Municipal debt help for self-employed

Abstract

Introduction: An increasing amount of self-employed people in the Netherlands faces financial problems. However, many people do not access debt help offer by municipalities. This has negative implications for the financial well-being of self-employed people. Objective: Understand the factors that influence the low participation rate of self-employed people in municipal debt help. Theory: The influence of financial problems, trust in municipal financial services, and self-stigma on financial help are examined to understand self-employed people’s financial help-seeking behaviour. Method: Data from the single-wave study ‘On municipal debt services for self-employed’ from the LISS panel is used. Logistic regressions are used to understand the impact of financial problems, trust and self-stigma on participation in municipal debt help. Results: Participation in municipal debt help was not affected by financial problems and trust. Self-stigma decreased the participation in municipal debt help. This effects runs independently of one’s financial situation. Conclusion and implications: Self-stigma on financial help negatively impact the willingness of self-employed people to participate in municipal debt help in case of financial difficulties. Knowledge regarding the available financial services facilitates the participation in debt help programs. Self-stigma can be reduced by creating an environment where people feel comfortable seeking financial help. This can be achieved by sharing stories of self-employed people who have positive experiences with municipal debt help on the website of municipalities. Financial knowledge can be increased by providing accurate and clear information about the available financial services on the website of the municipalities.