THE INFLUENCE OF SELF-ESTEEM AND SOCIAL RELATIONSHIPS TOWARDS THE DEBT BEHAVIOUR

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.