Increasing Buyer Compliance in Paying Installments Based on Income Level and Document Completeness with Moderated Buyer Commitment

Abstract

Income level, completeness of administrative documents, and buyer commitment are three main factors that simultaneously influence the level of compliance in installment payments. Income level reflects the buyer's objective economic capability, completeness of administrative documents guarantees the validity and credibility of financing transactions, while buyer commitment reflects the intention, responsibility, and moral awareness in fulfilling payment obligations. Empirically, the phenomenon of non-performing loans and non-compliance with installment payments is still common, especially in the property financing sector. This study uses a quantitative approach with an explanatory research method. This approach is used to explain the causal relationship between income level and document completeness variables on buyer compliance in paying installments, with buyer commitment as a moderating variable. Data analysis was conducted using Partial Least Square – Structural Equation Modeling (PLS-SEM), because this method is able to test direct and indirect relationships between variables, including moderating effects. This approach is also suitable for use in research involving complex conceptual models and relatively small to medium sample sizes. Income level does not significantly affect buyer compliance in paying installments. This means that buyers with high income levels do not necessarily have better levels of payment compliance than buyers with lower incomes. Conversely, buyers with lower incomes can still demonstrate good payment compliance if they possess discipline and sound financial management. Income level, in this study, was not shown to be a significant factor in determining buyer compliance with installment payments. The completeness of administrative documents significantly influenced buyer compliance with installment payments.