Determinants of Indebtedness: Influence of Behavioral and Demographic Factors

International Journal of Financial Studies, 2020

13 Pages Posted: 5 Jun 2020

Date Written: February 10, 2020


This study aims to examine the influence of behavioral and demographic factors on indebtedness by constructing a model using specific determinants. The exploratory method is used through the partial least square (SmartPLS) technique, by surveying 320 respondents in Kuala Lumpur, Malaysia. A self‐administered questionnaire was administered to respondents, addressing both demographic and behavioral factors. The results confirmed four of the eight hypotheses stated. Among the determinants, risk perception had a highly significant relationship with both materialism and emotion, while indebtedness had a relationship with emotion and materialism. The findings also indicated that significant differences exist between indebtedness and behavioral factors on the basis of gender, marital status, age, income, and dependence on credit cards and loans. The results may assist various economic players to design better models for credit offerings and address the credit problem in the long term.

Keywords: indebtedness, behavioral factors, demographic factors, Malaysia

JEL Classification: G32, G110, M300

Suggested Citation

Masud, Md. Abdul Kaium, Determinants of Indebtedness: Influence of Behavioral and Demographic Factors (February 10, 2020). International Journal of Financial Studies, 2020, Available at SSRN:

Md. Abdul Kaium Masud (Contact Author)

Noakhali Science and Technology University ( email )

Department of Business Administration
Noakhali, 3814
+8801718509951 (Phone)


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