Household debt has a significant role in influencing financial stability. This study aims to determine the impact of household characteristics and interest rates on household credits. Furthermore, determine the impact of the amount of LTV policies on interest rates on growth and potential risks of home loans and household credits. The study uses data from the Financial Services Authority (OJK), namely Financial Institution Information System, and data Household Balance Survey from 2017 to 2019. This study uses two steps: ordinary least squares (OLS) and autoregressive distributed lag (ARDL). In the OLS regression, household credit is the dependent variable, and collectability and income class are independent dummy variables. Analysis with time series regression using ARDL. The estimation results show that the increase in household credit is influenced by the characteristics of income, age, and interest rates. For household credits above quantile 0.75, interest rates do not affect the household. In the short term, loosening LTV will increase home loan growth and encourage an increase in potential credit risk. In the long term, losing LTV will increase housing loan growth and the potential threat. The study recommends using interest rates and LTV to encourage household credit, including home loans.
Purpose This study aims to examine how crude palm oil (CPO) price impacts corporate default risk (CDR) of agricultural firms in Indonesia’s palm oil industry. Design/methodology/approach By applying a dynamic panel regression on listed CPO-based firms, the authors find that CPO price fluctuations are insignificant in explaining CDR. Findings The main determinants of CDR are internal factors, namely, excess stock market returns and return on assets. External factors do not play any role in influencing the CDR in the case of Indonesia. The results highlight the importance of completing risk analysis at the macro level with firm-specific factors. Research limitations/implications The contributions aside, an important limitation of this study is that there is a small sample of listed firms. Most of these firms have the ability to mitigate risks. Therefore, further studies are needed to identify the default predictions for non-listed firms. Practical implications In the context of macro prudential policy in Indonesia, the findings imply that financial stability surveillance needs to be carried out in two areas: macroeconomic indicators and firm-specific indicators. Given the lack of listed CPO firms in Indonesia, the object of surveillance should focus on not only listed firms but also non-listed firms with large bank loans. Originality/value This study highlights the importance of completing risk analysis at the macro level with firm-specific factors in Indonesia as commodity exporting country.
Household debt has a significant role in influencing financial stability. This study aims to determine the impact of household characteristics and interest rates on household credits. Furthermore, determine the impact of the amount of LTV policies on interest rates on growth and potential risks of home loans and household credits. The study uses data from the Financial Services Authority (OJK), namely Financial Institution Information System, and data Household Balance Survey from 2017 to 2019. This study uses two steps: ordinary least squares (OLS) and autoregressive distributed lag (ARDL). In the OLS regression, household credit is the dependent variable, and collectability and income class are independent dummy variables. Analysis with time series regression using ARDL. The estimation results show that the increase in household credit is influenced by the characteristics of income, age, and interest rates. For household credits above quantile 0.75, interest rates do not affect the household. In the short term, loosening LTV will increase home loan growth and encourage an increase in potential credit risk. In the long term, losing LTV will increase housing loan growth and the potential threat. The study recommends using interest rates and LTV to encourage household credit, including home loans.
In a pandemic situation, the role of financial inclusion and macroprudential policies are very important for mitigating household vulnerabilities. This study analyzes the role of financial inclusion on household consumption during the pandemic using Indonesian household data at the micro-level and analyzing differences in consumption during a pandemic and macroprudential policies loosening period. This study uses descriptive analysis and logistic regression. The study shows that households who receive formal financial services, especially access to household credit, reduce the chances of being vulnerable during a pandemic. Furthermore, increases in GDP, education, and social assistance also reduce households' chances of vulnerability.Meanwhile, the decrease in the share of consumption of housing and household facilities to total expenditure occurred after implementing the Loan to Value (LTV) tightening. The increase in the share of housing and household facilities consumption also occurred after implementing the LTV loosening. This study recommends strengthening financial inclusion to mitigate the potential vulnerability of households during economic pressure. In addition, the LTV policy can be used as one of a countercyclical instrument.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.