Abstract
PurposeThe purpose of this paper is to develop a model for studying the propensity towards indebtedness in Malaysia using behavioural factors.Design/methodology/approachA self-administered questionnaire was distributed among Malaysians who work in Klang Valley, Kuala Lumpur. The questionnaire contained several demographic variables and four behavioural factors: financial literacy, risk perception, materialism and emotions. A total of 201 completed questionnaires were received and the data were tested using structural equation modelling with partial least squares.FindingsThis study found that emotion and materialism are statistically significant for a propensity towards indebtedness, while financial literacy and risk perceptions are insignificant for a propensity towards indebtedness.Originality/valueThe results of this study would be useful in helping design better models for credit offerings and addressing credit problems in the long run.
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