The Role of Family Networks and Gender on Borrowing Behavior in Indonesia

Johar, M; Rammohan, A

The Role of Family Networks and Gender on Borrowing Behavior in Indonesia

Johar, M

Rammohan, A

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Publication Type:: Journal Article
Citation:: The Journal of Developing Areas, 2011, 45 (1), pp. 111 - 134
Issue Date:: 2011

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Field	Value	Language
dc.contributor.author	Johar, M https://orcid.org/0000-0002-2381-1741	en_US
dc.contributor.author	Rammohan, A	en_US
dc.date.issued	2011	en_US
dc.identifier.citation	The Journal of Developing Areas, 2011, 45 (1), pp. 111 - 134	en_US
dc.identifier.issn	0022-037X	en_US
dc.identifier.uri	http://hdl.handle.net/10453/17384
dc.description.abstract	In this paper, we use the nationally representative Indonesian Family Life Survey dataset (IFLS-3), to examine if access to loans from informal networks such as family and friends influences borrowing behavior in formal credit markets. Our empirical results show that there is a gender dimension to borrowing behavior, with females being more likely to receive loans from family members. However, access to loans from family does not lower their propensity to seek out formal credit. For males, access to family loans does not affect borrowing propensity but it increases the size of borrowing from the formal sector. From a policy perspective, our results indicate that education plays an important role in improving an individual's access to financial credit markets and reducing their dependence on internal networks.	en_US
dc.relation.ispartof	The Journal of Developing Areas	en_US
dc.subject.classification	Development Studies	en_US
dc.title	The Role of Family Networks and Gender on Borrowing Behavior in Indonesia	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	45	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	open_access
pubs.consider-herdc	false	en_US
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	45	en_US

Abstract:

In this paper, we use the nationally representative Indonesian Family Life Survey dataset (IFLS-3), to examine if access to loans from informal networks such as family and friends influences borrowing behavior in formal credit markets. Our empirical results show that there is a gender dimension to borrowing behavior, with females being more likely to receive loans from family members. However, access to loans from family does not lower their propensity to seek out formal credit. For males, access to family loans does not affect borrowing propensity but it increases the size of borrowing from the formal sector. From a policy perspective, our results indicate that education plays an important role in improving an individual's access to financial credit markets and reducing their dependence on internal networks.

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http://hdl.handle.net/10453/17384