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Abstract Undoubtedly, microenterprises play a critical role in the development of the economy. Comprising a dominant share in the industry, microenterprises help to alleviate poverty and unemployment. However, the growth of microenterprises remains a global challenge. A number of scholars have attributed the growth of microenterprises to accessibil...
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... (Hypothesis 1). The evidence is consistent with previous studies(Abdinur & Ondes, 2022;Alharbi, Yahya, & Ramadani, 2022;Angeles, Calara, & de Guzman, 2019;Kijkasiwat, Shahid, Hassan, & Hunjra, 2022;Sanni, Oke, & Alayande, 2020;Trianto, Barus, Sabiu, & Annisa, 2021).5.2. The Effect of Islamic Financial Literacy on Islamic Financial InclusionUnderstanding of the Islamic financial system's principles closely correlates with the level of inclusion. ...
This study examines how Islamic financial literacy and Islamic financial access contribute to the performance of Halal MSMEs using knowledge-based theory. Micro, small, and medium-sized halal businesses (MSMEs) have an important role in the economy and the rapid growth of the world halal industry. The success of halal MSMEs depends on a number of factors, including the availability of Islamic funding and the financial literacy of Islamic finance. This study adopted a hierarchical regression model to examine quantitative data from a sample of 209 halal MSMEs' owners and managers in Malang Raya, Indonesia. The findings demonstrate that a high level of Islamic financial literacy can encourage Islamic financial inclusion, while inclusive Islamic financial institutions have a significant impact on MSMEs’ performance. In promoting inclusive Islamic finance, this study contributes by describing how Islamic financial inclusion affects the performance of Halal MSMEs and the level of society's knowledge on Islamic finance. Implications: Once MSMEs have a strong understanding of the Islamic finance principles, they are more likely to use these resources to increase access to Islamic finance; thereby leading to business growth and expansion. For this study, the halal industry within the food and beverage sector is a noteworthy production sector.
... In developing countries where the informal sector activities represent 60% of the GDP (Musara and Nieuwenhuizen, 2020), micro-enterprises as the vast majority of firms (Simeon and Lara, 2005) are considered as engines of economic growth (Gherhes et al., 2016;Angeles et al., 2019). They can be digital businesses in various industries (Siqueira et al., 2016), mainly in the informal sector, where the majority of small firms in Senegal operate (Bah et al., 2017). ...
... However, digital micro-enterprises do not escape the challenges that limit microbusinesses' potential to move forward and increase income and employment (Angeles et al., 2019). The resource limitations in developing countries' informal sector along with skills scarcity, an insistent digital divide and a limited ICT infrastructure (Solomon and van Klyton, 2020) are among other things that may hinder their growth and development. ...
... Evidence from the literature supports the particular value of an entrepreneurially oriented strategy to small firms (e.g., Covin and Slevin, 1989;Mwaura et al., 2015) which may either look for economic sustenance (Jamak et al., 2017;Angeles et al., 2019) by preserving their sources of basic income or enter new markets to increase income (Nichter and Goldmark, 2005). This extensive literature on EO both at the individual and firm level is still ignoring digital microbusinesses, particularly those M. Top & Y. Zhi operating outside the boundaries of legal institutions of developing countries mainly in Africa. ...
This research examines the effects of individual entrepreneurial orientation (IEO) on informal sector digital micro-enterprise growth in developing countries and the moderating role of networking social capital. The majority of EO research on company growth has focused on registered traditional SMEs and larger enterprises in higher-income markets. A total of 248 informal online micro-enterprises from Senegal were studied. The findings show that IEO has distinct effects on informal digital microbusiness development. Individual risk-taking boosts digital micro-enterprise growth, whereas inventive behaviour hinders it. Proactiveness does not seem to increase growth. Different social capital’s moderating effects on IEO dimensions and online micro-enterprise growth are also found. This study is one of the first to examine individual entrepreneurial behaviour that may lead to the growth of informal digital micro-businesses and the differentiated role of SC. It has also expanded business contextualisation to better comprehend IEO in informal online micro-enterprises outside developed countries.
... Microbusinesses, which make up a significant fraction of the business sector, contribute to lowering unemployment and poverty rates in a particular nation. Even though there is still a global crisis and dilemma surrounding the desire to increase the number of microenterprises, some researchers have noted that this goal can be achieved by making one's business venture more approachable for the world of finance, making microfinancing to be equally important in the drive of owners to grow (Angeles et al., 2019). Evidently, in this 21st economic era, the existence of microenterprises worldwide still contributes significant parcel and role in feeding the nation-builders and small entrepreneurs. ...
Microenterprises as seabeds of a promising business tycoon, like how the world of entrepreneurship should be seen - call a lot of attention and cultivation. In 2002, the Philippine government passed a law granting incentives and benefits to registered microenterprises. However, since then, no thorough evaluation has been done to create a precise quantification and result. The study's purpose is to determine the effectiveness of Barangay Micro-business Enterprise Law on microenterprises and to use it as a global reference concerning the effectiveness of similar government law as practiced by the rest of the world. Descriptive-correlational method of research utilizing quantitative data was used that led to the conclusion that BMBE Law was generally effective to microenterprises with a weighted mean of 4.1769; this means that the law has been effective and useful to the beneficiaries making its two incentives (out of 5) very effective.
... The panel data regression analysis using both fixed and random effects models indicated a full mediating effect of the dividend policy in the relationship between stock price volatility and dividend yield as well as dividend payout ratio. Angeles et al. (2019) investigated microfinancing as a mediator in the relationship between access to finance and microenterprise success focusing on the 44 microbusinesses in the Philippines. The authors adopted a causal research design using a quantitative approach, and analyzed data pertaining to 582 microbusinesses that was sourced from a public database. ...
... For instance, Noghondari and Noghondari (2017) recorded a full mediation effect of financial leverage between ownership and firm performance. Further, Angeles et al. (2019) demonstrated a full mediation effect of microfinancing between access to funds and microenterprise growth. Moreover, the current study results indicate a positive relationship between financial capacity (liquidity and solvency) and financial performance, in line with the free cash flow theory put forth by Jensen (1986). ...
... A primary role of the governments regarding micro and small enterprise is to remove their obstructions towards establishment and growth (Prijadi et al., 2020). Studies determine that access to finance is a huge restriction on micro and small enterprise growth (Angeles et al., 2019;Beck et al., 2015;Fowowe, 2017). Access to finance is the potential of micro and small enterprises to make use of financial services like credit and saving. ...
... Micro loan and micro credit are being used homogenously by microfinance intuitions (Gyimah & Boachie, 2018).The borrower's character and cash flow determine the size of the loan.The borrower's cash-flow needs to be taken into consideration before giving a loan. The fact that most micro and small enterprises do not have access to financial markets, cause that their equity comprises of their own private funds or family funds and state subsidies (Angeles et al., 2019). Therefore, the size of loans, interest rate, repayment periods, and achieving scale all can be factors to the sustainability of micro and small enterprises. ...
... The microfinance experts are of the opinion that high repayment rates are needed in the absence of collateral and needed for the Microfinance Institutions to uphold these high repayment rates (Angeles et al., 2019;Nasir, 2013). The repayment starts off approximately immediately after the disbursement and then occurs on a weekly or monthly basis. ...
... The panel data regression analysis using both fixed and random effects models indicated a full mediating effect of the dividend policy in the relationship between stock price volatility and dividend yield as well as dividend payout ratio. Angeles et al. (2019) investigated microfinancing as a mediator in the relationship between access to finance and microenterprise success focusing on the 44 microbusinesses in the Philippines. The authors adopted a causal research design using a quantitative approach, and analyzed data pertaining to 582 microbusinesses that was sourced from a public database. ...
... For instance, Noghondari and Noghondari (2017) recorded a full mediation effect of financial leverage between ownership and firm performance. Further, Angeles et al. (2019) demonstrated a full mediation effect of microfinancing between access to funds and microenterprise growth. Moreover, the current study results indicate a positive relationship between financial capacity (liquidity and solvency) and financial performance, in line with the free cash flow theory put forth by Jensen (1986). ...
Small and medium scale enterprises (SMEs) are drivers of economic growth in developed and emerging economies like Uganda. Although they constitute a large proportion of businesses, the SMEs’ financial performance has been unstable over the years, and in extant literature this issue has been attributed to capital structure and other financing decisions. Empirical evidence indicates that more than 50% of SMEs in Uganda cease their operations within the first three years of operation, citing financial capacity issues such as inadequate liquidity. Hence, the aim of this work was to determine the mediating effect of financial capacity in the relationship between SME capital structure and financial performance. The study design was anchored in the agency, free cash flow, and stakeholder theories and the relevant data were gathered via a cross-sectional survey. A stratified sampling method was used to identify SMEs operating in the target area, and one respondent was purposively selected from every chosen SME. Although questionnaires were sent to 453 SMEs, only 423 valid questionnaires were obtained and were subjected to further analyses. Data were analyzed using descriptive statistics and multivariate analysis. The mediation test results indicate a partial but statistically significant mediation effect of financial capacity in the capital structure−financial performance relationship. We thus conclude that high levels of financial capacity strengthen the effect of capital structure on the financial performance of SMEs. Consequently, we recommend that SMEs maintain optimal levels of liquidity as well as financial solvency to optimize financial performance.
... Access to finance, which cannot mediate financial literacy and sustainability in MSME, shows that it is not a growth factor for micro-enterprises. Access to capital can be given to an owner, Still, the owner's attitude towards capital utilization may hurt growth (Angeles et al., 2019), and an increasingly tricky public access to finance will make business development inefficient in operational activities (Savitri et al., 2021). ...
Large-scale social restrictions (PSBB) during the pandemic, and the decline in people's purchasing power, caused problems for many MSMEs, with some even folding. The business actors must have the good financial literacy to manage funds and enhance business survival under challenging conditions. The research aims to examine the effect of financial literacy on business sustainability and access to finance as a mediating variable that strengthens the relationship between financial literacy and sustainability. It was conducted by taking MSME samples in the West Bandung Regency area using the probability sampling technique with cluster random sampling type. The data collected from the responses of 203 MSMEs was processed using the Path Analysis method with an error rate of 5%. These results showed that financial literacy affects sustainability, and access to finance cannot mediate the effect of financial literacy on sustainability.
... This situation does not allow for the employment of classical regression techniques like the Ordinary Least Squares (OLS), without estimation and interpretation problems (Maddala, 1983). Therefore, a binary model procedure relies on normal distribution assumptions, (Imelda et al., 2019). The binary Probit model emerges from the normal cumulative distribution function (CDF) and it is presented based on a rational choice perspective on behavior. ...
This study was focused on investigating the effect of solidarity financing on entrepreneurial activities in the North West and South West regions of Cameroon. The mission of solidarity finance is to use non-conventional financial tools to achieve sustainable and equitable development beside social integration. Its implications are seen in entrepreneurial performance measured by increase business revenue, profit, sales and societal contribution. The paper examines if entrepreneurs who adopt solidarity financing performed better than those who do not use it in the Northwest and Southwest regions of Cameroon. To achieve the objectives of the study, data was collected through survey questionnaire from a sample of 330 respondents and was analyzed using two stage Heckman selection model in order to correct the selection bias and yield unbiased estimates. The results showed that socio-economic factors of accessibility, cultural ties, marital status, age, residence, qualification, development perception services had positive and statistically significant effects on entrepreneurial performance. The coefficient of the inverse Mills ratio from Heckman result was statistically significant at 5%. These results provide evidence that the unobserved factors which lead to an increased probability of usage of solidarity financing have a positive impact on entrepreneurial growth. The government should therefore design policies for the formalization of the solidarity financing market.
... While previous research indicates that small businesses may have access to financing, there appears to be a reluctance among owners to employ external financing (Claessens 2006) [14] . Although small business owners assert that access to finance increases opportunities, the detrimental effect of borrowed capital from banks and nonbank sources hinders owners' motivation to progress (Angeles et al., 2019) [6] . Apparently, the behavior and attitude of micro and small businesses toward external finance are critical in the owner's growth incentive. ...
... While previous research indicates that small businesses may have access to financing, there appears to be a reluctance among owners to employ external financing (Claessens 2006) [14] . Although small business owners assert that access to finance increases opportunities, the detrimental effect of borrowed capital from banks and nonbank sources hinders owners' motivation to progress (Angeles et al., 2019) [6] . Apparently, the behavior and attitude of micro and small businesses toward external finance are critical in the owner's growth incentive. ...
... The effect of the financing is assumed to result from either the creditors' reluctance to extend a loan or the reluctance of the owners to borrow. While the government intends to level up microenterprises and small enterprises by providing flexible financing, owners' experiences in borrowing capital contradict the expectations that access to finance could support the growth of these enterprises (Angeles et al., 2019) [6] . ...
The importance of micro- and small enterprises in economic development has been acknowledged as a vital factor in the global economy. However, in spite of the dominance of micro and small enterprises in the industry, the stagnation of these small businesses has remained a source of contention in many countries. Access to finance is one important aspect in determining the growth motivation of micro-and small enterprise owners. Even though external finance may present an opportunity for expansion, it appears to have impeded the growth and upgrading of micro and small enterprises. The goal of this study is to determine whether the experiences in obtaining external financing had an impact on the growth motivation of the owners. A qualitative study was conducted to discover the factors that influence business owners' motivation to expand and upgrade the size of their business category. The study's findings has emerged the motivating drivers that influences the growth motivation of the owners. Based on the result of the study, access to finance rationalizes the stagnation and survival mentalities of micro and small business owners.
... La creación de estas empresas se basa en el uso de ahorros o préstamos informales, utilizando espacios de la propia vivienda o rentando espacios, de los cuales la mayoría nunca llegan a ser propietarios, este último dato, más allá de explicarse por una razón operativa, se fundamenta en la cultura financiera del empresario. Estudios empíricos demuestran que, para el segmento de microempresas, las principales barreras al crecimiento son el acceso a la financiación y la insuficiencia de capital, lo cual evita que este tipo de organizaciones alcancen su máximo potencial, dificultando las oportunidades de crecimiento (Angeles, Calara, y De Guzman, 2019); de tal manera, la falta de acceso y capacidades de manejo de recursos financieros se convierte en un reto (Ramírez-Urquidy, Mungaray y Guzmán, 2009), esto refiere a cuestiones que están más allá del conocimiento financiero, y usualmente son atribuidas al concepto de cultura financiera. ...
Resumen Este capítulo elabora una caracterización de la cultura financiera en microempresarios de la ciudad de Bogotá Distrito Capital, de Colombia, a partir de un análisis con enfoque sistémico. Para el mismo, fueron abordadas seis de las veinte localidades en que se encuentra dividido el territorio de esta ciudad, capital del país y del Departamento. Cabe destacar, de acuerdo con cifras de la Cámara de Comercio de Bogotá, entidad encarga-da del registro de los empresarios en la ciudad, a través del Observatorio de la región Bogotá-Cundinamarca, que en estas seis localidades se concentra 43% de las empresas activas registradas en esta ciudad. Con el propósito de efectuar un diagnóstico de los aspectos característicos de la cultu-ra financiera de los microempresarios ubicados en estas seis localidades de Bogotá D.C., Colombia, se adelantó la aplicación del instrumento desarrollado por la RELAyN, que una vez validado para el caso colombiano, permitió adelantar las correspondientes en-trevistas, combinando diversas estrategias de contacto y encuentro con los directores de las microempresas, en medio del entorno de pandemia que ha caracterizado al periodo 2020-2021. Luego de una descripción general sobre el origen, manejo y percepción del aspecto financiero, tanto a nivel personal como empresarial, y de la forma como se adelantó la relación del microempresario con el sistema financiero formal, el capítulo aborda elemen-tos relacionados con este ámbito, tales como el riesgo, las compras y el endeudamiento. Posteriormente se presentan las dimensiones definidas, con el fin de lograr un verdadero entendimiento sobre la cultura financiera microempresarial latinoamericana y orientar de forma adecuada este ámbito clave para el crecimiento, la productividad y la innovación, con que este tipo de negocios deben enfrentar los retos de un entorno con transformacio-nes continuas e inmediatas, propias del siglo xxi. Palabras clave: cultura financiera, microempresa, inclusión financiera, gestión financiera.
