Proceedings of the International Conference on Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2024)

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The Impact of Debt Literacy on Over-Indebtedness of Buy Now Pay Later (BNPL) Users in West Java

Authors
Astrie Krisnawati1, *, Dzikra Malika Rabbani Sam1
1Faculty of Economics and Business, Telkom University, Bandung, Indonesia
*Corresponding author. Email: astriekrisnawati@telkomuniversity.ac.id
Corresponding Author
Astrie Krisnawati
Available Online 19 November 2024.
DOI
10.2991/978-94-6463-558-4_12How to use a DOI?
Keywords
Debt Literacy; Multinomial Logistic Regression; Over-indebtedness; Pay Later
Abstract

This paper examines the impact of debt literacy on the over-indebtedness of Buy Now Pay Later (BNPL) users in West Java. BNPL is widely used in Indonesia as a short-term loan option, with West Java having the highest number of users. BNPL services have a high non-performing loan (NPL) level, exceeding the threshold set by Otoritas Jasa Keuangan (OJK), Indonesia’s financial services authority. It indicates a need to consider the NPL level of BNPL services. One major cause of high NPL is over-indebtedness and financial knowledge as a determining factor of over-indebtedness. Therefore, debt literacy is one of the financial knowledge components assessed to fit the context of BNPL services. The questionnaire was distributed to 400 BNPL users in West Java. Data analysis using multinomial logistic regression assessed the impact of debt literacy on over-indebtedness. Findings reveal that BNPL users have low debt literacy levels. Additionally, the study indicates that higher debt literacy reduces the probability of over-indebtedness. It suggests that the government and financial services authorities should promote programs to increase financial literacy with a specific focus on debt literacy to enhance financial welfare and reduce the high-level NPL.

Copyright
© 2024 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 Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
19 November 2024
ISBN
978-94-6463-558-4
ISSN
2352-5428
DOI
10.2991/978-94-6463-558-4_12How to use a DOI?
Copyright
© 2024 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  - Astrie Krisnawati
AU  - Dzikra Malika Rabbani Sam
PY  - 2024
DA  - 2024/11/19
TI  - The Impact of Debt Literacy on Over-Indebtedness of Buy Now Pay Later (BNPL) Users in West Java
BT  - Proceedings of the International Conference on Sustainable Collaboration in Business, Technology, Information, and Innovation (SCBTII 2024)
PB  - Atlantis Press
SP  - 203
EP  - 213
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-558-4_12
DO  - 10.2991/978-94-6463-558-4_12
ID  - Krisnawati2024
ER  -