AN EXPLORATORY STUDY ON WORKING CAPITAL MANAGEMENT AMONG PETTY TRADERS IN KUALA NERANG, KEDAH

Zahri Hamat, Nor Malina Malek, Khoo Suet Leng, Parthiban S. Gopal, Aiman Syazwan Husain

Abstract


Petty trading is a common economic activity amongst locals in Kuala
Nerang, Kedah. Currently, an ironic situation exists where the petty
traders in Kuala Nerang claim that their businesses are profitable yet
they still face a deficiency in working capital. To explore the situation,
this working paper aims to identify the reasons behind the high instances
of working capital deficiency amongst the petty traders. To this end, the
following research questions are raised. Why does this problem occur? Do
the petty traders actually suffer a loss in their businesses? Do they keep
their accounting records properly to enable them to ascertain whether their
businesses generated a profit or suffered a loss? The findings reported in this
paper are based on in-depth interviews drawn from a convenience sample of
20 petty traders in Kuala Nerang. It was revealed that accounting records
are not kept in order, and therefore, the profits made cannot be determined
accurately. This could be due to a lack of understanding on working capital
management among the petty traders. Hence, it is not unusual for them to
encounter a shortage in working capital.


KEYWORDS: petty traders, working capital, accounting records, rural
informal sector, Kuala Nerang


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e-ISSN : 2289-8115      ISSN : 1985-7012