Abstract
Debt culture is considered synonym amongst the low income household group. There are researches that indicate that loans amongst the low income household group, is not only with the purpose of fulfilling basic needs, but also for higher needs. If we explored from the hierarchy needs that introduced by Maslow (1954), there are five levels of needs required to be fulfilled, including social needs and self-esteem. According to the Maslow theory, individuals who can fulfill all of their needs is considered a healthy person, whereas those who are unable to fulfill their needs is at risk of being unhealthy or maybe sick in the human dimension. Therefore,humans in their effort to fulfil needs and desire would always find the best solution, even if they have to be in debt. Due to the passing of time, being in debt to fulfill a higher need is considered to be fair. Therefore, this research is conducted to observe the influence of social relationships and self-esteem towards the purchase of non-essential needs and the intention to add more debt among low-income groups in the plantation sector in Sabah. The word tahsiniyyat used in this study refer to non-basic expenses which is a requirement of the form of comfort and beauty. By using a questionnaire, we get 378 responses from low-income household individuals. The data analysis was carried out through Partial Least Squares-Structural Equation Modeling (PLSSEM) techniques by using the SmartPLS 2.0 M3 software. The results were statistically demonstrated their positive significant relationships between social relationships and selfesteem towards debt spending of tahsiniyyat needs and debt intention. This research is very beneficial in predicting debt behaviour among low-income group and useful to the monetary policy maker in order to implement the policy and assist this group. A few policy implications as well as suggestions were also discussed in this research.
Highlights
Nowadays, the public dependency towards debt is worrisome (Nurshahirah et al, 2013)
2019 with low income, till middle class and elite. ―Utusan Online‖ dated 4 March 2016 reported that Manulife Index Sentiment Investors (MISI) research found that 68 percent of Malaysians are burdened with debt, the highest value among eight areas that are explored in Asia and more than 2 times more than the regional average by 33 percent
Figure 2 shows the results of the analysis of the hypothesis model that meets the criteria of measurement model evaluation based on the Partial Least Squares-Structural Equation Modeling (PLS-SEM) analysis procedure based on the Smart-PLS 2.0 M3 software
Summary
―Utusan Online‖ dated 4 March 2016 reported that Manulife Index Sentiment Investors (MISI) research found that 68 percent of Malaysians are burdened with debt, the highest value among eight areas that are explored in Asia and more than 2 times more than the regional average by 33 percent. Estimated average of debt in Malaysia is RM56, 000 which is 10 times higher than the average individual personal income. This scenario is proven based on the Bank Negara (BNM, 2010) Report that records the ratio debt of a household to the country‘s income which increased dramatically to 76.6 percent in the year 2009 and this number has put Malaysia as a country with the highest percentage in Asia (not including Japan).
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