This research analysis is on microfinance practice and its contributions towards the sustainability and development of women entrepreneurs in Malaysia. In fact, in Malaysia most of the participants who received the benefit of microfinance are single mothers. Consequently, microfinance emerged as an economic development approach intended to address the financial needs of deprived groups in the society. The concept of 'kootu' is an alternative form of microfinance practice and henceforth, the paper provides a distinction between the 'kootu' concept and the Grameen Bank model. The barriers and prohibition of 'kootu' concept financing are not formalised, and only applicable to entrepreneurs who could not get access to the formal financial support. Major drawbacks of 'kootu' financing include the absence of insurance coverage, ceasing membership and risk of losing money contributed in the system.