Journal of Applied Structural Equation Modeling, Volume 3 Issue 1 – Published online: Jan 2019

Dicky Wiwittan Toto Ngadiman*, Jabatan Perdagangan, Politeknik Kota Kinabalu, Malaysia
Salmy Edawaty Yacoob, Fakulti Pengajian Islam, Universiti Kebangsaan Malaysia
Hairunnizam Wahid, Fakulti Ekonomi & Pengurusan, Universiti Kebangsaan Malaysia
Corresponding Author: Dicky Wiwittan Toto Ngadiman | Email: [email protected]
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 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 fulfil all of their needs is considered a healthy person, whereas those who are unable to fulfil 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 fulfil 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 refers 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 (PLS-SEM) techniques by using the SmartPLS 2.0 M3 software. The results were statistically demonstrated their positive significant relationships between social relationships and self-esteem 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 policymaker in order to implement the policy and assist this group. A few policy implications, as well as suggestions, were also discussed in this research.
Keywords: social relationships, self-esteem, tahsiniyyat goods, debt intention, low-income group.
Citation: Ngadiman, D. W. T., Yacoob, S. E., & Wahid, H. (2019), The influence of self-esteem and social relationships towards the debt behaviour. Journal of Applied Structural Equation Modeling. 3(1), 43-54

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