Factors Affecting the Informal Debt of People in Bangkok and Vicinity

Abstract

The objectives of this research were to study: 1) the personal factors of people in Bangkok and vicinity who borrowing informal debt. 2) investigate the personal and behavioral factors affecting the informal debt of people in Bangkok and vicinity. A questionnaire was used to collect the data from 400 samples. The descriptive statistics method was applied to analyze the obtained data to describe the characteristics of the people borrowing informal debt, whereas inferential statistics, Heckman two-step model, were used to explain the personal and behavioral factors influencing the informal debt of people in Bangkok and vicinity. The results illustrated that: 1) most of the debtors were female aged under 31 years who had graduated with junior high school. They work as merchants and earned under 7,000 baht per month. Most of them were divorced or separated with more than five family members, two dependents, and/or retired people. 2) the factors affecting the informal debt of people in Bangkok and vicinity were female gender, services of the informal debt sources, occupation, income per person, marital status, accessibility to a formal loan, number of family members, and behavioral factor, respectively.