The effect of saving account ownership and access to financial institutions on household loans in indonesia

Robby Maulana, Chaikal Nuryakin

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates whether saving account ownership and access to financial institutions influence household credit in Indonesia. Using a multinomial logit regression model and a sample of 294,426 households from the 2018 national socioeconomic survey and the village level data, we find that account ownership is essential in encouraging formal credit and reducing informal credit. Access to commercial banks, rural banks, and cooperatives can then improve formal credit without significantly reducing informal credit. Hence, the government needs to encourage bank account ownership and facilitate access to financial institutions in order to promote formal credit and reduce informal credit.

Original languageEnglish
Pages (from-to)465-486
Number of pages22
JournalBuletin Ekonomi Moneter dan Perbankan
Volume24
Issue number3
DOIs
Publication statusPublished - 30 Sep 2021

Keywords

  • Account ownership
  • Credit access
  • Financial inclusion
  • Financial institutions

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