THE EFFECT OF SAVING ACCOUNT OWNERSHIP AND ACCESS TO FINANCIAL INSTITUTIONS ON HOUSEHOLD LOANS IN INDONESIA

Authors

Robby Maulana, University of Indonesia - IndonesiaFollow
Chaikal Nuryakin, University of Indonesia - Indonesia

Document Type

Article

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 potential 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.

Recommended Citation

Maulana, Robby and Nuryakin, Chaikal (2021) "THE EFFECT OF SAVING ACCOUNT OWNERSHIP AND ACCESS TO FINANCIAL INSTITUTIONS ON HOUSEHOLD LOANS IN INDONESIA," Bulletin of Monetary Economics and Banking: Vol. 24: No. 3, Article 6.
DOI: https://doi.org/10.21098/bemp.v24i3.1428
Available at: https://bulletin.bmeb-bi.org/bmeb/vol24/iss3/6

First Page

465

Last Page

486

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

University of Indonesia