SOCIO-DEMOGRAPHIC DETERMINANTS OF CREDIT RATIONING AT BAITUL MAAL WA TAMWIL IN INDONESIA
This study seeks to identify credit rationing socio-demographic determinants to Islamic microfinance to achieve welfare improving goals in three Bottom of the Economic Pyramid (BOP) regions: Yogyakarta, East Lombok and Makassar, South Sulawesi, Indonesia. Another primary focus of this study is to hi...
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| Format: | Article |
| Language: | English |
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Bank Indonesia
2019-11-01
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| Series: | Journal of Islamic Monetary Economics and Finance |
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| Online Access: | http://jimf-bi.org/index.php/JIMF/article/view/1156 |
| Summary: | This study seeks to identify credit rationing socio-demographic determinants to
Islamic microfinance to achieve welfare improving goals in three Bottom of the
Economic Pyramid (BOP) regions: Yogyakarta, East Lombok and Makassar, South
Sulawesi, Indonesia. Another primary focus of this study is to highlight the suggested
solutions from Islamic microfinance practitioners to overcome the challenges in the
practice of credit rationing assessment. 2,650 borrowers at the BOP in 26 Islamic
Microfinance Institutions (MFIs) in Indonesia were selected based on cluster sampling
and purposive sampling methods. A questionnaire is adapted from several previous
studies. Multinomial logistics regression is used in this paper. Results show that the
determinant of credit rationing based on socio-demographic factors, reflecting certain
socio-demographic factors that include age, gender, account balance, dependents,
salary, monthly income, formal education, access to financing facility in the previous
year, distance, and years of saving, has significant influence on the probability of
getting financing. Thus, in order to reduce the credit-rationing problem, the major
implications from this study are that Baitul Maal wa Tamwil (BMT) should enhance
the participation of women, using monthly income rather than salary determinants,
provide credit plus financing and realize a one village one BMT program. The solutions
would enhance the participation of BOP borrowers at BMT. |
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| ISSN: | 2460-6146 2460-6618 |