Browsing by Author "Nur Hazirah Hamdan"

Micro-entrepreneurs have contributed significantly to the socio-economic development of low-income households, which ensures long-term economic prosperity. Despite this, financial constraints are one of the primary challenges micro-entrepreneurs face. Formal financial institutions regard them as a high-risk and high-cost market segment. Acknowledging their financial constraints, Islamic microfinance institutions, such as Amanah Ikhtiar Malaysia (AIM), are essential in providing the necessary financial assistance based on the Shari’ah concept for micro-entrepreneurs. As evident from a growing body of research, entrepreneurial success is also dependent on other entrepreneur resources such as social capital, human capital, and ICT usage. Thus, this study aimed to examine the effect of financial capital, social capital, human capital, and ICT usage on micro-entrepreneurs’ performance, focusing on Islamic microfinance institutions in Malaysia. This study also aimed to identify whether a geographical location moderated these factors that may influence micro-entrepreneurs’ performance. A total of 416 micro-entrepreneurs as clients of AIM were involved in this study who were selected from the states of Selangor and Pahang, representing urban and rural regions. The partial least squares – structural equation model (PLS-SEM) investigated the relationship among the variables. The study found that financial capital, social capital, human capital, and ICT usage significantly influenced the micro-entrepreneurs’ performance. The research model explained 38.2% of the substantial amount of variance in the performance of micro-entrepreneurs and a moderate level of predictive relevance. Geographical location only has a moderating effect on ICT usage and the micro-entrepreneurs’ performance. This study can provide a theoretical contribution to the extension of the resource-based view (RBV) as a fundamental theory in predicting performance, particularly in the context of micro-entrepreneurs in an Islamic microfinance institution. In terms of practical contribution, the findings of this study would be beneficial for Islamic microfinance institutions to develop a more effective action plan for achieving their objectives, such as improving infrastructure, increasing knowledge and awareness about ICT usage, and shifting business strategies to the digital economy. This study will also assist the Malaysian government in developing effective policies, infrastructure, and financial assistance for micro-entrepreneurs. Furthermore, this study can assist the government and microfinance institutions to identify the most appropriate techniques for micro-entrepreneurs based on their performance in urban and rural areas. This would reinstate Malaysia's economic viability and assist micro-entrepreneurs to better comprehend the critical elements that should be fostered to improve and maintain their performance. However, this study is limited to the selected respondents, specifically micro-entrepreneurs from AIM. Thus, future research could expand on a different set of data collection.