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Determinants of financial vulnerability among credit counselling and debt management agency customers

During the turbulent time where financial and economic are being unstable, a growing number of households are facing difficulties in making ends meet and not resilient to cope with unexpected expenses. These households are deemed to be financially vulnerable, and the financial vulnerability of house...

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Main Author: Chong, Kok Fei
Format: Thesis
Language:English
Published: 2021
Subjects:
Finance, Personal
Consumer credit - Management
Online Access:http://psasir.upm.edu.my/id/eprint/98434/1/FEM%202021%2013%20UPMIR.pdf
http://psasir.upm.edu.my/id/eprint/98434/
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spelling my.upm.eprints.984342022-09-05T03:11:09Z http://psasir.upm.edu.my/id/eprint/98434/ Determinants of financial vulnerability among credit counselling and debt management agency customers Chong, Kok Fei During the turbulent time where financial and economic are being unstable, a growing number of households are facing difficulties in making ends meet and not resilient to cope with unexpected expenses. These households are deemed to be financially vulnerable, and the financial vulnerability of households can exert undesired impacts on economic growth and societal problems. In order to curb the financial vulnerability issue, the primary objective of this study is to investigate the factors influencing financial vulnerability among Malaysian households. Two theories, namely family resource management model and self-efficacy theory were employed to serve as the basis of the research fieldwork. Four factors were proposed as relevant elements in the process of reducing financial vulnerability. This study proposes the input (i.e., self-efficacy, financial literacy, gender, and age), throughput (i.e., financial behavior) and output (financial vulnerability) mechanism. In addition, this study further examines the moderating effect of self-efficacy in the relationship between financial literacy and financial behavior. In terms of data collection, a multi-stage random sampling technique was used to sample a total of 640 usable responses from AKPK centers in Malaysia. After discarding unusable responses, the collected data was analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM). The study followed standard of PLS-SEM guideline by examining measurement model before proceeding to structural model. The results indicated all the measurements were satisfactory in terms of reliability and validity. The model explained sufficient variance of financial vulnerability (R²= 0.292). Results indicated that gender (β= -0.07, p≤ 0.05) and self-efficacy (β= 0.44, p≤ 0.05) significantly influences financial behavior. Financial behavior negatively influences financial vulnerability (β= -0.54, p≤ 0.05). The mediating effect of financial behavior in the relationship between self-efficacy and financial vulnerability was identified (β= -0.24, p≤ 0.05). The finding supports the moderating effect of self-efficacy in the relationship between financial literacy and financial behavior (β= 0.12, p≤ 0.05), indicating that the relationship between financial literacy and financial behavior is stronger when self-efficacy of Malaysian households is high. Other than that, the relationship between financial literacy and financial vulnerability was not significant (p≥0.05). The findings obtained from the analysis were in good agreement with relevant theories, and adds to the findings of previous studies. Besides offering some important implications to the scholarly works, this study also provides a predictive model that presents insightful implications for households and policy makers, particularly regarding the important yet overlooked role of self-efficacy and overrated role of financial literacy. Lastly, limitations of the study and recommendations for further research were outlined. 2021-01 Thesis NonPeerReviewed text en http://psasir.upm.edu.my/id/eprint/98434/1/FEM%202021%2013%20UPMIR.pdf Chong, Kok Fei (2021) Determinants of financial vulnerability among credit counselling and debt management agency customers. Doctoral thesis, Universiti Putra Malaysia. Finance, Personal Consumer credit - Management
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
topic Finance, Personal
Consumer credit - Management
spellingShingle Finance, Personal
Consumer credit - Management
Chong, Kok Fei
Determinants of financial vulnerability among credit counselling and debt management agency customers
description During the turbulent time where financial and economic are being unstable, a growing number of households are facing difficulties in making ends meet and not resilient to cope with unexpected expenses. These households are deemed to be financially vulnerable, and the financial vulnerability of households can exert undesired impacts on economic growth and societal problems. In order to curb the financial vulnerability issue, the primary objective of this study is to investigate the factors influencing financial vulnerability among Malaysian households. Two theories, namely family resource management model and self-efficacy theory were employed to serve as the basis of the research fieldwork. Four factors were proposed as relevant elements in the process of reducing financial vulnerability. This study proposes the input (i.e., self-efficacy, financial literacy, gender, and age), throughput (i.e., financial behavior) and output (financial vulnerability) mechanism. In addition, this study further examines the moderating effect of self-efficacy in the relationship between financial literacy and financial behavior. In terms of data collection, a multi-stage random sampling technique was used to sample a total of 640 usable responses from AKPK centers in Malaysia. After discarding unusable responses, the collected data was analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM). The study followed standard of PLS-SEM guideline by examining measurement model before proceeding to structural model. The results indicated all the measurements were satisfactory in terms of reliability and validity. The model explained sufficient variance of financial vulnerability (R²= 0.292). Results indicated that gender (β= -0.07, p≤ 0.05) and self-efficacy (β= 0.44, p≤ 0.05) significantly influences financial behavior. Financial behavior negatively influences financial vulnerability (β= -0.54, p≤ 0.05). The mediating effect of financial behavior in the relationship between self-efficacy and financial vulnerability was identified (β= -0.24, p≤ 0.05). The finding supports the moderating effect of self-efficacy in the relationship between financial literacy and financial behavior (β= 0.12, p≤ 0.05), indicating that the relationship between financial literacy and financial behavior is stronger when self-efficacy of Malaysian households is high. Other than that, the relationship between financial literacy and financial vulnerability was not significant (p≥0.05). The findings obtained from the analysis were in good agreement with relevant theories, and adds to the findings of previous studies. Besides offering some important implications to the scholarly works, this study also provides a predictive model that presents insightful implications for households and policy makers, particularly regarding the important yet overlooked role of self-efficacy and overrated role of financial literacy. Lastly, limitations of the study and recommendations for further research were outlined.
format Thesis
author Chong, Kok Fei
author_facet Chong, Kok Fei
author_sort Chong, Kok Fei
title Determinants of financial vulnerability among credit counselling and debt management agency customers
title_short Determinants of financial vulnerability among credit counselling and debt management agency customers
title_full Determinants of financial vulnerability among credit counselling and debt management agency customers
title_fullStr Determinants of financial vulnerability among credit counselling and debt management agency customers
title_full_unstemmed Determinants of financial vulnerability among credit counselling and debt management agency customers
title_sort determinants of financial vulnerability among credit counselling and debt management agency customers
publishDate 2021
url http://psasir.upm.edu.my/id/eprint/98434/1/FEM%202021%2013%20UPMIR.pdf
http://psasir.upm.edu.my/id/eprint/98434/
_version_ 1743108568104566784
score 13.211869

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