CASE STUDY: MICRO SCALE BUSINESS SURVIVAL

 I have 5 years experience as a business loan officer. My job is to process and approve the loan by the micro company. Here is a study case about the micro scale company that fail after taking a loan fron financial institution 

When we talk about micro company, most of them are homemade base and operated by owner himself. Sometimes they will hire 1 or 2 workers. Most of the micro scale company apllying a loan to expand their business into larger scale. In other words they want to transform their company from micro into small scale industry.

According to The Edge, only 53% of the company that take the micro loan was able to repay. The rest of 47% are struggling to survive after they use the loan to expand their business. Even worse, some of them will close their operation after 1 year. What exactly happen?

Here is some points of failure:-

1. Lack of management skill

After they expand the business into small scale industry, they still operate their business the way they operate it like the micro scale. They fail to manage the worker, product output and operation.

2. Did not study the current market

They are too dependent on the micro scale market and fail to bring the product to larger market.

3. Lack of financial or account knowledge

They fail to make the proper account for the company cashflow. Even worse, some of them do not have the proper account book.

4. Fail in marketing

They fail to recognise the target market of the product. 

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