FACTORS INFLUENCING THE DETERMINATION OF THE PROBABILITY OF BORROWING FROM THE VILLAGE AND URBAN COMMUNITY FUND
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Abstract
This research is aimed to study (1) the roles of village and urban community fund, and (2) the influencing factors in determining the probability of borrowing from the village and urban community fund. The secondary data were collected from the Office of National Village and Urban Community Fund and the Office of Socio and Economic Statistics that made a survey of 55,854 households in the 2019 year. The data was classified into 4 occupational groups that borrowed and did not borrow from the village and urban community fund.
The roles of village and urban community fund were analyzed by document and content analysis and the influencing factors in determining the probability of borrowing from the village and urban community fund were analyzed with the use of Logistic Regression. Also, the Propensity Score Matching (PSM) of the group borrowing and the group not borrowing from the village and urban community fund was used to correct the selection bias.
The results of studying the roles of the village and urban community fund show that the fund is an important mechanism of the government in accordance with economic stimulus measurement at the grass root level. The fund performs as a source of revolving capital for members across the country for investment, career development, job creation, income generation, and alleviating urgent community needs.
The results of the study on factors influencing the determination of borrowing probability from the fund show that (1) financial assets and the highest level of education in grade 6 influence the determination of the probability of borrowing across all occupational groups; (2) the number of family members influences the determination of the probability of borrowing in the non-economically active occupation group and the non-agricultural entrepreneur group; (3) the highest level of education in grade 12 influences the determination of the probability of borrowing in the professional worker group and the agricultural worker group; and (4) the higher than grade 12 level of education influences the determination of the probability of borrowing in the professional worker group and the non-agricultural entrepreneur group.
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