A Strategy to Overcome Loandependency to the Moneylenders (Research of Employees at Industrial Companies in Banten Province)

Abstract

One of the economic diseases of society in human civilization is usury. Difficulties in a community in the lending money to some financial industry services, especially in the banking industry, have become a target for a moneylender in offering their services. The moneylenders’ main motivation was to make other people's difficulties in a business field that benefits themselves. The dilemma of people's socio-economic life, especially among company employees, was related to financial problems, it caused employees to need sudden funds to meet their daily needs. This research aimed to analyze the effect of religiosity factor, cultural factor, social factor, personal factor, psychological factor, and the existence of Sharia Micro Finance Institution (SMFI) on loan dependency to the moneylenders, this research aimed to formulate a strategy to overcome loan dependency to the moneylenders. The type of research method in this paper was a combination of the type of investigation and the unit of analysis because this research analyzed the effect and simultaneous relationship between several studied variables using cross-section type data. The methods used in this research were SEM (Structural Equation Modeling).The results showed that religiosity factor, cultural and social factors did not have a significant effect on loan decision making. Meanwhile, personal factor, psychological factor, and the existence of SMFI factor have a significant effect on loan decisions. To reduce the dependency of employees on taking loan from the moneylenders, companies are expected to provide awareness of saving and caring for others through Islamic philanthropy. The Novelty in this research was that the religiosity factor did not have a significant effect on loan dependency to the moneylenders for employees at industrial companies in Banten.

Keywords: moneylenders, usury, structural equation modeling

DOI: 10.7176/EJBM/13-6-05

Publication date:March 31^st 2021