Discouraged borrowers : evidence from Malaysian SMEs

Small and medium-sized enterprises (SMEs) contribute substantially to the nation’s economic growth. Loan from banks have been the most common form of financing among SMEs due to limited internal generated fund. However, obtaining financing from banks is mostly challenging to many SMEs. In Malaysia, there were bundles of bank loan facilities offered by many financial institutions. This fact is affirmed by the World Bank that Malaysia has been the top-ranked country to provide ease of obtaining credit for six consecutive years from 2008 to 2013. The aim of this study is to identify the characteristics of SMEs and other factors that discouraged them from applying bank loans. This study considers the borrowers (SMEs) perspective instead of the loan provider as cited by most literatures. A total of 1,425 self-administered questionnaires were distributed to a randomly selected sample of Malaysian SMEs registered with SME Corporations, covering all the four regions in West Malaysia. The number of usable questionnaires was 110 responses, yielding about 12.67 percent response rate. The discouraged borrower model in this study was tested using logistic regression analysis. The results indicate that size and age of the SMEs are significant predictors of SMEs being discouraged from applying for bank loan. Gender, experience and ethnicity of the owner/manager of the SMEs are also significantly related to their discouragement. Finally, the application costs that includes financial, in-kind and psychic costs are also significant determinants of SMEs discouraged from applying for bank loan. The results of this study support the Theory of Discouraged Borrowers hence contributes useful input to bankers or loan providers in considering small and opaque firms in marketing their services. Additionally, this study also shed some lights to policy makers in their effort to encourage bankers to provide easily obtainable loan to SMEs or such groups

Adoption of accrual accounting in local authorities of Kedah Darul Aman

This study focuses on eleven municipal and district councils in Kedah Darul Aman, viewing whether local authorities adopt the accrual accounting in recording the income and expenditures and the problems faced by local authorities in adopting accrual accounting approach.The study found that only 5 of 11(45%) local authorities in Kedah Darul Aman disclosed the use of accrual accounting in their application of accounting policies in the financial statements.Furthermore, there are certain items under income and expenditure that are still reported using cash basis.The nature of the items themselves, lacking in guidelines and also lacking in number of staff with experience and accounting education are part of the problems facing the local authorities in adopting the accrual accounting

Bumiputera accounting students' intention of a professional examination applicability of the theory of reasoned action (TRA)

Professional qualification such as Association of Chartered Certified Accountants (ACCA), Institute of Chartered Secretary and Administration (ICSA), Malaysian Institute of Certified Public Accountants (MICPA) and Certified Practicing Accountants Australia (CPA) is important and considered to be added value to the degree possessed by accounting graduates. However there are only small figures of the Bumiputera that possessed such professional qualification. The objectives of the study are to investigate the attitude and subjective norm that influence student’s choice of a professional examination using TRA model and also to study the applicability of TRA in the professional accounting settings. A sample of 86 Bumiputera UUM students from Faculty of Accountancy and completed their practical training been selected for the purpose of data collection. The findings of this study has evidenced that the theory of reasoned action can be applied in professional accounting setting as it can support the study of Bumiputera UUM accounting students’ intention to take professional exam. The strong predictive power of beliefs and attitude in students’ intention to take professional exam was examined and identified

Crowdfunding as a Financing Option for Small Contractors

Difficulties in accessing financial support from banks and other financial institutions are the biggest challenge to small and medium enterprises (SMEs) including contractors. This paper aims to examine crowdfunding as a financing option for small contractors. A series of interviews have been carried out with nine participants including six founders and three funders. The results show that bureaucracy is one of the challenges for small contractors to obtain funding from financial institutions. The nature of their business involves various projects at the same time and needs to be completed in a short period. Therefore, faster and easier financial assistance is necessary to ensure the smooth operation of the project through crowdfunding. However, trust is the main component of this method. Funders are more selective and therefore the founders should be able to offer a viable business plan or project that promises a good return. Besides various online crowdfunding platforms available in Malaysia like ECF and P2P, this conventional crowdfunding is still preferred and being practiced among small contractors. The results of this study provide insight to the funders to choose crowdfunding as an investment opportunity and help to improve the economy of the community