DETERMINANT OF MICROCREDIT REPAYMENT | Zendy

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DETERMINANT OF MICROCREDIT REPAYMENT

Author(s) -

Farida Farida,

Hermanto Siregar,

Nunung Nuryartono,

Eka Intan

Publication year - 2016

Publication title -

deleted journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.505

H-Index - 4

ISSN - 2460-9196

DOI - 10.21098/bemp.v19i1.600

Subject(s) - collateral , loan , microfinance , moral hazard , business , consumption (sociology) , logistic regression , demographic economics , economics , labour economics , finance , incentive , economic growth , microeconomics , medicine , social science , sociology

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.

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