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Microcredit Accessibility in Rural Households: Evidence from Indonesia

Author

Listed:
  • Danang Budi Santoso

    (Faculty of Agribusiness and Commerce, Lincoln University, New Zealand)

  • Christopher Gan

    (Ministry of Agriculture, Republic of Indonesia)

Abstract

Extant literature suggests that microcredit may improve borrowers’ social and economic welfare. This study aimed to investigate the microcredit accessibility of rural households in Indonesia. Binary Logistic regression was used to distinguish the characteristics of microcredit borrowers and non-borrowers, and the factors affecting the approval of microcredit application. Primary data was collected through a survey on 488 rural households in Bantul, Yogyakarta. The empirical results suggested that age, marital status and education attainment significantly affect the characteristics of clients and non-clients of microcredit. The results also revealed that age of borrowers, household income, interest rates, and loan duration are key determinants affecting microcredit accessibility. The implications of the findings were provided.

Suggested Citation

  • Danang Budi Santoso & Christopher Gan, 2019. "Microcredit Accessibility in Rural Households: Evidence from Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 65, pages 67-88, Juni.
    • Handle: RePEc:lpe:efijnl:201905
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    Citations

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    Cited by:

    1. Jesmin Akhter & Kun Cheng, 2020. "Sustainable Empowerment Initiatives among Rural Women through Microcredit Borrowings in Bangladesh," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    2. Dewi Ratna Sjari Martokoesoemo & Bonar M. Sinaga & Nunung Kusnadi & Yusman Syaukat, 2020. "Business Vulnerability and Credit Access for Agriculture-Based Micro and Small Women Entrepreneurs," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 66, pages 97-111, Desember.

    More about this item

    Keywords

    microfinance; microcredit access; Indonesia; logit model;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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