DETERMINANTS OF BORROWING BEHAVIOUR AND FINANCIAL WELL-BEING (CASE STUDY: CREDIT USERS IN BANDUND)

• Main Author: Adelaide Christabel S, Yolanda
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46529
• Institution: Institut Teknologi Bandung

Nowadays most of young adults face a major threat to their financial well-being. Advanced technology also makes people become more consumptive. Consumer credit is an important element that could stimulate economic growth. Unfortunately, most of the credit users do not understand clearly the purpose of applying for credit. Lack of financial literacy could make them fall to over-indebtedness. Indonesia as a developing country is inseparable from the problem of financial literacy. It means it will lead them to a situation where they stuck with debt or having low score on financial well-being. Therefore, this study aims to determine the factors that give significant effect to borrowing behaviour factors in order to know whether Indonesian people especially in Bandung really have a high financial well-being. Because if they have high financial well-being, this situation should indicate that they will not borrow money too much on basic daily needs. This research was conducted in Bandung using CFPB and financial literacy questionnaire distributed to 384 respondents and the data is analysed using multiple linear regression. T-test and F-test is used to see whether variables like demography factor (age, gender, marital status, income level, educational background), psychological factor (time orientation, impulsivity, social status, self-control) and financial literacy are significant to borrowing behaviour and financial well-being. Demography factor, psychological factor and financial literacy can influence 26.1% of borrowing behaviour. While demography, psychological factor, financial literacy, and borrowing behaviour can influence 40,7% of financial well-being. Determinant of borrowing behaviour which found in this study is age, gender, income level, time orientation, impulsivity, self-control and financial literacy. Determinants for financial well-being is age, gender, income level, social status, impulsivity, self-control and financial literacy and borrowing behaviour. Introducing financial literacy since early age through financial education, along with providing the right tools (such as software or mobile application), third party (such as OJK or financial influencers) involvement in raising awareness are also needed because it’s expected to improve financial well-being in Indonesia especially Bandung