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

Robby Maulana () and Chaikal Nuryakin
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Robby Maulana: Provincial Government of West Kalimantan

Bulletin of Monetary Economics and Banking, 2021, vol. 24, issue 3, 465-486

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.

Keywords: Account ownership; Credit access; Financial inclusion; Financial institutions (search for similar items in EconPapers)
JEL-codes: E51 G21 G51 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:24:y:2021:i:3g:p:465-486

DOI: 10.21098/bemp.v24i3.1428

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