Examining financial attitude, personality traits and mediating factor of financial literacy towards level of indebtedness

• मुख्य लेखक: Zaidi, Mohammad
• स्वरूप: थीसिस
• भाषा: अंग्रेज़ी; अंग्रेज़ी
• प्रकाशित: 2022
• विषय: HG Finance
• ऑनलाइन पहुंच: https://etd.uum.edu.my/10649/1/permission%20to%20deposit-grant%20the%20permission-s902797.pdf; https://etd.uum.edu.my/10649/2/s902797_01.pdf

This study attempted to examine the relationship between financial attitudes, personality traits and mediating factors of financial literacy with the level of indebtedness. The survey involved 600 respondents who visited Credit Counselling and Debt Management Agency (AKPK) Kuala Lumpur Branch to restructure their existing loans with various financial institutions. 600 self-administered questionnaires were distributed, from which only 480 were used for further analysis. The data were analysed through Structural Equation Modelling (SEM) using the AMOS (Analysis of Moment Structures) software. This study found that financial attitude was significantly and negatively correlated with the level of indebtedness. This finding indicated that with a positive financial attitude, the level of indebtedness could be reduced. Besides that, financial literacy mediated the relationship between financial attitude and indebtedness; however, the mediating effect was small. The latent constructs for personality traits in this study, which consisted of formative constructs of agreeableness, extraversion, conscientiousness, neuroticism, and openness to experience, were found to have significant correlations with the level of indebtedness; however, the relationships were weak. Neuroticism had the weakest relationship with the level of indebtedness. This indicated that neuroticism was associated with a low level of indebtedness as compared to other traits. Additionally, financial literacy was also found to mediate the relationship between personality traits and the level of indebtedness. The main contribution of the study was in determining the influence of psychological factors besides financial literacy towards the level of indebtedness. The study's limitation was that it involved respondents who were presumably having financial problems who came to AKPK to restructure or reschedule their existing loans with banks and financial institutions. For future research, the same model can be applied to other populations in different geographical areas.