Religious Value Practices and Micro Enterprises’ Performance in Microcredit Program

Abstract

The objective of this paper is to examine the practices of religious values and the enterprises’ performance in microcredit program. The primary data were collected from 756 micro enterprises under the microcredit program in which stratified sampling method was utilized for the data collection. The data were then analysed using the Factor analysis and multiple regression analysis. The findings reveal that the practices of religious values are significantly related to micro enterprises’ performance. The factors of religious values such as virtue, observance and persistence have a significant positive relationship with micro enterprises’ performance. However, religious values such as truth and kindness indicate an insignificant relationship with micro enterprises’ performance. From the viewpoint of policy and business strategy, a comprehensive guiding mechanism involving business ethics and religious values among entrepreneurs should be implemented to ensure that Muslim entrepreneurs do not deviate from the religious values set forth by their religion. Total business ethics and the practices of religious values do not only guarantee success in the economic activities but also the promise of victory in the hereafter. This paper proves that religious values are important to the successful performance of a business. However, generally entrepreneurs are greedier in pursuing their business values rather than the religious values and their decision making is usually based on socio-moral considerations in which these are sometimes quite insignificant in explaining their business performance. Stakeholders should take note that it is important to adhere to the religious values in order to determine business performance but the entrepreneurs’ attitude tends to make the values insignificant.