Credit Limit of Unsecured Consumer Lending: Evidence from Micro Data

Suwinto Johan and Calista Dewi
Additional contact information
Suwinto Johan: Faculty of Business, President University, Indonesia

Economics and Finance in Indonesia, 2021, vol. 67, 51-62

Abstract: As credit card debts have increased in Indonesia over the past ten years, concerns over the impulsive buying behavior of Indonesian credit card holders have emerged. Therefore, more attention must be paid to credit risk management of banks as it plays an important role in analyzing the possibility of losses due to the inability of prospective borrowers to repay debts. This study provides empirical evidence about the prudence of commercial banks in Greater Jakarta in offering credit card limits. Using primary micro-data collected from credit card applications submitted to the largest foreign private bank providing retail credit in the Greater Jakarta area in 2019, this study employed multiple regression model to analyze the determinants of credit card limits in the Greater Jakarta. Our empirical findings suggest that age, home location, income, type of industry, and office location of prospective borrowers significantly influence credit card limits. Commercial banks in the Greater Jakarta, thus, have been prudent in offering credit card limits.

Keywords: credit card; credit limit; consumer debt; impulsive buying; credit risk management (search for similar items in EconPapers)
JEL-codes: G21 G40 O16 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://lpem.org/repec/lpe/efijnl/202104.pdf (application/pdf)

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:lpe:efijnl:202104

Access Statistics for this article

More articles in Economics and Finance in Indonesia from Faculty of Economics and Business, University of Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Muhammad Halley Yudhistira ( this e-mail address is bad, please contact ).