Financial access for starting abusiness: evidence of internal andexternal financial sources, andperformance of Malaysian SMEs
2015
- The main objective of this study is to unearth the impact of internal and external funding
sources for starting a business on the performance of SMEs, and to identify the potential of other core
variables namely business experience, educational level, and size of firm, which may significantly
influence the SMEs’ performance. The data was collected from 484 SMEs via a structured
questionnaire and analyzed by using the Structural Equation Modeling (SEM) technique. The study
found that the internal and external sources of finance were insignificantly related to the SMEs’
performance, while business experience, level of education, and firm size were positively related to
the SMEs’ performance. The findings of this study reveal that finance is not the main source that
needs to be taken into account by entrepreneurs, supporting institutions, and policy makers in
improving the SMEs’ performance. Further research in this area of study should extend into
examining and adding more components that are relevant to a variation of the SMEs’ performance.
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