Micro, small and medium enterprises' competitiveness and micro-takaful adoption

Purpose - This paper aims to attempt to first examine the competitiveness of micro, small and mediumsized enterprises (MSMEs) in the logistics industry; second, to identify the MSMEs' perception towards takaful (Islamic insurance); third, to recognise the challenges in the adoption of takaful; and fourth, to suggest strategies to enhance the micro-takaful penetration rate. Design/methodology/approach - The SWOT (strengths, weaknesses, opportunities and threats) analysis was used to measure the MSMEs' competitiveness. Interview sessions were conducted with 13 owners of MSMEs in the logistics industry from the period November 2018 until January 2019 in Selangor, Malaysia. Findings - The SWOT analysis identified several strengths (e.g. advanced infrastructure, rising number of new entrants and contribution to the local economy), weaknesses (e.g. lack of digital culture and training and a dearth of expertise), opportunities (e.g. supportive government initiatives and evolution of the mobile internet) and threats (e.g. changing customer expectations and limited financing facilities). The MSMEs' perception towards micro-takaful and challenges in the adoption of takaful were also identified. Research limitations/implications - This paper provides an understanding of the MSMEs' perception towards micro- takaful products, sheds light on the challenges faced by MSME owners in protecting their businesses from risk exposures and offers strategies to enhance the micro- takaful penetration rate. This study, however, is limited to Malaysia's experience. Practical implications - The identification of MSMEs' SWOT will be useful for these businesses as it provides solid information that can be used to improve business performance while also seeking takaful protection. This paper, other than serving as a guideline for stakeholders in the logistics industry to have a better understanding of their business environment, may also provide useful insights to practitioners and policymakers. Originality/value - This paper integrates the SWOT analysis into a study on business risk exposure and takaful protection from the MSMEs' perspective. Hence, the findings could broaden available knowledge on MSMEs, especially for businesses in the logistics industry. The knowledge may also facilitate matters for takaful operators interested in tapping into the market.