Determinants of discouraged borrowers and gender as contextual factors: evidence from Indonesian MSMEs

Dhoni Rizky Widya Mardika, Theresia Woro Damayanti, Maria Rio Rita and Supramono Supramono

Cogent Business & Management, 2024, vol. 11, issue 1, 2336300

Abstract: This study aims to examine the effect of application costs, trust reciprocity, and self-efficacy on discouraged borrowers and the role of gender as a moderating variable. Our sample was 356 micro, small, and medium enterprise actors in the manufacturing industry in Central Java Province, Indonesia. The data was analyzed using the covariant-based structural equation modeling method. The results demonstrated that application costs, trust reciprocity, and self-efficacy significantly affect discouraged borrowers. However, the contextual role of gender is not fully proven because it can only weaken the self-efficacy effect of discouraged borrowers. This study enriches the literature by proposing discouraged borrowers from a demand factor perspective. In addition, it also offers policy suggestions for the banking industry to collaborate intensively with other stakeholders to increase banking digital literacy and build capacity to foster mutual trust and self-efficacy among micro, small, and medium enterprise actors.The problem of lack of access to bank credit faced by micro, small, and medium enterprises is not only related to the problem of being unable to meet bank credit needs but also due to the willingness of MSMEs themselves to choose not to apply for credit from banks because of the concern that their application will be declined or what is commonly known as discouraged borrowers. This issue must be addressed to help micro, small, and medium enterprise actors mitigate their financing obstacles through better access to bank credit. Therefore, this study aims to analyze the factors that cause micro, small, and medium enterprises to become discouraged borrowers. This study will offer several policy actions to banks and related stakeholders regarding application fees, the development of e-banking features, and banking literacy to encourage micro, small, and medium enterprises to utilize banking financing.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2024.2336300 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2336300

Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20

DOI: 10.1080/23311975.2024.2336300

Access Statistics for this article

Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar

More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().