The problems faced by Malaysian micro enterprises in accessing external finance: an empirical study

The role of micro enterprises on the national economy in any country cannot be underestimated. Successful micro enterprises become the primary engines of economic development, income growth, and poverty reduction in much of the developing world. Despite these recognized importance micro enterprises have hardly considerable financing assistance particularly from external source. This study is designed to empirically determine to what extent the micro enterprises in Malaysia are facing the problem of accessing external finance. The primary data is collected from the administered survey questions in Klang Valley (Selangor and Kuala Lumpur) and the analysis is conducted using descriptive and cross tabulation analysis. It outlines an approach on how micro enterprises perceive the constraint of financial access emerges as the binding constraint. The findings revealed that the financial institutions are imposing strict collateral requirement, high cost of financing, strict documentation requirement and, good financial and business track recor