ISSN: 2225-8329
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Malaysia is the second largest leading of oil palm producer in the world behind Indonesia. Oil palm production in Malaysia comes from smallholder with 40% and the remining 60% are from big companies and government supported. While 40% of oil palm production comes from smallholders, it still brings big impact on the Malaysian economic. The issue is smallholders confronts a critical challenge in optimizing its potential due to lack of financial support to improve their oil palm production. Majority oil palm smallholders started from personal saving and family help. Smallholders may not be aware of the existent of certain financial loans offered by commercial banks which can help them in optimize their oil palm or they may have overlooked the opportunity. Hence, study was conducted among smallholders in Baram Tengah Sarawak by implementing Theory of Planned Behaviour in form of questionnaire to determines the relationship between smallholder’s Attitude, Subjective Norm, and Perceived Behavioural Control towards Intention to apply for financial aid from commercial banks. The result shown that, there are two factor that significantly influence the intention of smallholder to perform commercial bank loan which is the social pressure from family and friend and the positive evaluation of smallholder toward apply for commercial bank loan. As for the main factor to influence intention of smallholder to perform commercial bank loan is the social pressure from family and friend. The stronger the social pressure from family and friend the more likely the smallholder are to perform for commercial bank loan. From this finding, it can help in improving policy of bank loan application such as offering affiliate program together with bank loan application where all related parties received benefit from the bank loan application. This might help in giving smallholders the opportunity to optimize their oil palm production and increase profitability.
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