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The Role of Social Financing in Promoting Social Equity and Shared Value: A Cross-Sectional Study of Small and Medium Enterprises in Malaysia and Saudi Arabia

Author

Listed:
  • Masahina Sarabdeen

    (Department of Economics, College of Business Administration, Princess Nourah bint Abdulrahman University, Riyadh 11671, Saudi Arabia)

  • Shafinar Ismail

    (Faculty of Business and Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Melaka 75350, Malaysia)

  • Putri Aliah Mohd Hidzir

    (Faculty of Business and Management, Universiti Teknologi MARA, Cawangan Melaka Kampus Bandaraya Melaka, Melaka 75350, Malaysia)

  • Hind Alofaysan

    (Department of Economics, College of Business Administration, Princess Nourah bint Abdulrahman University, Riyadh 11671, Saudi Arabia)

  • Suharni Rahmat

    (Faculty of Management and Technopreneurship, Universiti Teknikal Melaka, Melaka 76100, Malaysia)

Abstract

This study intends to investigate the role of social financing in supporting sustainable development and fostering entrepreneurship within small and medium enterprises (SMEs) and its future directions and opportunities in Malaysia and Saudi Arabia. SMEs are increasingly implementing sustainable business models to tackle resource constraints and environmental issues to foster long-term social and environmental impact. A quantitative research design was employed, with data collected through questionnaires distributed to SME owners using purposive sampling. A total of 600 questionnaires were distributed, with 106 valid responses analyzed. The study employed descriptive statistics and Structural Equation Modeling (SEM) using SmartPLS 4.0 to assess the framework. The findings reveal significant positive effects of financial institutions, globalization impact, and access to finance on the role of waqf in SME development, while business obstacles and government support showed no significant influence. According to this study, open innovation is crucial to fostering collaboration between small- and medium-sized enterprises, Islamic endowments, and external stakeholders such as non-profits, government agencies, and community groups. This research adds to the expanding body of knowledge regarding the efficacy of social entrepreneurship and inclusive business models in addressing environmental challenges and assisting SMEs in their long-term growth by facilitating the creation of shared value and the dissemination of sustainable business solutions.

Suggested Citation

  • Masahina Sarabdeen & Shafinar Ismail & Putri Aliah Mohd Hidzir & Hind Alofaysan & Suharni Rahmat, 2025. "The Role of Social Financing in Promoting Social Equity and Shared Value: A Cross-Sectional Study of Small and Medium Enterprises in Malaysia and Saudi Arabia," Sustainability, MDPI, vol. 17(5), pages 1-25, February.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:5:p:1889-:d:1597707
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    References listed on IDEAS

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    1. Philippe Aghion & Thibault Fally & Stefano Scarpetta, 2007. "Credit constraints as a barrier to the entry and post-entry growth of firms [‘Dualism and macroeconomic volatility’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(52), pages 732-779.
    2. Lorenzo Gai & Maria Cristina Arcuri & Federica Ielasi, 2023. "How does government-backed finance affect SMEs’ crisis predictors?," Small Business Economics, Springer, vol. 61(3), pages 1205-1229, October.
    3. Mohamed Abouelhassan Ali & Moaaz Kabil & Rahaf Alayan & Róbert Magda & Lóránt Dénes Dávid, 2021. "Entrepreneurship Ecosystem Performance in Egypt: An Empirical Study Based on the Global Entrepreneurship Index (GEI)," Sustainability, MDPI, vol. 13(13), pages 1-22, June.
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    5. Wan Amir Azlan Wan Haniff & Ruzian Markom & Wan Mohd Abid Basysyar Wan Ismail & Amir Imran Zainoddin, 2023. "Optimising under-utilised waqf assets in Malaysia through social entrepreneurship," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 13(1), pages 1-13.
    6. Mr. Armand P Fouejieu & Anta Ndoye & Tetyana Sydorenko, 2020. "Unlocking Access to Finance for SMEs: A Cross-Country Analysis," IMF Working Papers 2020/055, International Monetary Fund.
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