Women are embedded in every layer of Kelantan’s economy even when official figures fail to reflect their presence. Home kitchens around the state become small-scale food businesses, WhatsApp groups become collectives for dropshipping, and verandas become venues for tailoring.
Women are embedded in every layer of Kelantan’s economy even when official figures fail to reflect their presence. Home kitchens around the state become small-scale food businesses, WhatsApp groups become collectives for dropshipping, and verandas become venues for tailoring. These everyday enterprises may not appear in business registration databases or comply with formal labour regulations, yet they are the lifeline for many families. According to the Department of Statistics Malaysia (DOSM), the 2023 Informal Employment Survey recorded 3.45 million Malaysians engaged in informal work . When compared to the 15.81 million formally employed individuals , this indicates that nearly 22% of the national workforce is informally employed. Women comprise nearly 40% of this group , amounting to approximately 1.35 million female informal workers (DOSM, 2023).
The appeal of informal work is grounded in its flexibility, ease of entry, and immediate returns. Women in Kelantan are often able to reconcile caregiving responsibilities with income-generating activities due to the adaptable nature of informal employment. With minimal start-up capital, women can begin earning the same day they prepare kuih for sale or complete custom batik orders. These economic pull factors often intersect with deeper structural constraints. Kelantan’s formal employment opportunities remain narrow, particularly for women. The female labour force participation rate (LFPR) in the state was recorded at 42.9% in 2020 , significantly below the national average of 56% in 2023 (Galen Centre, 2023; DOSM, 2023). In areas where factories, offices, and industry hubs are limited, informal self-employment becomes the default economic path for many women.
The dual-line chart presents a comparison of male and female Labour Force Participation Rates (LFPR) and their respective shares in the informal sector in Kelantan from 2015 to 2023, based on illustrative data. The trends clearly reveal two persistent gender-based disparities. Firstly, women consistently exhibit a much lower LFPR than men throughout the period, reflecting ongoing challenges in accessing formal employment opportunities in the state. Secondly, the chart highlights a significantly higher proportion of women engaged in the informal sector compared to their male counterparts. This gender gap in informal employment has shown a gradual upward trend, indicating that more women in Kelantan are relying on informal economic activities—such as home-based businesses, petty trading, and casual labour as a primary source of livelihood. The information emphasizes the socioeconomic and structural elements that drive women into informal labor and the necessity of focused legislative initiatives to encourage their involvement in safer and more formalized economic positions.
Source: Department of Statistics Malaysia (DOSM). (2015–2023). Labour Force Survey Report, Malaysia
The informal sector has a significant impact on Kelantan's local economy, while being invisible in statistics and policy. According to the International Monetary Fund (IMF), Malaysia's informal sector contributes around one-third of the country's total production, putting it on level with comparable middle-income nations (IMF, 2021). Women's unofficial microbusinesses are vital to the local economy in Kelantan. Local farmers provide the ingredients, community members are periodically recruited as laborers, and company revenues are reinvested in home necessities or educational costs. Even at times when earnings in the formal sector are stagnant, these connections provide multiplier effects that boost demand in rural areas.
However, the sector’s informal nature brings with it significant vulnerabilities. Incomes are unstable and highly susceptible to external shocks whether from seasonal disruptions like floods, health issues, or a cancelled event order. Social safety nets rarely cover these workers. For example, World Bank data from 2021 reveals that only 12% of self-employed Malaysians contributed to EPF’s i-Saraan scheme , and a mere 16.4% were covered under the Self-Employment Social Security Scheme (SESSS) . For informal workers—particularly women—this means that a single crisis, such as illness or flood damage, can instantly deplete years of limited savings, exposing families to poverty traps (Malay Mail, 2021).
While Malaysia’s informal economy accounts for roughly a quarter to one-third of national GDP, translated in Kelantan it carries notable economic weight. A Department of Statistics Malaysia (DOSM) breakdown of informal sector employment shows that Kelantan contributes approximately 9.4% of total informal employment nationwide statsdw.dosm.gov.my . Meanwhile, Kelantan’s share of GDP generated by the informal sector is estimated at around 10.9% of informal-sector GDP . By contrast, the formal sector comprising services, manufacturing, construction, and agriculture still dominates overall state economic output. This suggests that, while the formal economy remains the primary engine of Kelantan’s income and development, the informal sector plays a disproportionately large supportive role, especially in rural and household-level economic activity.
To address this systemic exclusion, well-designed policies are needed ones that strengthen protections without eliminating the entrepreneurial agility that defines the informal economy. Cooperatives, mosques, and community learning centers should be used to enhance financial education and digital literacy initiatives. These upskilling programs should be strategically facilitated by institutions such as Universiti Malaysia Kelantan (UMK), particularly for elderly women who are less tech-savvy. However, it is necessary to expand microfinance initiatives that rely on social collateral, including community-based trust or group guarantees. Women entrepreneurs who operate informally and frequently lack official assets or land titles would have more access to loans as a result.
Traditionally, Kelantanese women have formed the backbone of the state's social economy, generating income within local networks, producing textiles, and feeding communities often from the comfort of their own homes. In addition to being just, empowering people via financial assistance, policy recognition, and digital inclusion is also wise business. In addition to raising family incomes, identifying these unseen development engines will bring Malaysia's national economic metrics closer to reflecting the actual conditions of its citizens. Women who are frequently left out but make essential, unnoticed, and quiet contributions to Kelantan's economy must be counted first in any development strategy that aims to be truly inclusive.
Department of Statistics Malaysia (DOSM). (2023). Informal Employment Survey Report 2023. Retrieved from https://www.dosm.gov.my
Department of Statistics Malaysia (DOSM). (2023). Labour Force Survey Report, Malaysia, 2023. Retrieved from https://www.dosm.gov.my
Department of Statistics Malaysia (DOSM). (2022). Informal Sector Statistics Report. Retrieved from https://www.dosm.gov.my
Galen Centre for Health and Social Policy. (2023). Labour force participation among women in Malaysia: Structural and social barriers. Retrieved from https://ova.galencentre.org
International Monetary Fund (IMF). (2021). Shadow Economies Around the World: What Did We Learn Over the Last 20 Years? IMF Working Paper No. WP/21/86. Retrieved from https://elibrary.imf.org
Khazanah Research Institute. (2020). Time to Care: Gender Inequality, Unpaid Care Work and Time Use Survey. Retrieved from https://www.krinstitute.org
Malay Mail. (2021, December 22). Only a fraction of self-employed Malaysians are covered by EPF, SOCSO schemes, says World Bank. Retrieved from https://www.malaymail.com
World Bank. (2021). Malaysia Economic Monitor: Weathering the Surge. Washington, DC: World Bank Group. Retrieved from https://www.worldbank.org/en/country/malaysia/publication/malaysia-economic-monitor
