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

• Published in: SUSTAINABILITY
• Main Authors: Sarabdeen, Masahina; Ismail, Shafinar; Hidzir, Putri Aliah Mohd; Alofaysan, Hind; Rahmat, Suharni
• Format: Article
• Language: English
• Published: MDPI 2025
• Subjects: Science & Technology - Other Topics; Environmental Sciences & Ecology
• Online Access: https://www-webofscience-com.uitm.idm.oclc.org/wos/woscc/full-record/WOS:001443493300001
• ISSN: 2071-1050
• DOI: 10.3390/su17051889

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.