The Analysis of Risk Profile and Financial Vulnerability of Households in Indonesia

Abstract

This paper identifies the vulnerability of household in Indonesia using both Balance Sheet and Financial Margin Approaches with coping strategy analysis in response to financial pressure. The result concluded that the household sector is solvent and sound with high interconnectivity with the non-financial corporation, particularly with banks. The heatmap coping strategies are in the moderate zone. However, it cumulatively tends to change to a high and extreme zone which potentially creates imbalances in the financial system in Indonesia.

An empirical analysis on household financial vulnerability in India: exploring the role of financial knowledge, impulsivity and money management skills

“…Three self-reported parameters, that is, (1) make the ends meet, (2) perception of unexpected expenditure and (3) perception of unexpected income shock were selected to calculate the index. Though the choice of measures used for constructing this FVI is critical, one can choose objective (Bialowolski and Weziak-Bialowolska, 2014;Moret, 2014;Ali et al, 2020) or subjective (Anderloni et al, 2012;Daud et al, 2019) or both measures for calculating FVI (Anderloni et al, 2012;Abubakar et al, 2018;Noerhidajati et al, 2021). In this regard, considering self-reported measures for financial vulnerability may provide useful inputs for policy formulation purposes.…”

“…, 2019) or both measures for calculating FVI (Anderloni et al. , 2012; Abubakar et al. , 2018; Noerhidajati et al.…”