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Determinant Of Microcredit Repayment

Author

Listed:
  • Farida

    (UPI YAI Jakarta)

  • Hermanto Siregar

    (Bogor Agricultural University)

  • Nunung Nuryartono

    (Bogor Agricultural University)

  • Eka Intan KP

    (Bogor Agricultural University)

Abstract

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.

Suggested Citation

  • Farida & Hermanto Siregar & Nunung Nuryartono & Eka Intan KP, 2016. "Determinant Of Microcredit Repayment," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 19(1), pages 1-24, July.
  • Handle: RePEc:idn:journl:v:19:y:2016:i:1c:p:1-24
    DOI: https://doi.org/10.21098/bemp.v19i1.600
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    More about this item

    Keywords

    micro-credit; repayment; credit constrained; moral hazard;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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