This paper presents the issues emerging from a preliminary study involving local desk research and key informant interviews on the background of handicraft making in Sabah. It is found that despite the government initiatives under its handicraft development program that clearly wishes to inspireformal commercialised production, vast majority of handicraft makers in Kota Belud, Sabah still make handicrafts from their home, in fact, half proportion of these home-based makers are part-timers. This finding has provided some valuable insight to question “why home-based production is so favoured among handicraft makers in rural Sabahâ€. Several issues related to their decisions to orient (or not) to workshop-based production is argued in this paper: (i)Do workshop-based producers always high-performers and home-based producers always low-performers? (ii)Perceived advantages or disadvantages of producing handicraft in a workshop or from home, (iii)How are relationships within business networks formed. In addition, based on the key informant interviews, several main challenges likely to inhibit producers’ decision to produce their handicraft in a formal commercialised manner arealso discussed, namely difficulties in access to technical and financial resources, lack of motivations to move to higher level of commercialisation, and the absence of young successor to sustain the craft production. This paper hoped to offer valuable insight for future research, specifically onfactors for commercialisation process and performance among handicraft makers in rural Sabah, in spite of their “formal†or “informal†production status. In addition, this paper provides insight to government and policymakers about the current nature of handicraft production in Sabah, in which home-based and less formally managed production, in spite of their ‘disadvantaged’ status, might as well generate higher revenues to handicraft producers. Furthermore, it is expected that this paper will help to improve the guiding principles in reducing poverty in those remote areas in Sabah as well as to sustain Malaysian culture for future generation.
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