Factors influencing overindebtedness: a logistic regression analysis of consumers in Bangkok
Factors influencing overindebtedness: a logistic regression analysis of consumers in Bangkok
Files (excerpt)
Published date
2018
Resource type
Publisher
Assumption University Press
ISBN
ISSN
DOI
Call no.
Other identifier(s)
Edition
Copyrighted date
Language
eng
File type
application/pdf
Extent
13 pages
Other title(s)
Advisor
Other Contributor(s)
Citation
The Journal of Risk Management and Insurance, Vol. 22 No. 2 (2018), 31-43
Degree name
Degree level
Degree discipline
Degree department
Degree grantor
Abstract
Overindebtedness is a source of default risk facing by commercial banks and loan
institutions. Although studies of factors influencing individuals’ indebtedness are prevalent,
less of previous studies had examined financial factors distinguishing mild-debtors from
overindebted individuals. The present study aims at identifying and empirically testing the
financial factors (i.e. financial literacy, experiences in using financial services, and money
management) which distinguish mild-debtors from overindebted individuals. Questionnaires
were distributed to 440 respondents who are at working age in Bangkok area. Logistic
regression analysis was employed in order to identify critical factors distinguishing milddebtors from overindebted individuals. Findings from the present study indicated that financial
literacy and experience in using financial services were not significant factors that
distinguished mild-debtors from overindebted individuals. Money management, i.e. credit
management and saving management were found to be the most significant factors
distinguishing mild-debtors from overindebted individuals. Results from the present study
provide implications for financial institutions to reduce adverse selection problems. Since
credit management is the most critical factors influencing overindebtedness beyond other
factors, records of previous credit usages and payment behaviors of individuals must be
seriously take into account when determining credit approval. To reduce insolvency risk, credit
rating must be used as the first priority when financial institutions approving loans. In addition,
results from the present study also provide implications for policy makers to reduce personal
debt problem. Since financial literacy in term of numeric calculation is not a significant factors
affecting overindebtedness, financial education that emphasizes mathematic and numeric
calculation may not sufficient to reduce overindebtedness problem, training on how to manage
individuals’ budget, saving, and using credit carefully must be emphasized to reduce financial
problems.
Table of contents
Description
punsarn.dc.description.sponsorship
Spatial Coverage
Keyword(s)
Rights
This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.