DETERMINANT OF MICROCREDIT REPAYMENT

This paper investigate the determinants of microcredit repayment by employing the logistic regression on micro-business households in Pati, Central Java. The result of this study reveals that loan repayment affected significantly by the business lines, food consumption spending, side job, other loan...

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Bibliographic Details
Published in:Buletin Ekonomi Moneter dan Perbankan
Main Authors: Farida Farida, Hermanto Siregar, Nunung Nuryartono, Eka Intan KP
Format: Article
Language:English
Published: Bank Indonesia 2016-09-01
Subjects:
micro-credit
repayment
credit constrained
moral hazard
Online Access:https://www.bmeb-bi.org/index.php/BEMP/article/view/600
Description
Summary:This paper investigate the determinants of microcredit repayment by employing the logistic regression on micro-business households in Pati, Central Java. The result of this study reveals that loan repayment affected significantly by the business lines, food consumption spending, side job, other loan sources, collateral, and credit constrained. Interestingly, the result concludes that the loan repayment are no longer influenced by moral hazard, since the characteristics such as gender, education level, age, experience do not significantly encourage borrowers to repay. This paper also conform the important role of peer-screening process on hindering the credit default.
ISSN:1410-8046
2460-9196

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