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24
Jun
2014

THE IMPORTANCE OF MONITORING AND ENTREPRENEURSHIP CONCEPT AS FUTURE DIRECTION OF MICROFINANCE: ANALYSIS AND FINDINGS

THE IMPORTANCE OF MONITORING AND ENTREPRENEURSHIP CONCEPT AS FUTURE DIRECTION OF MICROFINANCE: ANALYSIS AND FINDINGSTable 3 shows the respondents’ personal profile. Majority of respondents are women (70.4 percent) and the remaining 29.6 percent are men. Gender inequality among the selected respondents is purely due to the nature of the programs where women were given priority as in the case of AIM and YBK Selangor. Majority of the respondents are married (91.3 percent). Based on the level of education, majority of the respondents reached secondary school. The results of the current study coincide with an empirical study by World Bank that concludes that most micro-entrepreneurs have a low level education. Most of the respondents have a number of dependents between 4 to 6 persons (60.5 percent) and 7 to 9 persons (20.4 percent). Most of the participants also did not have any business experiences (53.1 percent). Majority of respondents have income below the poverty line prior to joining the program (63.0 percent). The study also found that most of the respondents have working experience of less than 4 years (32.3 percent) while 25.8 percent of respondents have working experience between 8 to 11 years. In addition, most respondents have working experience in agricultural industries (23.8 percent). All findings for this descriptive statistics fulfill the criteria of microfinance program participants’ selection.

In terms of classification of business, Table 4 shows that most of the participants are involved in ‘permanent stall’ (25.8 percent), ‘services’ (20.4 percent) and ‘food and beverages production’ (24.7 percent). The results show that most of LZS and YBK participants are involved with small scale business activities with low skills and technology level, that is, ‘permanent stall’ (LZS 30.6 percent and YBK 40.6 percent) and ‘mobile stall and night market’ (LZS 26.5 percent). The characteristics of such business will affect the amount of participants’ business income. In terms of business location, most respondents conduct their business at their residential areas or own land (49.3 percent) and ‘rented space’ (16.8 percent). The location of microenterprise close to the residences will definitely affect the amount of microenterprise income. This is simply because of the fact that most of their customers will consist of their own neighbors who also have low level of income and purchasing power.
A majority of participants started their business with a capital less than RM3,000 (59.9 percent) and between RM3,001 to RM6,000 (17.9 percent). Based on the results, small amounts of start- up capital limit the poor participants’ ability to expand their microenterprise operations. However, low educational level, lack of working experiences and skills limit MFIs from providing a bigger amount of capital assistant to the poor participants. Most respondents also have a short business period of 4 to 6 years (33.2 percent) and 7 to 9 years (38.3 percent). The findings of this study show that most microenterprises are still in the growth stage of the business life cycle. Therefore, more capital is required to grow their businesses at the initial stage of the business life cycle. Efforts to increase working capital and decrease the dependency from microfinance program, and the ability to create sustainable and continuous revenues are highly important. However, during the early stages, capital assistance from microfinance program is very important to finance the poor microenterprise.

Table 3: Respondents Personal Profile

Respondent TEKUN(N=134) AIM(N=180) LZS(N=49) YBK(N=32) Control(N=51) Overall(N=446)
Profile Total % Total % Total % Total % Total % Total %
Gender 134 100 180 100 49 100 32 100 51 100 446 100
Male 74 55.2 0 0 28 57.1 6 18.8 24 47.1 132 29.6
Female 60 44.8 180 100 21 42.9 26 81.2 27 52.9 314 70.4
Age (min) 43 42 44 43 41 42
21-30 years 6 4.5 15 8.3 1 2.0 0 0 5 9.8 27 6.1
31-40 years 45 33.6 58 32.2 17 34.7 13 40.6 23 45.1 156 35.0
41-50 years 60 44.8 86 47.8 21 42.9 15 46.9 18 35.3 200 44.8
51-60 years 23 17.2 20 11.1 8 16.3 4 12.5 4 7.8 59 13.2
>61 years 0 0 1 0.6 2 4.1 0 0 1 2.0 4 0.9
Maritial Status 134 100 180 100 49 100 32 100 51 100 446 100
Married 122 91.0 178 98.9 43 87.8 19 59.4 45 88.2 407 91.3
Single 10 7.5 0 0 1 2.0 0 0 5 9.8 16 3.6
Single Mother 2 1.5 2 1.1 5 10.2 13 40.6 1 2.0 23 5.2
Education level 134 100 180 100 49 100 32 100 51 100 446 100
Primary School 18 13.4 45 25.0 16 32.7 21 65.6 5 9.8 105 23.5
SRP/PMR 21 15.7 59 32.8 17 34.7 10 31.3 16 31.4 123 27.6
SPM 67 50.0 66 36.7 16 32.7 1 3.1 23 45.1 173 38.8
STPM 12 9.0 7 3.9 0 0 0 0 3 5.9 22 4.9
Technical Cert. 4 3.0 3 1.7 0 0 0 0 1 2.0 8 1.8
> Diploma 12 9.0 0 0 0 0 0 0 3 5.9 15 3.4
N of Dependents 134 100 180 100 49 100 32 100 51 100 446 100
1-3 persons 30 22.4 21 11.7 5 10.2 2 6.3 23 45.1 81 18.2
4-6 persons 81 60.4 116 64.4 29 59.2 19 59.4 25 49.0 270 60.5
7-9 persons 23 17.2 40 22.2 15 30.6 10 31.3 3 5.9 91 20.4
>10 persons 0 0 3 1.7 0 0 1 3.1 0 0 4 0.9
BusinessKnowledge 134 100 180 100 49 100 32 100 51 100 446 100
Yes 69 51.5 82 45.6 22 44.9 11 34.4 25 49.0 209 46.9
No 65 48.5 98 54.4 27 55.1 21 65.6 26 51.0 237 53.1
Class of Income before involve with the program 134 100 180 100 49 100 32 100 51 100 446 100
< RM700 52 38.8 127 70.6 44 89.8 32 100 26 51 281 63.0
RM701 -RM1,400 82 61.2 53 29.4 5 10.2 0 0 25 49 165 37.0
>RM 1,401 0 0 0 0 0 0 0 0 0 0 0 0
WorkingExperience (min) 9 6 7 9 7 7
<4 years 25 18.7 83 46.1 15 30.6 3 9.4 18 35.3 144 32.3
4-7 years 28 20.9 48 26.7 11 22.4 9 28.1 7 13.7 103 23.1
8-11 years 43 32.1 23 12.8 14 28.6 14 43.8 21 41.2 115 25.8
>11 years 38 28.4 26 14.4 9 18.4 6 18.8 5 9.8 84 18.8
WorkingExperience 134 100 180 100 49 100 32 100 51 100 446 100
No Experience 17 12.7 49 27.2 7 14.3 1 3.1 7 13.7 81 18.2
Mgmt, Admin, Finance 36 26.9 10 5.6 1 2.0 0 0 11 21.6 58 13.0
Industrial 9 6.7 57 31.7 8 16.3 5 15.6 14 27.5 93 20.9
Algriculture 36 26.9 22 12.2 17 34.7 19 59.4 12 23.5 106 23.8
Business 18 13.4 36 20.0 10 20.4 1 3.1 5 9.8 70 15.7
Others 18 13.4 6 3.3 6 12.2 6 18.8 2 3.9 38 8.5

Table 4: Microenterprise Profile

RespondentProfile TEKUN(N=134) AIM(N=180) LZS(N=49) YBK(N=32) Control(N=51) Overall(N=446)
Total % Total % Total % Total % Total % Total %
BusinessClassification 134 100 180 100 49 100 32 100 51 100 446 100
Food andbeveragesproduction 29 21.6 51 28.3 11 22.4 11 34.4 8 15.7 110 24.7
Other production 3 2.2 7 3.9 0 0 2 6.3 0 0 12 2.7
Permanent stall 30 22.4 43 23.9 15 30.6 13 40.6 14 27.5 115 25.8
Mobile Stall and night market 20 14.9 16 8.9 13 26.5 0 0 7 13.7 56 12.6
Services 32 23.9 38 21.1 5 10.2 5 15.6 11 21.6 91 20.4
Algriculture 10 7.5 13 7.2 5 10.2 1 3.1 3 5.9 32 7.2
Permanent shop 6 4.5 9 5.0 0 0 0 0 6 11.8 21 4.7
Others 4 3.0 3 1.7 0 0 0 0 2 3.9 9 2.0
Business Location 134 100 180 100 49 100 32 100 51 100 446 100
Own residence or own land 55 41.0 101 56.1 18 36.7 28 87.5 18 35.3 220 49.3
Rented shop or stall 48 35.8 13 7.2 5 10.2 0 0 16 31.4 82 18.4
Purchased shop or stall 4 3.0 0 0 0 0 0 0 5 9.8 9 2.0
Rented space 23 17.2 31 17.2 13 26.5 0 0 8 15.7 75 16.8
Own residence/ own land and rented space 4 3.0 35 19.4 4 8.2 4 12.5 4 7.8 51 11.4
Stall/shop/free business space 0 0 0 0 9 18.4 0 0 0 0 9 2.0
Initial Capital (min) 10845 2837 4020 3600 1097 6227
Up to RM3,000 36 26.8 158 87.8 35 71.4 12 37.5 26 51.0 267 59.9
RM3,001-RM6,000 36 26.9 13 7.2 10 20.4 16 50.0 5 9.8 80 17.9
RM6,001-RM9,000 11 8.2 4 2.2 0 0 4 12.5 4 7.8 23 5.2
RM9,001-RM12,000 20 14.9 2 1.1 1 2.0 0 0 3 5.9 26 5.8
More than RM12,000 31 23.1 3 1.7 3 6.1 0 0 13 25.5 50 11.2
Business Period 134 100 180 100 49 100 32 100 51 100 446 100
< 3 years 4 3.0 9 5.0 3 6.1 2 6.3 1 2.0 19 4.3
4 years – 6 years 32 23.9 42 23.3 21 42.9 21 65.6 32 62.7 148 33.2
7 years – 9 years 62 46.3 66 36.7 22 44.9 9 28.1 12 23.5 171 38.3
10 years – 12 years 31 23.1 46 25.6 3 6.1 0 0 6 11.8 86 19.3
> 13 years 5 3.7 17 9.4 0 0 0 0 0 0 22 4.9

Table 3 shows the respondents’ personal profile. Majority of respondents are women (70.4 percent) and the remaining 29.6 percent are men. Gender inequality among the selected respondents is purely due to the nature of the programs where women were given priority as in the case of AIM and YBK Selangor. Majority of the respondents are married (91.3 percent). Based on the level of education, majority of the respondents reached secondary school. The results of the current study coincide with an empirical study by World Bank that concludes that most micro-entrepreneurs have a low level education. Most of the respondents have a number of dependents between 4 to 6 persons (60.5 percent) and 7 to 9 persons (20.4 percent). Most of

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Kevin J. Brandon

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