The Effect of Financial Technology (FinTech) Adoption on Individual Over-Indebtedness in Asean-5 Countries

This article examines the impact of financial technology (FinTech) on individual over-indebtedness in ASEAN-5 countries (Malaysia, Indonesia, Thailand, Singapore, and the Philippines). While FinTech has revolutionised financial services, enhancing accessibility and efficiency, it raises concerns about over- indebtedness, where individuals struggle to meet debt obligations. The study investigates how FinTech, alongside macroeconomic factors such as household consumption, economic growth, unemployment, and inflation, influences over- indebtedness. Utilising a static quantitative panel data approach from 2010 to 2020, the research finds that FinTech Adoptions negatively correlate with over-indebtedness, suggesting that FinTech can enhance financial stability through improved financial literacy alongside the financial credit assessment capabilities. Conversely, higher household consumption is positively associated with over-indebtedness, indicating that increased borrowing to finance consumption leads to higher debt levels. Economic growth shows a negative relationship with over- indebtedness, as improved economic conditions enhance individuals' ability to repay debts. Unemployment rates also negatively correlate with over-indebtedness, highlighting the complex interplay between employment and borrowing behaviours. Inflation, however, is statistically insignificant in affecting over-indebtedness. Nonetheless, the study's limitations include potentially overlooking the dynamic cultural differences within the ASEAN-5 countries, and the complex interplay between the economic conditions and impulsive borrowing behaviors of these countries. Finally, this research contributes to understanding the multifaceted nature of over-indebtedness and the role of FinTech in shaping financial behaviours in ASEAN-5 countries that could provide relevant insights to individuals, academics and policymakers for further development.