Financial Behavior, Religious Knowledge, and Debt Decision-Making: A Conceptual Paper

Abstract

Debt decision-making is a form of financial decision that must be appropriately considered to obtain sufficient capital funding. This study discusses the role of financial behavior, influenced by psychological factors and religious knowledge in determining debt decision-making. Financial behavior is conceptualized by overconfidence, herding, and risk aversion. At the same time, religious knowledge is measured by the shariah compliance practice of the respondent in determining debt decision-making. Thus, this paper aims to propose a conceptual framework to explain the relationship between financial behavior factors and religious knowledge on debt decision-making of Muslim entrepreneurs.