Determinants of Community Decisions To Lend Money To Loaners

Abstract

Purpose: To meet the needs of the public, the government has provided an official financial institution, which is subject to a certain series of administrations with all the calculations. The problem is that not all community members understand access to finance at these financial institutions. There are Islamic banking, BMT, and Sharia KSPPS, but in borrowing money they choose moneylenders. This problem is influenced by the ease of borrowing money from moneylenders, which are more flexible and the method of payment can be adjusted according to a special agreement between the customer and the moneylender. Disbursement of funds that can be done at any time according to the time needed, without being bound by conditions that are considered complicated by the customer. As a form of compensation, the interest charged by moneylenders is high and burdensome for the borrower. The risk of high-interest rates is often not taken into account by the borrower.
 
 Design/Methodology/Approach: The method for developing public financial literacy is what the moneylender's practice as the object of observation. To be realized as an effort for educational methods is to conduct an analysis of moneylenders in the community and explore how people depend on moneylenders, evaluate financial behavior in the community, deconstruct financial behavior and re-conceptualize public financial behavior.
 
 Findings: Socialization and acceleration of the marketing of financial products from the BMT, or official government financial institutions need to be carried out to prevent the level of community dependence on moneylenders, including by expanding financial literacy in the community, establishing management education methods, and implementing finance that is more inclusive in the community.
 
 Research, Practical & Social Implications: The necessities of life for each individual in the community will certainly not be the same, to be able to fulfill the purpose of these needs it is financed by the availability of funds or financial means. There are members of the community who are relatively able to meet their financing needs, but not a few of the community have not met their needs.
 
 Originality/Value: This study seeks to help the government and society in Indonesia to have a good education in terms of financial literacy, people need information and knowledge that currently in Indonesia there are many formal and legal financial institutions to help financial problems faced by people in Indonesia. Indonesian people are no longer just dependent on moneylenders or illegal financial institutions, which will instead trap them into new financial problems.

Systematic Literature Review of The Role of Islamic Financial Institutions Towards the Growth of Islamic Public Finance

“…Research about shark lenders in Indonesia was done by (Sungkawaningrum et al, 2022). It explored how people are dependent on shark lenders, evaluates the financial behavior of the people, deconstructs financial behavior, and reconceptualizes societal financial behavior.…”

“…Therefore, it is necessary to carry out public campaigns and accelerate the marketing of financial services from Islamic microfinance institutions or governmental financial institutions to prevent the dependence of society on moneylenders. This can be achieved by improving financial literacy of the people, creating education methods in financial management, and applying more inclusive financial practices in the community (Sungkawaningrum et al, 2022).…”

“…The approaches used in these studies to identify the roles of IFI in facilitating the growth of IPF include qualitative methods such as integrative analysis, content analysis, library research, observation, and semistructured interviews (Abdul Aris et al, 2013;Azrai Azaimi Ambrose et al, 2018;Barom, 2019;Raja Adnan et al, 2022;Sungkawaningrum et al, 2022). Additionally, quantitative approaches such as exploratory quantitative methods and multiple regression analysis were also employed (Kannaiah et al, 2017;Shaikh, 2017).…”

“…Furthermore, the factors influencing the roles of IFI in facilitating the growth of IPF include financial literacy, socialization, and accelerated marketing of IFI financial products (Kannaiah et al, 2017;Sungkawaningrum et al, 2022), waqf as an alternative source of financing for the government (Azrai Azaimi Ambrose et al, 2018), private-public cooperation in the form of mudarabah for waqf governance (Raja Adnan et al, 2022) and zakah to address inequality and funding deficits (Shaikh, 2017).…”

Development model of integrated development post for non-communicable diseases in West Java of Indonesia

“…21 The necessities of life for each individual in the community will certainly not be the same, to be able to fulfill the purpose of these needs it is financed by the availability of funds or financial means. 22…”