Nigerian micro-entrepreneurs

Effect of Bank Loan Financing Policies on Performance of Small and Medium Enterprises in Turkana County, Kenya

Financing Preference among Technology Startups (TSs) in Malaysia

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