Proceedings of the International Conference on Advance Research in Social and Economic Science (ICARSE 2022)

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Shared Responsibility System Fails: Group Loans Have Higher Credit Risk in Microfinance Institutions

Authors
Akhmad Syari’udin1, *, Rini Dwi Astuti1, Sri Dwi Ari Ambarwati1, Dyah Ayu Irawati1, Thala Nugra Muharam1
1Universitas Pembangunan Nasional Veteran Yogyakarta, JL. SWK 104, Condong Catur, Yogyakarta, 55283, Indonesia
*Corresponding author. Email: sariudin2003@gmail.com
Corresponding Author
Akhmad Syari’udin
Available Online 27 April 2023.
DOI
10.2991/978-2-38476-048-0_22How to use a DOI?
Keywords
Credit risk; microfinance institutions; group loans; shared responsibility; education
Abstract

This study aimed to examine the credit risk in microfinance institutions in Gunungkidul Regency, considering both internal and external factors that may affect the repayment ability of borrowers. The study used the Ordered Logit Model analysis to investigate the relationship between credit risk and loan types, gender, and education level of borrowers. The results indicated that group loans had a higher level of credit risk compared to individual loans, indicating that the shared responsibility system, which should encourage group members to repay loans on time, has become less effective. Moreover, male borrowers were found to be more at risk of default than female borrowers, and higher education levels were associated with lower credit risk. These findings have important implications for microfinance institutions to improve their credit risk management strategies and develop more effective loan products to minimize the credit risk of borrowers.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Advance Research in Social and Economic Science (ICARSE 2022)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
27 April 2023
ISBN
978-2-38476-048-0
ISSN
2352-5398
DOI
10.2991/978-2-38476-048-0_22How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Akhmad Syari’udin
AU  - Rini Dwi Astuti
AU  - Sri Dwi Ari Ambarwati
AU  - Dyah Ayu Irawati
AU  - Thala Nugra Muharam
PY  - 2023
DA  - 2023/04/27
TI  - Shared Responsibility System Fails: Group Loans Have Higher Credit Risk in Microfinance Institutions
BT  - Proceedings of the International Conference on Advance Research in Social and Economic Science (ICARSE 2022)
PB  - Atlantis Press
SP  - 196
EP  - 202
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-048-0_22
DO  - 10.2991/978-2-38476-048-0_22
ID  - Syari’udin2023
ER  -