Accessibility to microcredit by small- and medium-sized enterprises in Malaysia

Abstract

This study investigates the determinants of Malaysian SMEs’ accessibility to microcredit, because obtaining bank financing is not popular among small-scale enterprises. We employ logistic regression to analyze the key determinants of accessibility to microcredit among these SMEs. Using survey data on SMEs’ owners/managers in Terengganu, Malaysia in 2016, we find factors influencing microcredit accessibility include married, ethnicity, financial training, household income, age of enterprise, ownership, networking with non-governmental organizations, networking with microfinance institutions, networking with business associations, and distance of business premises to the nearest microcredit provider.