COMMUNITY ENTREPRENEUR POTENTIAL, FINANCIAL LITERACY AND SUSTAINABLE BUSINESS DEVELOPMENT: AN ANALYTICAL FRAMEWORK FOR RURAL COMMUNITIES IN MALAYSIA
DOI:
https://doi.org/10.35631/IJEMP.935043Keywords:
Community Entrepreneurship, Financial Literacy, Human Capital, Malaysia MADANI, Maqasid Syariah, Rural Malaysia, Sustainable Business DevelopmentAbstract
This article presents a conceptual analytical framework that connects three key variables in the rural community development ecosystem in Malaysia: community entrepreneurial potential, financial literacy, and sustainable business development. Although these three elements have been studied independently in the development literature, the dynamic relationship between them in the context of low-income communities in Malaysia is still not systematically understood. Therefore, this article aims to develop and propose an integrated conceptual framework that explains the relationship between community entrepreneurial potential, financial literacy, and sustainable business development in rural Malaysian communities. This article argues that the realization of sustainable business. The proposed framework suggests that financial literacy converts raw entrepreneurial potential into sustainable business outcomes by enabling individuals to transform latent abilities into viable, resilient enterprises." Using a Systematic Literature Review (SLR) approach guided by an adapted PRISMA protocol. A integrated search across Scopus, Web of Science, and Google Scholar databases targeting publications between 2020 and 2025 yielded 42 relevant peer-reviewed studies based on defined inclusion criteria. supported by contextual analysis for Malaysian rural community case studies, this article develops the Three-Pillar Community Entrepreneurship Framework (TP-CEF). TP-CEF aligns Human Capital Theory, Social Capital Theory, and Economic Empowerment Theory into one integrative and implementable model, while situating each pillar within the normative context of Maqasid Shariah. A model is developed which is not only theoretically cohesive but also contextual. This can guide policy formulation and sustainable rural development. The direct relevance to Malaysia's MADANI national socioeconomic agenda and broader rural development policies in emerging economies.
Downloads
References
Becker, G. S. (1964). Human capital: A theoretical and empirical analysis, with special reference to education. University of Chicago Press.
Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94(Supplement), S95–S120. https://doi.org/10.1086/228943
Hasan, M. A., & Bakar, N. A. (2022). Revisiting Maqasid al-Shariah: Perspectives on preservation of human interests. International Journal of Islamic and Middle Eastern Finance and Management, 15(3), 285–301. https://doi.org/10.1108/IMEFM-12-2021-0561
Hazudin, S. F., Sabri, M. F., Muhamad Tamyez, P. F., Awang Kader, M. A. R., Ridzuan, M. R., Tajuddin, N., & Senthil Kumar, S. (2025). Systematic review of determinants of rural women entrepreneurs’ success: Research progress and future agenda. SAGE Open, 15(1). https://doi.org/10.1177/21582440251390861
Kabeer, N. (1999). Resources, agency, achievements: Reflections on the measurement of women’s empowerment. Development and Change, 30(3), 435–464. https://doi.org/10.1111/1467-7660.00125
Kamaruddin, R., & Ali, N. (2023). Rural community economic empowerment through social entrepreneurship in Malaysia: An analysis of programme support effectiveness. Malaysian Journal of Management and Entrepreneurship, 12(1), 15–27.
Kusumastuti, R., Silalahi, M., Sambodo, M. T., & Juwono, V. (2023). Understanding rural context in the social innovation knowledge structure and its sector implementations. Management Review Quarterly, 73(4), 1873–1901. https://doi.org/10.1007/s11301-022-00288-3
McCarthy, T., & Flynn, J. (2022). Sustainable business practices in small-scale food processing: Lessons from community projects. International Journal of Entrepreneurship and Small Business, 49(4), 210–225. https://doi.org/10.1504/IJESB.2022.126543
Morgan, P. J., & Long, T. Q. (2020). Financial literacy, financial inclusion, and savings behavior in Laos. Journal of Asian Economics, 68, 101197. https://doi.org/10.1016/j.asieco.2020.101197
Nor Azimah, A. A., & Faridah, H. (2021). Development of marketing initiatives for small food entrepreneurs: A case study in Pulau Pangkor. Proceedings of the National Seminar on Social Development, 5, 44–53.
Putnam, R. D. (2000). Bowling alone: The collapse and revival of American community. Simon & Schuster.
Rashid, N. K. A., Lani, M. N., Ariffin, E. H., Mohamad, Z., & Ismail, I. R. (2024). Community engagement and social innovation through knowledge transfer: Micro evidence from Setiu fishermen in Terengganu, Malaysia. Journal of the Knowledge Economy, 15(1), 1069–1086. https://doi.org/10.1007/s13132-023-01102-5
Salleh, M. Z. M., Abdullah, A., Din, N. M., Zakaria, M. N., Alwi, M. A. M., Merican, R. M. A. R., Radyi, S. A. M., & Shamma, S. H. M. (2024). Harmonization of Islamic financial literacy in understanding the Islamic banking services: The case in Malaysia. In Islamic Finance: New Trends in Law and Regulation, Springer, 9-18. https://doi.org/10.1007/978-3-031-48770-5_2.
Salleh, M. Z. M., Abdullah, A., Yaacob, A. A., Zakaria, M. N., Din, N. M., Radyi, S. A. M., Merican, R. M. A. R., & Sehak, M. S. (2025c). Assessing Islamic Financial Planning Literacy Among Civil Servant Retirees. Global Journal Al-Thaqafah, 15(1): 48–59. https://doi.org/10.7187/gjat072025-4
Salleh, M. Z. M., Abdullah, A., Zakaria, M. N., Alwi, M. A. M., Yaacob, A. A., Radyi, S. A. M., Din, N. M., Muhammad, M. Z., Zaib, S. Z. M., Muhamad, F. H., & Zakaria, M. F. (2025a). Financial Planning Literacy Among Government Employees on Retirement. In Studies in Systems, Decision and Control, Springer, 699–707. https://doi.org/10.1007/978-3-031-91424-9_59
Salleh, M. Z. M., Abdullah, A., Zakaria, M. N., Merican, R. M. a. R., Yaacob, A. A., Radyi, S. A. M., Ridzwan, R., Mohamad, N. M., & Zakaria, M. F. (2025b). Financial Planning Among University Students: The Untold Story. In Studies in Systems, Decision and Control, Springer, 733–742. https://doi.org/10.1007/978-3-031-91424-9_62
Salleh, M. Z. M., Hilaluddin, K., Muhayiddin, M. N., & Muhammad, M. Z. (2026). Ethical Values of Islamic Entrepreneurship: Analysis of Hadith Based on Al-Kutub Al-Tis’ah. Global Journal Al-Thaqafah, 16(1), 94–104. https://doi.org/10.7187/GJAT072026-6
Sen, A. (1999). Development as freedom. Oxford University Press.
Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19 pandemic on micro, small, and medium-sized enterprises operating in Pakistan. Research in Globalization, 2, 100018. https://doi.org/10.1016/j.resglo.2020.100018
Smith, R., & Johnson, E. (2021). Marketing strategies for small-scale entrepreneurs: Enhancing visibility in tourist destinations. Journal of Community Development and Innovation, 13(2), 77–89. https://doi.org/10.1080/jcdi.2021.987654
Wahid, H., Nor, M. A. M., & Ahmad, S. (2021). Asnaf entrepreneurship development programmes in Malaysia: A critical analysis. Jurnal Hadhari, 13(1), 1–22. https://doi.org/10.17576/JH-2021-1301-01
