Microcredit Programme and the Performance of Women-Owned Micro Enterprises in Malaysia

Introduction

Microcredit programs have emerged as a crucial tool for fostering entrepreneurship and economic empowerment, particularly among marginalized communities such as women-owned microenterprises. In Malaysia, the implementation of microcredit initiatives has played a significant role in addressing financial inclusion and promoting socio-economic development, with a specific focus on empowering women entrepreneurs. The micro and small enterprise sector comprises the majority (over 90 percent) of the number of business establishments in most countries and almost 80 percent of them are micro enterprises. The development of a strong and dynamic micro and micro enterprise sector is an important element in economic growth thus contributing to the achievement of various economic development goals of a country. In fact, the contribution of the sector in most countries is more significant than the role of large industries (Kotey & Meredith, 1997). However, the role of the micro and small enterprise sector depends on the level of position and development of the sector itself. In developed countries it is seen as more macro with the ability to be a catalyst for the export sector, technological development and the production of new products through the ability to generate innovation activities. While in developing countries it is more micro-based based on the role of the sector as a mechanism for poverty eradication, creating a more balanced development, reducing socio-economic gaps, providing job opportunities and meeting domestic needs.

In the planning of development activities related to the micro and small enterprise sector, the role of women should not be left aside. In developed countries the involvement of women in the enterprise sector is more significant than in developing countries. Although there are many studies showings the performance of female entrepreneurs is lower than that of men, but the role of women in the sector has shown a very positive development. Realizing the importance of women's involvement in the small and micro enterprise sector, policy makers in developing countries continue to make women's involvement an important agenda in the development of entrepreneurial activities. Various incentives are provided to encourage the participation of the concerned group in business. The success of Grameen Bank's microcredit program in Bangladesh is the best example of empowering women's involvement in the field of entrepreneurship. The main goal of implementing Grameen Bank's microcredit program is to address the problem of poverty through the involvement of women in entrepreneurial activities. In addition to providing credit products, most microcredit programs also offer support services (social development programs of entrepreneurship-monitoring and supervision) to improve the performance of the target groups. Studies by Tundui and Tundui (2020), Rosman and Mohd Rosli, (2013) and Arinaitwe (2006), Adriansah and Mubarok, (2023), Agbenyegah and Mahohoma, (2020), Mahmood and & Zahari, (2021), shows that, the microcredit program has had a great positive impact on the socio-economic improvement of those involved. At once, the microcredit program is seen as an important mechanism in encouraging women's participation in business activities (Rosman & Mohd Rosli, 2013). Until now it has become a model for the development of the micro enterprise sector around the world including in developed countries.