Open AccessDETERMINANT OF MICROCREDIT REPAYMENT
Author(s) -
Farida Farida,
Hermanto Siregar,
Nunung Nuryartono,
Eka Intan
Publication year - 2016
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 , labour economics , economics , finance , incentive , economic growth , microeconomics , social science , sociology , medicine
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.