Determinants of the Credit Quality Decision on Retail Consumer

Suwinto Johan

Abstract


The aim of this study was to study the retail customers’ 4C (character, capacity, collateral, and capital) that affected credit quality on finance companies. This study focused on the financing of used motorcycles from 2013-2014 with the position of balance of the book per December 2015. This study used an artificial intelligence concept with the scoring system. The dependent variable was the customer credit quality that was overdue 90 days, and the independent variables were a character, capacity, collateral, and capital of the customers. This study took samples of 67,500 customers using a logistic regression test model. The empirical results showed that 4C had a significant effect on credit quality. There were 12 out of 13 variables that showed significant influence namely sex, age, length of stay, home ownership, marital status, employment status, cost ratio, motor guarantee brand, ownership status, down payment, and tenor. This significance was tested with a 5 percent confidence level. Income did not have a significant effect.

DOI: https://doi.org/10.26905/jkdp.v21i4.1581


Keywords


Credit Quality; Consumer Behavior; Financing Institution; Retail Consumer; 4C Analysis

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References


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DOI: https://doi.org/10.26905/jkdp.v21i4.1581

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Jurnal Keuangan dan Perbankan (Journal of Finance and Banking)

Diploma Program of Banking and Finance, Faculty of Economics and Business, University of Merdeka Malang

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