Determinants of Household Indebtedness in East Malaysia: An Evaluation

Azman, Nur Shahirah; Hamdan, Rosita; Suki, Norazah Mohd; Shari, Aminah

doi:10.1166/asl.2017.9852

Cited by 3 publications

(3 citation statements)

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“…Firms across various sectors have had to downsize their workforce (The Star Online, 2015;Balakrishnan, 2016), and such actions have detrimental effects on the well-Financial wellbeing among Malaysian households being of workers due to loss of jobs and their source of income (Helliwell et al, 2014). Meanwhile, the implications of increasing costs of living are a strain on households' purchasing power and an upsurge in the use of credit and debts (Zainol et al, 2016;Azman et al, 2017). Ultimately, these economic challenges imply that there may be an undesirable effect on the financial well-being (FWB) of Malaysians (Subramanian et al, 2014), plausibly developing into other socio-economic adversities such as increased unemployment, poverty and crime.…”

Section: Introductionmentioning

confidence: 99%

An exploratory study of financial well-being among Malaysian households

Mahdzan

Zainudin

Sukor

et al. 2020

JABES

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PurposeThe purpose of this paper is to empirically explore the financial well-being (FWB) of Malaysian households and to construct a subjective FWB index with present and future time perspectives.Design/methodology/approachData were collected from 1,867 respondents across five major regions in Malaysia. Adapting the InCharge Financial Distress/Financial Well-being (IFDFW) Scale by Prawitz et al. (2006) and the method of computing an index by Devlin (2009), this study develops an FWB index using subjective measures that include future time perspectives (retirement). The index was employed to measure the FWB across low-, middle- and high-income groups and socio-demographic characteristics.FindingsThis study finds evidence that Malaysians' FWB is at an average level (46.8). Middle-income households' FWB (46.1) flanks between the financial well-being index (FWBI) levels of the low-income (37.4) and high-income households (58.7). Across age groups, education levels and employment sectors, the FWB of Malaysians significantly varies, although not across different ethnics, religions, zones and residential areas. Overall, the results suggest that the detrimental effects of FWB are perceived by all Malaysian households nationwide regardless of their religion, ethnicity and residential areas.Practical implicationsThe results of this study complement the other well-being indices used by policymakers and may serve as a useful input for government and policymakers for them to formulate appropriate strategies to promote higher FWB of Malaysian households based on their socio-demographic characteristics.Originality/valueThis study used primary data and developed a subjective FWB index that leverages on people's perceptions of their own financial well-being while including present and future time perspectives. The main contribution of this paper is to construct an index that is easily interpretable and that complements the existing FWB indices, and to identify the segments of society that have low vis-à-vis high FWB.

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Section: Introductionmentioning

confidence: 99%

An exploratory study of financial well-being among Malaysian households

Mahdzan

Zainudin

Sukor

et al. 2020

JABES

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“…According to Azman et al (2017), in Malaysia, total household debt had increased to RM70.4bn; this increase has been driven by the outstanding debts of credit cardholders which stood at RM32,841.40m by 2015. Pineda (2017) examined estimates of the optimal debt ratio for ASEAN economies (Malaysia, Indonesia, Thailand and The Philippines) and found that increased capital inflows and lower borrowing costs following financial liberalisation spurred excessive borrowing.…”

Section: Introductionmentioning

confidence: 99%

Propensity toward indebtedness: evidence from Malaysia

Azma

Rahman

Adeyemi

et al. 2019

RBF

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Purpose The purpose of this paper is to develop a model for studying the propensity towards indebtedness in Malaysia using behavioural factors. Design/methodology/approach A self-administered questionnaire was distributed among Malaysians who work in Klang Valley, Kuala Lumpur. The questionnaire contained several demographic variables and four behavioural factors: financial literacy, risk perception, materialism and emotions. A total of 201 completed questionnaires were received and the data were tested using structural equation modelling with partial least squares. Findings This study found that emotion and materialism are statistically significant for a propensity towards indebtedness, while financial literacy and risk perceptions are insignificant for a propensity towards indebtedness. Originality/value The results of this study would be useful in helping design better models for credit offerings and addressing credit problems in the long run.

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“…Respondents understand that debt is a risky investment, so they are always careful and think about the risks of taking debit/credit before making decisions in determining debt (Styles, 2018). For this reason, respondents believe that determining priorities is the most important need in the budget (Azman et al 2015). In addition, respondents also understand that one of the investment decisions is to save regularly or periodically.…”

Section: Discussionmentioning

confidence: 99%

Indonesian Millennial Generations’ Financial Literacy in Relation to its Behavior in Investment Decision

Proceedings of the International Conference on Industrial Engineering and Operations Management

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This study aims to explain how the behavior of the millennial generation can have an impact on the financial literacy of that generation and how this literacy or knowledge then greatly affects the ability of the Indonesian millennial generation to manage and invest their funds. Data was collected using a questionnaire with a survey method. The population in this study are all millennials in Jakarta who have made investments. Using a random sampling method, questionnaires were distributed to 206 millennial respondents in several private banks in Jakarta. Partial Least Square-Structural Equation Modeling approach with Smart PLS program was used to perform data analysis. The results show that Financial Literacy has a positive and significant effect on Investment Decision, Financial Literacy has a positive and significant effect on Financial Behavior, and Financial Behavior has a positive and significant effect on Investment Decision.

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Determinants of Household Indebtedness in East Malaysia: An Evaluation

Cited by 3 publications

References 0 publications

An exploratory study of financial well-being among Malaysian households

An exploratory study of financial well-being among Malaysian households

Propensity toward indebtedness: evidence from Malaysia

Indonesian Millennial Generations’ Financial Literacy in Relation to its Behavior in Investment Decision

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