Email this article 
Impact of Consumer Awareness on Bank Lending Services to the Buying Behavior of Millennials in Metro Manila, Philippines
Abstract
Personal financial knowledge can help financial management, resulting in financial problems and economic inequality. This research investigates the impact of millennials' awareness of bank lending services impacts their consumer buying behavior and their everyday lives. Furthermore, the study aims to assist the financial and marketing industry by analyzing empirical evidence from the millennial generation, enabling banks and financial institutions to customize their promotions and advertising. The research employed the correlational research method and structural equation model (SEM) to assess the structure of consumer buying behavior with its confounding variables, such as demographic factors and COVID-19 considerations, and the independent variable of consumer awareness. Moreover, to produce these kinds of inferences, a survey questionnaire was distributed to two hundred seventy-one respondents from the millennial generation (26 - 41 years old) to assess their awareness of financial lending products. The results indicate that internal (demographics) and external (pandemic) factors significantly influence millennials' level of awareness of bank lending services. However, only internal factors such as social class and employment status significantly impact millennials' buying behavior.
Keywords
Full Text:
PDFReferences
Adzis, A., Sheng, L., & Bakar, J. (2018). Bank lending determinants: Evidence from Malaysia commercial banks. Journal of Banking and Finance Management, 1(3), 36–48. https://www.sryahwapublications.com/journal-of-banking-and-finance-management/pdf/v1-i3/5.pdf Aguirre-Rodriguez, A., Bóveda-Lambie, A. M., & Miniard, P. W. (2015). The impact of consumer avatars in internet retailing on self-congruity with brands. Marketing Letters, 26(4), 631–641. https://doi.org/10.1007/s11002-014-9296-z Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-t Alkhazaleh, A. (2017). Factors may drive the commercial banks lending: Evidence from Jordan. Banks and Bank Systems, 12(2), 31–38. https://doi.org/10.21511/bbs.12(2).2017.03 Amin, A., Anwar, S., Adnan, A., Nawaz, M., Alawfi, K., Hussain, A., & Huang, K. (2017). Customer churn prediction in the telecommunication sector using a rough set approach. Neurocomputing, 237, 242-254. https://doi.org/10.1016/j.neucom.2016.12.009 Antunes, I., Martinez, L. M., & Martinez, L. F. (2022). The effectiveness of sales promotion techniques on the millennial consumers’ buying behavior. ReMark - Revista Brasileira De Marketing, 21(3), 784–836. https://doi.org/10.5585/remark.v21i3.19997 Beckett, A. (2015). An exposition of consumer behaviour in the financial services industry. International Journal of Bank Marketing, 18(1), pp. 15-26. https://doi.org/10.1108/02652320010315325 Bennedsen, M., Larsen, B., Schmutte, I., & Scur, D. (2020). Preserving job matches during the COVID-19 pandemic: firm-level evidence on the role of government aid. Global Labor Organization (GLO), Essen. http://hdl.handle.net/10419/221802 Bento, M., Martinez, L. M., & Martinez, L. F. (2018). Brand engagement and search for brands on social media: Comparing generations X and Y in Portugal. Journal of Retailing and Consumer Services, 43, 234–241. https://doi.org/10.1016/j.jretconser.2018.04.003 Branzoli, N., Rainone, E., & Supino, I. (2021). Banks’ IT adoption and lending during the pandemic. Vox EU. https://voxeu.org/article/banks-it-adoption-and-lending-during-pandemic Brodmann, J., Rayfield, B., Hassan, M. K., & Mai, A. T. (2018). Banking characteristics of millennials. Journal of Economic Cooperation & Development, 39(4), 43-73. https://www.proquest.com/scholarly-journals/banking-characteristicsmillennials/docview/2240072963/se-2?accountid=205945 Casanova, C., Hardy, B., & Onen, M. (2021). Covid-19 policy measures to support bank lending. BIS Quarterly Review. https://www.bis.org/publ/qtrpdf/r_qt2109d.htm Colak, G., & Öztekin, Ö. (2021). The impact of COVID-19 pandemic on bank lending around the world. Journal of Banking & Finance, 133. https://doi.org/10.1016/j.jbankfin.2021.106207 Consumers and Mobile Financial Services. (n.d.). FRB: How are consumers interacting with financial institutions? https://www.federalreserve.gov/econresdata/mobile-devices/2012-consumers-financial-institutions.html Contreras, R. C., Olapane, E., Cataluňa, M. P., & Buenviaje, L. C. (2021). Financial management capabilities among personnel in a State University in the Philippines. Journal of Economics, Finance and Accounting Studies, 3(2), 158–168. https://doi.org/10.32996/jefas.2021.3.2.16 Cook, B. (2016). The illiterate executive: An executive’s handbook for mastering financial acumen. FriesenPress. Coppola, F. (2017). How bank lending really creates money, and why the magic money tree is not cost free. Forbes. https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=32d01d2b3073 Curtis, G. (2021, June 26). The best ways to borrow money. Investopedia. https://www.investopedia.com/articles/basics/07/financing-options.asp De Araujo, D. K. G., Cohen, B. H., & Pogliani, P. (2021). Bank loan loss provisioning during the Covid crisis. BIS Quarterly Review. https://www.bis.org/publ/qtrpdf/r_qt2103w.htm Dewi, V. I. (2022). How do demographic and socioeconomic factors affect financial literacy and its variables? Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2077640 Dickler, J. (2020, May 13). For cash-strapped Americans, loans are hard to come by. CNBC. https://www.cnbc.com/2020/05/12/amid-the-coronavirus-consumer-loans-are-in-short-supply.html Diriba, G. (2020). Empirical investigation on determinants of lending behaviour: Evidence from commercial banks in Ethiopia. Research Journal of Finance and Accounting, 11(1) https://doi.org/10.7176/rjfa/11-19-03 Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on business and research. Journal of business research, 117, 284-289. https://doi.org/10.1016/j.jbusres.2020.06.008 Euromonitor. (n.d.). Consumers in 2021. https://www.euromonitor.com/consumers-in-2021/report Euromonitor International. (2021). Consumer lending in the Philippines. https://www.euromonitor.com/consumer-lending-in-the-philippines/report# Fujiki, H. (2022). Household financial services, financial literacy, and COVID-19 pandemic. Applied Economics Letters, 29(7), 615–618. https://doi.org/10.1080/13504851.2021.1878092 Gallery, N., Newton, C., & Palm, P. (2011). Framework for assessing financial literacy and superannuation investment choice decisions. Australasian Accounting, Business and Finance Journal, 5(2), 3–22. https://ro.uow.edu.au/aabfj/vol5/iss2/2/ Gong, D., Jiang, T., & Lu, L. (2021). Pandemic and bank lending: Evidence from the 2009 H1N1 pandemic. Finance research letters, 39. https://doi.org/10.1016/j.frl.2020.101627 Grohmann, A. (2017). Financial Literacy and financial behavior: Evidence from the emerging Asian middle class. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3084021 Grohmann, A. (2018). Financial literacy and financial behavior: Evidence from the emerging Asian middle class. Pacific-Basin Finance Journal, 48(2018), 129–143. https://doi.org/10.1016/j.pacfin.2018.01.007 Grohmann, A. (2018). Financial literacy and financial behavior: Evidence from the emerging Asian middle class. Pacific-Basin Finance Journal, 48, 129–143. https://doi.org/10.1016/j.pacfin.2018.01.007 Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/ebr-11-2018-0203 Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R: A workbook (p. 197). Springer Nature. Hani, A. (2021, November 24). The Philippines to further National Financial Literacy. OpenGov Asia. https://opengovasia.com/the-philippines-to-further-national-financial-literacy/ Hardley, M (2012). Millennials Struggle with Financial Literacy. USATODAY.com. http://usatodayeducation.com/k12/wpcontent/uploads/2012/11/lesson33.pdf Haslehurst, R., Ward, P., & Wong, G. (2021). COVID-19 recovery opportunities in consumer lending. L.E.K. Consulting. https://www.lek.com/insights/ei/covid-19-recovery-opportunities-consumer-lending Hayes, A. (2022, February 2). Financial Institution (FI). Investopedia. https://www.investopedia.com/terms/f/financialinstitution.asp Honka, E., Hortacsu, A., & Vitorino, A. (2017). Advertising, consumer awareness, and choice: Evidence from the U.S. Banking Industry. The RAND Journal of Economics, 48(3), 611–646. https://doi.org/10.1111/1756-2171.12188 Hoque, M., Nik Hashim, N., & Azmi, M. (2018). Moderating effects of marketing communication and financial consideration on customer attitude and intention to purchase Islamic Banking Products. Journal of Islamic Marketing, 9(4), 799–822. https://doi.org/10.1108/jima-01-2017-0005 Ivashina, V., Laeven, L., & Moral-Benito, E. (2020). Loan types and the bank lending channel. Journal of Monetary Economics, 126, 171–187. https://doi.org/10.1016/j.jmoneco.2021.11.006 Kadoya, Y., & Khan, M. S. R. (2020). Financial literacy in Japan: New evidence using financial knowledge, behavior, and attitude. Sustainability, 12(9). https://doi.org/10.3390/su12093683 Khalid, M. S. (2016, May 9). White, blue, pink or grey: What colour collar are you? LinkedIn. https://www.linkedin.com/pulse/white-blue-pink-grey-what-colour-collar-you-jobs-khalid Khandelwal, R., Kolte, A., Veer, N., & Sharma, P. (2021). Compulsive buying behaviour of credit card users and affecting factors such as financial knowledge, prestige and Retention Time: A cross-sectional research. Vision: The Journal of Business Perspective, 26(2), 172–180. https://doi.org/10.1177/0972262920981428 Kim, J. (2020). Impact of the perceived threat of COVID-19 on variety-seeking. Australasian Marketing Journal (AMJ). http://doi.org/10.1016/j.ausmj.2020.07.001 Klapper, L., Lusardi, A., & Oudheusden, P. V. (2015). Financial literacy around the world: Insights from the standard & poor’s ratings services global financial literacy survey. https://gflec.org/wp-content/uploads/2015/11/Finlit_paper_16_F2_singles.pdf Laato, S., Islam, A. N., Farooq, A., & Dhir, A. (2020). Unusual purchasing behavior during the early stages of the COVID-19 pandemic: The stimulus-organism-response approach. Journal of Retailing and Consumer Services, 57. https://doi.org/10.1016/j.jretconser.2020.102224 Lewis, L. (2017). Millennial buying behavior in retail. The International Bank of Marketing, 7, 47- 48. Lips-Wiersma, M., Wright, S. and Dik, B. (2016). Meaningful work: Differences among blue-, pink-, and white-collar occupations. Career Development International, 21(5), 534-551. https://doi.org/10.1108/CDI-04-2016-0052 Lyons, A., Grable, J., & Zeng, T. (2019). Impacts of financial literacy on the loan decisions of financially excluded households in the People's Republic of China. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3370021 Mogaji, E., Adeola, O., Hinson, R. E., Nguyen, N. P., Nwoba, A. C., & Soetan, T. O. (2021). Marketing bank services to financially vulnerable customers: Evidence from an emerging economy. International Journal of Bank Marketing, 39(3), 402-428. https://doi.org/10.1108/IJBM-07-2020-0379 Moreno, F. M., Lafuente, J. G., Carreón, F. Á., & Moreno, S. M. (2017). The characterization of the millennials and their buying behavior. International Journal of Marketing Studies, 9(5), 135. https://doi.org/10.5539/ijms.v9n5p135 Murray, J. (2019). The advantage of millennials to previous generations as a consumer. Journal of Marketing Managements, 55, 10-11. Nguyen, H. V., Ha, G. H., Nguyen, D. N., Doan, A. H., & Phan, H. T. (2022). Understanding financial literacy and associated factors among adult population in a low-middle income country. Heliyon, 8(6). https://doi.org/10.1016/j.heliyon.2022.e09638 Oana, D. (2020). The impact of the current crisis generated by the COVID-19 pandemic on consumer behavior. Studies in Business & Economics, 15(2). https://sciendo.com/downloadpdf/journals/sbe/15/2/article-p85.xml Ordun, G. (2015). Millennial (Gen Y) Consumer Behavior Their Shopping Preferences and Perceptual MapsAssociated With Brand Loyalty. Canadian Social Science, 11(4), 1-16. http://doi.org/10.3968/pdf_294 Philippine Statistics Authority. (2021). Highlights of the National Capital Region (NCR) population 2020 Census of Population and Housing (2020 CPH). https://psa.gov.ph/content/highlights-national-capital-region-ncr-population-2020-census-population-and-housing-2020 PRC 2015 Pew Research Center: America’s Changing Religious Landscape. https://policycommons.net/artifacts/619134/americas-changing-religious-landscape/1600198/ Rahman, M. A. (2018). A study on loan and advances of Agrani Bank Limited. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3464783 Rayi, G., & Aras, M. (2021). How Product Innovation and Motivation Drive Purchase Decision as Consumer Buying Behavior. Journal of Distribution Science, 19 (1), 49–60. https://doi.org/10.15722/JDS.19.1.202101.49 Ryan, T. P. (2013). Sample size determination and power. John Wiley & Sons. Schawbel, D. (2012, March 29). Millennials vs. Baby boomers: Who would you rather hire? Time. https://business.time.com/2012/03/29/millennials-vs-baby-boomers-who-would-you-rather-hire/ Sheth, J. (2020). Impact of Covid-19 on consumer behavior: Will the old habits return or die? Journal of Business Research, 117, 280–283. https://doi.org/10.1016/j.jbusres.2020.05.059 Shrestha, N. (2021). Factor analysis as a tool for survey analysis. American Journal of Applied Mathematics and Statistics, 9(1). 4-11.http://article.sciappliedmathematics.com/pdf/AJAMS-9-1-2.pdf Soni, D., & Panwar, S. (2018). A Diasporic Description of Collar Jobs and their Significance in the Contemporary World. International Journal of Engineering Science and Computing, 8(9), 18940-18943. https://ijesc.org/upload/e8c29fdb61f1830df3a059d2a931f125.A%20Diasporic%20Description%20of%20Collar%20Jobs%20and%20their%20Significance%20in%20the%20Contemporary%20World.pdf Sunwoo, T. L., & Kyoung, T. K. (2020). Propensity to plan, financial knowledge, overconfidence, and credit card management behaviors of millennials. Family and Consumer Sciences, 49(2), 123–143. https://doi.org/10.1111/fcsr.12381 Tejero, E., Pilongo, L., & Pamaran, F. (2019). Financial literacy in relation to financial management. University of Bohol Multidisciplinary Research Journal, 7(1). https://doi.org/10.15631/ub.mrj.v7i0.125 Trading Economics. (2019). Philippines bank lending rate. https://tradingeconomics.com/philippines/bank-lending-rate Tucker, M., Jubb, C., & Yap, C. J. (2019). The theory of planned behaviour and student banking in Australia. International Journal of Bank Marketing, 38(1), 113–137. https://doi.org/10.1108/IJBM-11-2018-0324 Utomo, WP (2019). Indonesia Millennial Report 2019: Understanding The Behavior of Indonesian Millennials. https://cdn.idntimes.com/content-documents/indonesia-millennial-report-2019-by-idn-times.pdf Valaskova, K., Durana, P., & Adamko, P. (2021). Changes in consumers’ purchase patterns as a consequence of the COVID-19 pandemic. Mathematics, 9(15). https://doi.org/10.3390/math9151788 Vo, X. (2018). Bank lending behavior in emerging markets. Finance Research Letters, 27, 129–134. https://doi.org/10.1016/j.frl.2018.02.011 What Is Consumer Buying Behavior? (2020, January 24). DemandJump. https://www.demandjump.com/blog/what-is-consumer-buying-behavior#:~:text=Consumer%20Buying%20Behavior%20refers%20to,a%20variety%20of%20other%20actions World Health Organization. (n.d.). Coronavirus. World Health Organization. Retrieved September 24, 2022, from https://www.who.int/health-topics/coronavirus#tab=tab_1 Xiao, J., Chen, C., & Chen, F. (2013). Consumer financial capability and financial satisfaction. Social Indicators Research, 118(1), 415–432. https://doi.org/10.1007/s11205-013-0414-8 Zulu, T. (2018) Factors affecting financial literacy by commercial bank customers. Cavendish Repository. Electronic Journal. http://http://155.0.3.194:8080/jspui/handle/123456789/105
DOI: https://doi.org/10.18860/mec-j.v7i3.20814
Refbacks
- There are currently no refbacks.
Editorial Office:
Faculty of Economics,
State Islamic University of Maulana Malik Ibrahim Malang
Gajayana Street 50, Malang-East Java, Indonesia 65144
Phone (+62) 341 558881, Facsimile (+62) 341 558881
e-mail: mecjournal@uin-malang.ac.id
P-ISSN 2599-3402
E-ISSN 2598-9537
MEC-J is licensed under CC-BY-SA
© All rights reserved 2017.
MEC-J INDEXED IN:
Member of:
