IntroductionThe Malaysian government has implemented a number of programs to ensure the sustainable growth for the Micro-Enterprise sector. With the encouragement from the government Micro-Enterprises in Malaysia have been able to excel in supply chain products and services delivery. (Mahadevan, 2007). Micro-Enterprises in Malaysia are the enterprises whose annual sales turnover is less than RM 250,000 or the no. of full-time employees are less than five. Micro-Enterprises comprise of 91% of total Malaysian business but they contribute only 32% of the GDP. The capital invested in this business is too less which further hampers their growth. The improvement in the GDP contribution of Micro-Enterprises of Malaysia would improve the Malaysian economy much better. Hence the Micro-Enterprises are the most targeted customers to the Malaysian banks in the present scenario. The Micro-Enterprises usually gets funds from the family, relatives and promoters to get their work started initially which is usually too less for a company to become large and successful. The banks are the sources of credit-based and relevant risk analysed capital investment to the Micro-Enterprises. What matters most to the banks in Malaysia is the customer loyalty of the Micro-Enterprises with the bank they are operating with. It is of prime necessity to the banks to check the personal factors that have been affecting the loyalty of Micro-Enterprise owners towards Conventional and Islamic banking services in Malaysia.

Qualitative Data Analysis on the factors influencing Micro-Enterprises loyalty to their bank in Malaysia.Qualitative Data Analysis or QDA is the set of collective processes wherein the collected data is converted into a form of expression or explanation of the conditions and the people who are to be investigated. Interpretative philosophy is taken into consideration while going through QDA process. Through this process, the appropriate and relevant qualitative data gets picked for interpretation.The process of Quality Data Analysis includes the following two procedures:1. Writing.2. Identification of Themes.There are six questions that are needed to be addresses for a qualitative content analysis. They are as follows:1. What kind of the data is to be analysed?2. In which fashion they have been addressed?3. What is the total population from which the data is collected?4. The data is collected and analysed for which context?5. What would be the limits under which the data analysis has to done?6. What would be the ultimate target of the interpretation? (Krippendorff, 1980)

The Data Analysis procedure could be explained with above diagram more elaborately. The above diagram explains how the things amiss are first brought to the notice. Then the related data is taken into consideration and thereafter collected in the systematic manner. Afterwards, the data is analysed in order to come to the proper conclusion.We have undergone a Thematic Inductive Qualitative Data collection process to determine the customer loyalty of the Micro-Enterprises towards their banks. The following analysis could be taken from the data collected. This analysis would further help the banks to maintain cordial relationship with Micro-Enterprises which would enhance the loyalty towards bank.

Banks ReputationIn order to study how Banks Reputation influences its customers loyalty more thoroughly, we have further categorised the theme into i) Banks Reputation and ii) Banks Image. Collectively a broad picture of the factor Banks Reputation could be generated.i) Banks Reputation: From the findings from the data collected, the bigger and stronger the bank is more preferred by the Micro-Enterprises. This concludes that these enterprises are looking for the stableness and security from the bank they operate with. Even though the experienced staff and tailored services according to the needs and expectation are required, they are not the most important consideration. Since the Micro-Enterprises operate in small scale, they are not much enthusiastic about the international banking.The Micro-Enterprises demand the stableness and security from the bank more than anything else so that they do not lose their money when the banks take up new venture. Also the risk of the bank getting take overed by any other bank, resulting into new policies and new systems, is nullified.

ii) Banks Image:From the survey conducted, it is clear that the Micro-Enterprise owners look for the bank which is easy to access and the transactions are conducted most conveniently. Since Micro-Enterprises are mostly owned by Head of the Family and decisions are taken like-wise, it is completely left to the Head of the Family if the company could approach technology compliant bank. Hence mostly the traditional banks are preferred by such enterprises.The next preference of the customers would be the ecommerce facility which could enable the clients to operate without having to visit the bank personally. The data collected from Micro-Enterprises also concludes that the companies are not looking for extra features offered by banks. Due to lack of disposable income, the Micro- Enterprises are only looking for the services which would help them grow their businesses.For any bank, its reputation is considered to be a most important asset. During mid-1980s, a bank named Continental Illinois had a blow on its reputation which further suffered the liquidity crisis and the total failure of the bank in whole.To safeguard its reputation should be one of the major tasks for any bank be it traditional bank or Islamic bank.The vulnerability of the bank towards the reputation risk can be calculated through following procedure:1. Does the bank have its values defined?2. Are the values outlined are brought up in the bank board meetings?3. Does the banks incentive program force the implementation of bank values?4. Has the internal communication assessment procedure been taken to make sure whether values of the bank are properly complied to?

Perceived Service QualityThe Perceived Service Quality can be determined by analysing the following determinants:i) Core ServicesThe Micro-Enterprises business owners prefer the bank which would provide them with the same kind of services whatsoever channel they are using. The business woman or businessman who is travelling would have to contact the bank official on telephone for urgent monetary transaction. The 24x7 availability of such services will the increase banks worth. Presenting different type of product and service options to clients is also very important for a bank.ii) Service Delivery from Human elementsThe friendly staffs of the bank are always its goodwill. The Micro-Enterprise owner would always look for the bank whose staff is friendly and is willing to entertain its client. Rest the interpersonal skills of the staff, the value of advice the staff provide does not count as much important for the Micro Enterprise owners unless the staffs are friendly.iii) Systemization of service delivery through non-human elementsIn this modern age, where all the work is done through internet, the Micro Enterprise owner would want an internet banking facility from the bank so that he may not have to run to the bank every time. The client would be benefited if the bank is well located and easily accessible to operate even in the peak hours. The office layout does not matter much to the client unless he is provided with required services fast and in efficient manner.iv) Tangibility of the servicesProviding the good services to the clients and the rewards and bonuses for the regular customers always helps in retaining the customers. In Malaysia, there is lot of problem faced due to parking unavailability. For some client, it does not matter if the bank premises are big or small. But having ample parking space allotted just for the customers means a lot to them. A Micro Enterprise owner would always look for the bank that could look after the customers small needs that would save his time as well as money.

Relationship QualityThe Relationship Quality of the bank towards Micro-Enterprises can be determined by considering the following themes:i) TrustThe trust factor is very important for Micro Enterprise business owner. The mutual understanding and the mutual trust is the most important factor for a client to pursue his loyalty to the bank for a long period of time. Since Micro Enterprises operate in a very small scale and the cash flow is very less too, it becomes tough for the bank to trust those enterprises with huge investment. In such cases, if the bank could provide with even one such employee to client whom the client could totally trust, the bank could earn the long term loyalty from the client. The Micro Enterprise business owners might feel even the more secured if the bank is a public national bank. With the private bank, even if the facilities provided are more, there is always the threat of money loss.Some other factors like accessibility and operations through phone call and intimation of irregular cash flow, even if they are very important for the business to run smoothly, are not very important for the Micro Enterprise business owner.

ii) CommitmentForm rhe survey conducted, it is very clear that in the long term relationship with the bank, and the client would only reconsider changing the bank when it is unhappy with the bank. A Micro Enterprise business which has good relation with the bank and functions smoothly would not change its bank because that would increase its switching cost.

iii) SatisfactionThe processing fees charged, fees and structure rates charged are the major factors that get considered while choosing the bank and keeping long term relationship with that bank. The client would always feel much closer and loyal to the bank if the bank officials recognize the client and him the yearly incentives as a regular customer. In the trustworthy and long term relationship, the bank can afford to close its eyes on policies and procedure meant for client. This would provide the client with the ease of the operations. If the bank is transparent in all its processes, it would help in gaining the clients confidence.The proper and well thought relationship is of prime importance in any business. The level of personalization and friendliness, the organization is able to maintain with its clients, determines its success in the near future.In any part of the world and in any business, consumer is the considered to be the king. Outlining the values of the organization which enable the staff and management to adhere to the policies explaining the consumer services is very important for a successful business.

Ethnicity and ReligiosityThe Ethnicity and Religiosity factors that determine the customer loyalty of the Micro -Enterprises towards the bank can be determined through following evaluation:i) Faith and BeliefThe Islamic Banking does not practice taking or giving interest. It practices profit sharing. During economic turmoil in 1997, most of the Micro Economic businesses got affected badly due to fluctuating business rates and most of them transferred their account to Islamic Banking. The money transactions through this bank are transparent and good number of services is provided to the client.

ii) Race and Ethnic BehaviourThe Ethnicity of the bank is not of much concern to the Micro Enterprise owners as long as the banks are providing good services and good income is being generated through them with the security factor taken into consideration. But still, having a bank who knows the language and values of the society help the Micro Enterprise owner get rid of day today problems. If culturally the bank and Micro Enterprise come from same background, the bank would be able to address the problems with ease.

Ethnicity and Religion influencing Micro-Enterprises loyalty in MalaysiaSince the establishment of commercial banks in the Muslim world, Islamic scholars have been continuously examining the methods of the operations conducted by the conventional commercial bank. As the time flew, Islamic scholars came to the conclusion the conventional commercial banking system and its operations are against the principles outlined in Shariah. According to Shariah principles, paying interests on the savings or charging interests on the loans as well as debts is not allowed. Taking into consideration the growing needs of the humankind, Islamic scholars and Islamic economists prepared the conceptual models of financing as well as banking during the twentieth century. This development of this model was necessary for the growth and development of the Muslim businesses around the world. Indirect or direct intermediation in between resource deficit and the surpluses was taken into consideration while developing the model. (Ayub, 2007)In Malaysia, Islamic banking came to existence in year 1963 in the name of Perbadanan Wang Simpanan Bakal-Bakal Hajj. PWSBH was established to form an institution which would help the Muslims in Malaysia to save the money for travelling to Hajj. Malaysias first Islamic bank was established in year 1983. From year 1993, the finance companies, the merchant banks and the commercial banks were being allowed to give the services and products of Islamic Banking which was operated under Islamic Banking Scheme, also known as IBS. However, by the Malaysian policies, these banks and institutions are required to separate the activities and funds collected from the activities and funds of the conventional banking. This policy was brought into implementation so that there is no intermingling of the funds since the interest policies and funds accumulation system in both the types of banking is different.Diverse cultures prevail in Malaysia. Malaysia has absorbed in it different languages and different cultures of other Asian countries. Next to Malays, Islamic population is more in Malaysian. There are also people from India, China and other origins. Malaysia has 3rd largest economy in whole of South East Asia. It ranks 29th in the world economy. Providing the financial service is one of the core services in Malaysia. It is very important for Malaysian Government to recognize the wants and needs of its clients whether retail or corporate. The government has to encourage the local businesses to make the right choices of banks as far as their business needs are concerned.In all, Malaysia has 41 banks out of which 19 banks are Islamic banks. The assets of the Islamic banks in Malaysia have been showing 20% increase every year (MIDA, 2009). The Malaysian government has been considering Religion and Ethnicity as an emerging factor determining the loyalty of the Micro-Enterprises businesses. Islamic banking has emerged as major competitors to the rest in Malaysia. Initially, Islamic banks were considered as the means by which Islamic population would be facilitated to perform their religious duties like visiting Hajj. But now the Islamic banks have been turning their attention towards core banking services and are ready to offer all those services that other commercial banks are offering. The Islamic policies still do exist in their banking system (Wilson, 1997). The major role of a religion as far as choosing the banks are concerned, they been seemingly over emphasised, as per the opinions of few scholars in regards to the deciding of the loyalty, which has returns as the prime motive and religious sentiments are just the delight factor for the banks customer (Dusuki & Abdullah, 2006).There are separate rules and regulations as far as Islamic banks are concerned. The Islamic banks should necessarily perform as per the policies defined in the Islamic Banking Act which had been put to implementation in April 1983. The important factor that differentiates conventional banks from the Islamic banks is that Islamic bank does not practice payment of interest on the savings and receipt of the interest on the loan or debts. Islamic bank practices PLS policy i.e. Profit and Loss sharing policy. The Islamic banking policies also prohibit undertaking the trading that involves financial risks. It do not fund the business dealing in alcohol and pork trading and production (Cihak, Hesse & Intenational Monetary Fund, Monetary and Capital Markets Dept. 2008). Malaysia has been making good progress after Islamic banking came into existence in year 1983. It has become the main centre of the global Islamic banking. (International Monetary Fund, 2009). Malaysia has been successful in maintaining the balancing act between Islamic banking and traditional banking systems. The Islamic banking system in Malaysia has been outlined in such a manner, that it goes parallel alongside conventional banking. Both the banking systems have co-existed in Malaysia and both the systems have been making major contribution to the Malaysian economy. (El Tiby Ahmed & El Tiby, 2011). There are many factors that have ensured the Islamic banking success in Malaysia. The most important factor is inter-banking money market system. The Malaysian government has made an appropriate atmosphere economically as well as fiscally for the growth of Islamic banking system.

The newly emerging Ethnicity and Religious factor affecting the customer loyalty of Micro EnterprisesThe Islamic banks in Malaysia have survived the economic slowdown wherein the interest rates went on fluctuating. This slowdown proved to be a heavy loss to the customer dealing with commercial banks. Since Islamic banks practices absolutely no interest system. It believes in profit sharing system, the more and more customers were diverted towards the Islamic banks in order to avoid another slowdown.Ethnicity FactorsNext to Malays, Malaysian population mainly comprises of Muslims. The Muslim customers claim banking through Islamic banks help them to remain close to the culture. Since these banks are well versed with the daily problems of local Muslims, they could provide easy solutions to their problems. The common language spoken by the bank staff and the customers make huge influence on the clients retention. The client would always be more comfortable dealing with the official who can speak in his language.The Islamic bank officials and the customers belong to the same background which would help them grow the business more by growing their network and contacting as many customers as possible from their background.When the bank officials are of same background, there is always a personal touch to the relation between the Micro Enterprise and the bank official.

Religiosity FactorsThe Micro Enterprise owner for the first reason would approach the Islamic bank because it provides Islamic services and products.Since the Islamic banks deal in Profit sharing policies, the Micro Enterprise owner feels more secured investing in those banks rather than the banks dealing in interest which is against the rules of Islam.Since there is Islamic element in their transaction, the Micro Enterprises feel more personal and transparent system as they are mostly well acquainted with the Islamic procedures.There are few powerful communities existing in Malaysia who would not bear the non-Islamic products and services. In order to deal with such communities in the day to day business, Micro Enterprises have to follow their policies.In all, the Ethnicity and Religious factor has been emerging as most influencing factor in determining the loyalty of the Micro Enterprises towards their current bank.

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