California University Of Business And Technology
THE EFFECTIVENESS OF INFORMAL MONEY LENDING BUSINESS TO THE MICRO-ENTREPRENEURS
Research and Design
CHAPTER 1 INTRODUCTION RATIONALE
Poverty is one of the problems of our country today. Having a wide range of population and low income in every household is the primary reason to consider our country in poverty. Money is very essential to every individual since it is used as a medium of exchange. It is considered as one of the most outstanding inventions in the entire history of mankind. To poor people, money is equal to survival. Everyone needs money to satisfy their wants and needs. Thus, people are engaged in credit Credit is the ability of an individual to obtain goods, services, or money at the present time in exchange of a promise to pay at a definite future time. It enables people to acquire money that could help them to finance their needs. The poorest of the poor should be given the opportunity to receive benefits of a credit system. It is this depressed group which needs credit most. People, who have been granted credit, have the opportunity to improve their social and economic conditions as long as they use credit properly. Many programs have been developed to improve the local community. Microfinance which has the purpose of lending a sum certain amount of money was established. It is the provision of financial services to low income clients, including consumers and the self-employed, who traditionally lack access to banking and related
CHAPTER 1 INTRODUCTION RATIONALE
Poverty is one of the problems of our country today. Having a wide range of population and low income in every household is the primary reason to consider our country in poverty. Money is very essential to every individual since it is used as a medium of exchange. It is considered as one of the most outstanding inventions in the entire history of mankind. To poor people, money is equal to survival. Everyone needs money to satisfy their wants and needs. Thus, people are engaged in credit Credit is the ability of an individual to obtain goods, services, or money at the present time in exchange of a promise to pay at a definite future time. It enables people to acquire money that could help them to finance their needs. The poorest of the poor should be given the opportunity to receive benefits of a credit system. It is this depressed group which needs credit most. People, who have been granted credit, have the opportunity to improve their social and economic conditions as long as they use credit properly. Many programs have been developed to improve the local community. Microfinance which has the purpose of lending a sum certain amount of money was established. It is the provision of financial services to low income clients, including consumers and the self-employed, who traditionally lack access to banking and related
services. More broadly, it is a movement whose object is a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance and fund transfers. Those who promote microfinance generally believe that such access will help poor people out of poverty. The Microfinance institutions are providing easy access loans for everyone. Unlike bank loans it is designed to help poor communities by the financial services and intended to alleviate poverty in many countries. Here, in our country, there have been many different Microfinance institutions in any forms and shapes. The goal is to reach out impoverished communities and provide financial assistance. The Social Action Center (SAC) of the Diocese of Legazpi is one of the service oriented non-profit, non-government Catholic Organization that implement programs through people's organization and Christian formation that will gener ate gener ate people’s participation in the enhancement of the socio-economic and spiritual well-being of the parishioners for a dynamic, dignified and self-reliant Christian communities. It was established in 1972 as an offshoot of Vatican 11’s call for the church’s greater involvement in social issues. As the social actions arm of the Bishop of Legazpi, Most Rev. Jose C. Sorra, D.D is to coordinate, supervise, and implement community projects of the Diocese whether initiated by the parish priest or the civic groups. Social-Economic Development Program (SEDP) Inc. has a vision for a dynamic and pro-active financial foundation of the Diocese of Legazpi committed to the total advancement of the poor. Their mission is commits to deliver sustainable financial
services with training and foundation to marginalized women towards improved socioeconomic condition, political empowerment and enhance spiritual well-being. The program components of Social-Economic Development Program (SEDP) consist of credit services like production loan, housing loan and multi-purpose loan. They also have savings mobilization which provides a good incentive for the program participants to develop the saving habit. The Micro-insurance provides for debt redemption and burial assistance or emergency medical assistance. They also have formation and training in Spiritual and valued formation such as recollection, retreat, team building, basic bible orientation, marriage enrichment, session, values clarification and in skills training which provides the members improve their capability in managing their organization and their respective projects. They also offer Medical Mission, Marriage Validation and Counselling, Relief Assistance during calamities, Scholarship, Advance Entrepreneurial Training, Parish Integration and Ongoing Formation and Current Events Updating through their media, such as SAC operations, DSWBS Special Program for Social-Economic Development Program and news brief by Social Action Center Operations or so-called Ang Bangraw. Nowadays, the SEDP Inc. is adopting the Grameen Banking Scheme. Grameen is a Bengali language which means “village” (barrio or barangay). This program aims to increase member’s income and improve socio -economic status of their families. A profound understanding and application of these beliefs have guided micro credit to reach the poorest with service that are sustainable.
Several reasons have prompted the researchers to select this topic and conduct it among the beneficiaries of the SEDP Inc. The researchers want to find out if these people who are actively involved in this program are aware of the possible gains and negative effects brought by it and to know their perception on SEDP Inc. The researcher has to conduct this study for better understanding of cash management of any individual and the benefits of the following:
While doing the research the researcher had learned a lot of things from this topic. It has been an eye-opener for them to finally realize on how poverty affected millions of lives around the world and financial institution works especially the Microfinance institution as one of the means they are using for fighting or alleviating poverty today. On the part Microfinance Institutions (SEDP of SAC)
it may serve as a
helping tool in developing and improving their program and to have suitable goal regarding the effects of their program to its beneficiaries. O n the part of the microfinance beneficiaries it may help out in determining
whether availing loans from this microfinance lending institution is an advantage or may cause to several problems. This will develop their awareness to value money for personal, economics, social and entrepreneurial development, On the part of the community, it will be a way to erudite of the possible
effects that microfinance could bring on their lives and how people will be benefited from it and of course to admonished poverty.
On the part of the students/ readers , awareness is great benefit that they
could obtain in this research. They will be more knowledgeable on things that somehow they are not familiar enough; probably students are aware of the poverty we are all experiencing .This is not just additional information for them to know and to keep but to enable them to be more socially responsible, for them to act and do something. On the part of future researcher , this study will serve as a reference material
for future studies with the same undertaking. STATEMENT OF THE PROBLEM
This study aims to determine the perceive gains and negative effects of SocialEconomic Development Program Inc. of SAC to household beneficiaries of Ligao City. Specifically, it attempted to answer the following problems: 1. What is the profile of the beneficiaries in terms of: a) Age b) Educational background c) Occupation d) Monthly income e) Respondents membership status 2. What are the socio-economic factors that motivate households in availing the microfinance? 3. What are the perceive gains of SEDP Inc. beneficiaries in availing loans and services of the microfinance?
4. What are the negative effects SEDP Inc. beneficiaries in availing loans and services of the microfinance? 5. What are the ways in reducing the negative effects of Microfinance to its beneficiaries?
HYPOTHESIS
In this study, the researcher presumes the following as answer to the identified problems: That Microfinance institution does not consider age, educational attainment, occupation and monthly income of its beneficiaries in granting loans but on the membership status and attitudes of its beneficiaries in repaying. That social factor that motivates households in availing loan can help them in assuage in poverty. In terms of benefits gained by the member from their loans they gained knowledge in managing business, the developed self-disciplined in apportioning money and their financial status was elevated from poverty and the problems that are brought in availing loans. Background
The name Ligao is derived from the local word "ticao", once an abundant tree whose poisonous leaves were used to catch fish in rivers or creeks. Most Ligaoeños,
however, believe that the name Ligao was originally "licau" which means to take the long way around or to turn away from the ordinary or usual route. Ligao started as a small settlement known as Cavasi in the 16th century. It grew in population as it attracted natives from nearby settlements. Eventually, power struggles among ambitious and aggressive leaders caused trouble as they created divisions among the settlement. There arose five divisions led by maginoos (chieftains): Pagkilatan, Maaban, Sampoñgan, Makabongay and Hokoman. Peace was only restored when Chieftain Pagkilatan was appointed supreme leader over the entire settlement with the approval of the other chieftains. The town was founded as a barrio of Polangui in 1606, being ceded to Oas in 1665, and finally becoming an independent municipality in 1666.
Related Non-Research Works
The Senate Bill No. 1180, section 2, introduced by Senator Ramon B. Magsaysay which is “An Act Regulating the Establishment and Operation of Lending Companies in the Philippines and for Other Purposes.” The Declaration of policy declared that the policy of the State to regulate the establishment and activities of lending companies, placing their operations on a sound, efficient and stable basis to derive the optimum advantages from them as an additional source of credit; to prevent and mitigate, as far as practicable, practices prejudicial to public interest; and to lay down the minimum requirements and standards under which they may be established and do business. R.A. 3779 known as the “Savings and Loan Associated Act” as amended:
Whereas savings and loans associated have prove to be effective instrument in encouraging the savings habit of people, especially low and middle income groups and providing additional credit facilities to household, consumers, small scale entrepreneurs and home builders. The R.A. 6938 known as the Cooperative Code of the Philippines it enacted: This law encourages the growth of cooperatives to promote self-reliance and harness people towards economic development and social justice. This shall be the guiding law of existing future cooperative in the country. It provides for the rules and procedures for the organization, administration, registration, dissolution and auditing of cooperatives. It also sets out the rights, privileges and responsibilities of cooperative as well as the members. This act enjoins the private sector to undertake actual organization of cooperatives. On the other hand, it commands the government to provide technical guidance, financial assistance and other services for the development of cooperatives. Microfinance’s worldwide recognition can also be credited to Muhammad Yunus, founder of the Grameen Bank in Bangladesh and recipient of the 2006 Nobel Peace Prize. Although microfinance was not his original idea, Yunus pioneered the implementation of joint-liability groups as a substitute to tangible collaterals when borrowing loans, and emphasized the role of women in managing credit and organizing microenterprises. He founded the Grameen Bank in the 1970s as an effort to ameliorate the destitute poverty that plagued his country. He believes that the poor possess an “entrepreneurial drive” and are equipped with “survival skills” that allow them to become
successful microentrepreneurs .He also asserts that to develop tools and services that would greatly benefit the poor, their limitations must be carefully considered by institutions which fight poverty .As of now his Grameen Bank has more than 1,000 branches and 6 million members, and boasts a 98 percent repayment rate. On the other hand, Bangko Sentral’s Circular 685 provides the rules for the recognition of Microfinance Institution Rating Agencies or MIRAs. This should improve access to financing and capital as ratings have proven effective in enhancing the quality of microfinance institutions in terms of transparency, discipline, and overall governance. This should also promote investments in the Philippine microfinance industry. These are the circulars the Bangko Sentral issued this year to promote the further development of our microfinance sector. With the support of all stakeholders, we should start seeing positive results from these initiatives. I also look forward to the participation of more banks in the microfinance sector. As of December 2009, there were more than 200 banks engaged in microfinance with total loans outstanding of about P6 billion lent out to about 900,000 borrowers. By any yardstick, these are good numbers. However, with millions of Filipinos still living in poverty, we should commit to do more together to do better in spreading the gospel of microfinance and how it can uplift and transform individuals, families, as well as com munities”.
Whether we accept it or not, money is hard to make nowadays; at the same time, expenses keep on increasing. If our ,money we are making is not enough and we bills and expenses to pay, most often than not we end up in debt. There are two common
reasons why we get into debt: Spending tomorrow’s income today and unwilling to change lifestyle when circumstances have changed. Getting out of debt is not fun; it is a painful process but there are ways out of debt. Willingness to pay matters most not the real amount, dealing with the root of the problem ( the attitudes and bad habits led us to indebtedness) and lastly tough love, letting your family, friends and or relatives borrowing habitually is not good not all because they forgot God in their life. Credit is a very important tool in economic development. If it is sufficient and if it is properly used, credit benefits all users, individuals, community, or country. According to Estapa, the confidence in which credit is built in two fold in characteristics, the lender must be morally certain that borrowers has the ability to pay debt and to pay debt when due. This ability to pay is evaluated through the requirements imposed before granting loan. This includes collateral, evaluation of payment capacity loan and their capacity to pay debt. There are, however, other factors that should be taken into accounts before credit is finally granted. Those factors are commonly called the C’s of Credit: character, capacity, capital, collateral and conditions. Microfinance is a tool designed to uplift the quality of life of people, it provides additional capital to the business people who are engaged with or it helps them to start a business. In addition, it is also a tool for community development and capability building to people who had been engaged in business.
According to the World vision, the term microfinance refers to the practice of providing financial services to people in impoverished countries who have no collateral, credit history, or access to traditional lending service." Microfinance institutions manage
and administer the loans and credit programs. These institutions are located near the areas they serve.
According to Asian Development Bank: The Poverty and the Government Responses The major causes of poverty in the Philippines fall into several broad categories(1) weak macroeconomics management(ii)employment issues;(iii)high population growth rates,(iv)an underperforming agricultural sector and an unfinished land reform agenda; (v) governance issues including corruption and a weak state; (vi) conflict and security issues , particularly in Mindanao; and (vii) disability. The 2004-2010 Medium-Term Philippines Development Plan contains ambitious poverty reduction targets. Successive governments of the Philippines since 1985 have attached a high priority to poverty reduction, but have had only moderate success in reducing the overall headcount, and outright failure in reducing the absolute number of poor Filipinos. Targeting has been a key problem, as have issues of budget, governance, and LGU capacity (particularly in the context of decentralization, initiated with the 1991 Local Government Code). The tendency to derail old programs and to launch new ones with each new President has resulted in duplication of efforts, wasted resources, and continuous state of transition. The stated goal is to reduce the poverty incidence of families from 28.4% in 200 to 17'9% in 2010. Similarly, the subsistence incidence of families is intended to drop from 13.10% of 1.93% per year for the period 2005-2010. However, it does not articulate a clear population policy. According to the Asia Society: Microfinance: the Seed of Change
Microfinance institutions thrive in urban settings; they are also being having the ability to change life for the better rural areas. They also provide clients with their basic financial services that they need to grow the money they earn, so that the business can benefit the villagers who produce the items. Related Studies
Many studies are conducted regarding credit and microfinance institutions that are related to this study. Cañada (2008), on her study on the Effect of Microcredit financing –SocioEconomic Development Program of Social Action Center in Cabunturan, Malinao, Albay, that the primary effect of availing micro-credit financing services, gives impact to be involved in the social activities as well as improved one’s values. The economic effects of micro credit financing services generate income to sustain the needs of the family. Moral (2008) studied and assessed the performance of the Simbag sa Pagasenso as to its credit services in one Center of the Old Albay Branch. Her findings showed that majority of the respondents were very satisfied on the credit services offered by the institution. Majority of the respondents had an improved status of their business, increased financial management capability and improved socio-economic condition which had an equivalent rating of very effective as to the extent of performance of SEDP in supporting the entrepreneurial activities of each member. Cate
(2003)
concluded
that
the
perceived
socio-economic
effects
of
Microfinance-HELP were positive. That is, the client beneficiaries evaluated the whole
program as good because it helped them among other to improve their well-being, achieve social aspiration and taught them how to save and appreciate the value of saving. It also increased their family income and taught them wise budget management. Neo (2008) conducted a study to analyze a formal microfinance lending institution named as the UKNOWIT Cooperative. Her findings revealed that a majority of the respondents believed that they have become more disciplined and more responsible. All of them used the money borrowed for business. The income derived from the business supported by the loan proceeds was used by the respondents for their basic needs as well as the education of their children. The cooperative has exerted efforts to solve those problems through review of policies and its operational procedures, particularly in their dealing with the clienteles and the community. The study entitled, the Effects of Borrowed Capital to the Daraga Public Market vendors was conducted by Alcazar et al (2004). As to the effects of borrowed capital to the Daraga market, borrowing capital is their primary option to address unavailability of funds for their business. It provides opportunity to transact business in exchange for the goods and also it can provide opportunity for the borrowers to expand another line for business. Miraflor studied the effects of the informal lending sector on the profitability of the Micro-Business establishments in the market site of Daraga, Albay. Her study revealed that all micro business owners utilized loans to keep their business enterprise going. As to their economic profitability, almost all agreed that the utilization of amount borrowed was economically profitable.
Cresencio (2006) concluded that the loan availed have l increased profitability on some business activities of the borrowers has resulted to a positive outcome as shown by the increase in the weighted average in terms of assets, sales and ultimately, profit. The monthly income of the borrowers could hardly sustain the basic needs of the family. Basic needs is still the main reason for diversion of funds initially intended for business operation and thus results to unsuccessful operation. On the study conducted by Ereve (2008), the microfinance program possessed a good system in the delivery of its program to the society. Wherein, The problems encountered by the respondents were based on the personal background and experience being member-borrower of the microfinance program. Manrique (2008) entitle” analysis Of The Credit Delivery System Of Simbag Sa Pag-Asenso, Inc. – SEDP Of The Social Action Center (SAC) Of Legazpi City ”, some measure recommend by the SEDP Inc. In Legazpi City to improve credit delivery were to provide trainings and seminars which could help their clients to expand their business and provide higher income, provide additional services and benefits to productive clients. They also implemented rules and regulations on loan to prompt delinquent clients and recovery of their accounts and consider safety of the worker assigned to distant places in carrying big amount of money which is perilous for them. Alaurin et al (2007) on their study, they found out that the great social and economic benefits after the procurement of loans. Majority of them used the loaned amount to meet their financial commitments. The loan availed furthermore added to the income level of the family, thereby increasing their purchasing ability.
The Cash Management System of Air Material Wing Savings Loan Association Incorporated, Albay branch was the study conducted by Caraballo and Danisco ( 2007). It was mentioned that all business need to control their cash efficiency as possible even if your company has cash hand, cash need change a companies grow, cash needed for expansion an expanding company requires cash, additional staff and new assets. However, it may be taken several months or longer before the benefits of the expansion generates higher revenue and eventually turned back into cash. Cash management involves managing of the monies of firms in order to maximize cash availability and interest on any idle funds. The firm’s effort to get customers to pay their bills at a certain time fall within accounts receivable management, on the other hand the firms decision about when to pay bills involves accounts payable and accrual management. According to Clutario et al ( 2006) in their study entitled “The Social and Economic Benefits of People’s Alternative Livelihood Foundation of Sorsogon Inc. (PALFSI)” to its borrowers, the problems that the PALFSI clients have encountered in the procurement of loans are not quite felt by most, except for some. The very problem of the majority is the inability of their co-borrowers to pay back the borrowed amount which in effect burdens the other members in terms of payment. Synthesis
From the reviewed literature and studies. The reviewed studies revealed similarities and difference to the present study. The similarities of the in dealt were the researcher would like to spot the perceived gains member-borrower or beneficiaries in availing loans in microfinance institution/
Socio- Economic Development Program Inc. The difference were the objectives and focused of each study. Microfinance programs are increasingly publicized as one of the most successful tools for development with the ability to positively affect its participant’s economic and social status The study of Canada, Moral, Cate, Alcazar and Miraflor studied the effect of availing micro-financing services, gives impact to be involved in the social activities as well as improved one’s values and an improved status of their business, increased financial management capability and improved socio-economic condition. Cresencio, Ereve, Neo, Manrique, Alaurin et al, Caraballo and Danisco and Clutario et al concluded when microfinance program possessed a good system in the delivery of its program to the society. Thus, the microfinance program also reflected its socio-economic impact to its client, the service its personnel exerted and the extent of the awareness and benefit its member-borrower derives from the program. Cañada, Moral, Manrique who have studied the same microfinance institution is different from the present study but it will focus on the beneficiary’s perceive gains and negative effects. Gap Bridged by the Study
From the various studies presented, some focused on microfinance. The other research dealt with other microfinance institution. There are also some studies concerning the same institution, however, this research is not a duplicate for it focuses on a different scope. One of the previous studies has pointed on the delivery system of
the institution. The field of consideration of the other is the effect of microcredit financing on Cabunturan, Malinao, Albay. And the other has made an assessment of performance in Legazpi City. This study gap the bridge in a way that this will focus on perception of beneficiaries in Ligao City with regards to the gains and negative effects of SEDP Inc.
THEORETICAL FRAMEWORK
This study is anchored on David Mc Clellands’ Needs – Based Motivational Theory. This model asserts that every individual is driven by their needs and wants. These needs are found to be in altered degrees in every person and this mix of motivational needs characterize a person’s style and behaviour. The hierarchy of needs of Maslow was also be used in this study, people have needs they wish to satisfy and that gratified needs are not as strongly motivating as unmet needs. A fully satisfied need will not be a strong motivator. This model has shown the human needs in the form of hierarchy that should be satisfied in order, from the lowest to the highest needs. The needs that are stated in this model include physiological, security, love and belongingness, self esteem, and self actualization. Considering the present condition, it is an admitted fact that there is a strong need to uplift the economic and social life of people. To secure the welfare of every individual most especially families who have children to be raised, some find out that the only way to minimize these problem is to resort in borrowing.
David McClelland’s
Need BasedMotivational
People with needs
Uplifted socio-
and wants in Relative
economics status
Satisfaction
Maslow’s
Hierarchy of Needs Theory
Theoretical Paradigm Figure 1
and social life.
CONCEPTUAL FRAMEWORK
The researchers will use the following concepts to make the study more successful. Figure 2 shows the conceptual paradigm of the study. This study will find out the socio-economic factors that motivate the household to avail microfinance, SEDP Inc, which the beneficiaries’ profile in terms of age, educational background, occupation, and monthly income, respondent’s membership status. This will also determine the perceived gains and negative effects of SEDP to its beneficiaries. The first box includes the profile of the beneficiaries that availed loan in microfinance institution. The second box also includes socio-economic factors and the third box includes the perceive gains on availing microfinance. And the fourth box includes the negative effects of availing microfinance services. And lastly the fifth box contains the possible way of reducing the negative effects in availing loans in microfinance institution that if not ended may lead to a serious problem.
Profile of the beneficiaries in terms of: . Age b.Educational background c. Occupation d.Monthly income e.Respondents membership status a
Conceptual Paradigm Figure 2
DEFINITION OF TERMS Beneficiaries – a person who benefits or is expected to benefit from something.
-
in this study it refers to the person who have been benefited of the programs and practices of Social Economic Development Inc.
Microfinance Institution - is the provision of financial services to low-income clients,
including consumers and the self-employed, who traditionally lack access to banking and related services.
-
In this study it refers to SEDP Inc. that offered help to the women of Ligao City in developing the socio-economic status.
Perceived gain – defined in this study as the advantages received by the members of
the institution Negative effect - in this research it refers to the unhelpful results that the beneficiaries
observe as a member of microfinance institution that can cause problem.
SEDP Inc. /Socio Economic Development Program Incorporated-
is one of the
institute providing microfinance services in the City of Ligao which in this study is focused on.
Socio-economic factors- these are the social and economic experiences and realities
that help mould one's personality, attitudes, and lifestyle.
-
In this study refers to the aspects that motivate household on availing microfinance services.
Households- In this study, they are the beneficiaries of the microfinance institution.
CHAPTER II METHODOLOGY
This chapter presents methodology engaged in this study, sources of data population and sample, data gathering, instruments and procedure and the statistical treatment of data. This part of the research answers the questions on how study was conducted. I-
Research Design
This study is engaged descriptive design of research in which it employed survey questionnaires as the main gathering instrument. The records of Simbag sa Pag-asenso, Inc. was looked over to cope up with necessary information needed in completing the study. II-
Sampling Design
The population of this study was the members/beneficiaries of the institution. The total population or member was 928 record as July 12, 2010. The researcher used the Slovin’s formula to determine the sample. Hence:
n=
N 1+ Ne2
Where: n= sample size N= Population size e= desired margin of error
The margin of error used was five percent (5%), which resulted to a sample of 284 beneficiaries. After determining the sample size the researcher will use the random sampling to determine the respondents who of will be the respondents of the study.
III-
RESEARCH STRATEGIES
This study used the descriptive survey method. The survey method was a form of questionnaires. The questionnaires have guide and provided the respondents with questions that will help the researcher picture out how SEDP Inc, Ligao Branch helps it beneficiaries in their socio- economic conditions. IV-
INSTRUMENTATION
`The instrument used in this research was divided into five parts. The first part answers the profile of the beneficiaries regarding name, age, educational attainment, civil status, number of children, monthly income and most importantly the membership status. On the other hand, the second part of the instrument answered the second question in the problem, the socio- economic factors that motivate the beneficiaries in availing loans. It is a checklist that can be answered by more than once. The next part was determining the perceived gains of the beneficiaries, which is divided into three categories: as a businesswoman, attitudes and
family. The fourth part of the questionnaire answers the negative effects of microfinance. Lastly, is the ways on how to reduce the negative effects in availing loans in microfinance institution may brought in its beneficiaries
V-
DATA COLLECTION PROCEDURE
In gathering data, the researchers took the following steps: 1. The researchers made a letter to the Branch Manager of SEDP Inc. to ask permission to conduct the study undersigned by their professor, department chairperson and assistant dean. 2. The researchers request the needed information in conducting of the study such as the number of beneficiaries. 3. To look for related literatures and studies the researchers went to different libraries and surf to the internet for additional information. 4. The researchers combined all information gathered. 5. The researchers went to the different places wherein the Socio Economic Development Program Inc. have its centers. 6. The
researcher
personally
respondents during weekends.
distributed
the
instrument
to
their
VI-
ANALYTICAL TOOL
In analyzing the data the researcher used following statistical tools to quantify the response and for proper interpretation:
Frequency Count - for tallying the actual number of response to an item or question. Percentage - which refers to the ratio of the observable frequency over the total population. P= f/n × 100 Where P- percentage f- Frequency n- Total of number respondents 100-constant Frequency ranking- to denote importance of an item or response discussed to strengthen the interpretation of percentage.
VII-
Work and Financial Plan
Table 1- Work Plan Activity
Allocated Time ( weeks)
a. Problem Formulation
3 weeks
b. Designing/ Making Questionnaire
3 weeks
c. Review of related literature/studies
4 weeks
d. Organizing the related literature /
1 week
studies e. Conceptual
and
Theoretical
4 weeks
Framework f.
Submission
to
the
Adviser
for
1 week
Checking g. Revising
2 weeks
h. Proposal Defense
A day
i.
Data Gathering
2 months
j.
Data Analysis
3 weeks
k. Making
Conclusion
Recommendation
and
2 weeks
Table 2- Financial Plan
Expenditures a. Transportation
Amount Php. 1500.00
b. Foods
750.00
c. Printing
1700.00
d. Encoding
500.00
e. Bookbinding
450.00
f. Snacks for panel list
1000.00
g. Editor’s Fee
250.00
h. Other expenses
800.00
Total
Php. 5, 950.00
REFERENCES:
Alaurin, Raquel P., Armena, Ma. Kristina B., Azucena, Ann E., Frayna, Mayflor A., Lopez, Kathrina Denesse L. “The Lending Operations of Social Welfare (SOWEL) Fund of Department of Social Welfare and Development (DSWD)ROV” (Unpublished Undergraduate Thesis), 2007 (College of Business Administration, Aquinas University, Legazpi City). Alcazar, Roy M., Astor, Marian Pauline E., Deza, Rhaian B., Helis, Ervin L., Frayna, Ivy S., “The effects of Borrowed Capital to the Daraga Public Market Vendors” (Unpublished Undergraduate Thesis), 2004 (College of Business Administration, Aquinas University, Legazpi City). Cañada, Shiela Mae. “The Effect of Micro credit Financing – Socio Economic Development Program of Social Action in Cabunturan, Malinao, Albay: An Asses sment” (Unpublished Undergraduate Thesis), 2008 (Bicol University College of Business, Economics and Management, Daraga, Albay). Chinkee Tan, Till Debt Do Us Apart ( Practical steps on Financial Problem)
Cate, Jerry Raffalo. “Microfinance and Empowering t hrough Livelihood Program (HELP) of the Bango Santiago de Libon: an Anlysis” (Unpublished Undergraduate Thesis), 2003 (Bicol University College of Business, Economics and Management, Daraga, Albay). Caraballo, M. R., Dansico, Johan D. “The Cash Management System of Air Material
Wing
Savings
and
Loan
Association
Incorporrated,
Albay
Branch”
(Unpublished Undergraduate Thesis), 2007 (Divine Words College of Legazpi, Legazpi City). Clutario, Evan Albert C., Logronio, Micheal John H., Perez, Ronald Jason H., “The Social and Economic Benefits of People’s Alternative Livelihood Foundation of Sorsogon, Inc. (PALFSI)” (Unpublished Undergraduate Thesis), 2006 (College of Business Administration, Aquinas University, Legazpi City). Consuelo B. Estapa, Ph. D Mercedes M. Leuterio, Ph. D. Economics of Money and Banking ( Manila Phil: UST Publishing House, 2001), p. 92
Cresencio, Leslie Gaye A., “The Microfinancing program of Bicol Friendly Savings Bank: A Case study” (unpublished Thesis), 2006 (Divine Words College of Legazpi, Legazpi City). Ereve, Archie E.”Effectiveness of the Gubat St. Anthony Cooperatives Microfinance Program as Perceived by its Member-Borrowers in Barangay Gabigaan, Gubat, Sorsogon” (Unpublished Undergraduate Thesis), 2008 (Bicol University College of Business, Economics and Management, Daraga, Albay). Espartinez, Junalyn B., Monreal, Jolibee L., “ Credit Management Practices of Selected Financing Institutions in Legazpi City” (Unpublished Undergraduate
Thesis), 2007 (Divine Words College of Legazpi, Legazpi City). Fajardo, Feliciano, Economics Development , (National Bookstore Inc., 1985), p. 96
http://en.wikipedia.org/wiki/Microfinance
http://www.eHow.com/Microfinance
http://en.wikipedia.org/wiki/Ligao City
http://ifrm,acin/cmf/20060401/evaluatimh-microfinancerandomize/yahoo.com,Microfinance
http://www.businessballs.com/davidmcclelland.htm
International year of micro- credit- http//www.yahoo.com Copyright 2007, May 7. 2004
Manrique, Dennis. “ A n A nalys is of the C redi t D eliver y S ys tem of S imbag s a P ag -
A s ens o, Inc.-S E DP, Legazpi City” (Unpublished Undergraduate Thesis), 2008 (Bicol University College of Business, Economics and Management, Daraga, Albay). Michelle V. Remo, Philippine Daily Inquirer- November 11, 2009
Miraflor, J.P. “The Effects of Informal Lending Sectors on the Profitability of Microbusiness Establishment in the Market Site of Daraga, Albay” (Unpublished
Undergraduate Thesis), 2002 (Bicol University, Daraga, Albay). Miranda, Gregorio S., E s s entials of Money, C redit and B anking (Philippines: Land G Business House 1998), p. 107 Moderno, Kathryn, “Microfinance: Path to Poverty alleviation” ,The first Annual Undergraduate Applied Social Justice Essay , April 10 ,2010
Moral, C.C. “ A n ass es s ment of the Performance of S E DP, Inc. in Legazpi City” (Unpublished Undergraduate Thesis), 2008 (Bicol University, Daraga, Albay). Neo, Maria Cristina. “ A C ase A nalys is of a Formal Mic rofinance Lending Institution.” (Unpublished Undergraduate Thesis ), 2008 (Bicol University College of
Business, Economics and Management, Daraga, Albay).
Organizational Behavior( Human Behavior at Work) john w. Newstorm Ph. D. university of Minnesota Duluthmc graw. Hill interbational edition, 12 th edition p. 106
Philippines Microfinance Sector high on innovation :BSP Governor, Mr. Amando M Tetangco Jr, congratulated the microfinance sector for its robust growth(an excerpt), Microfinance Focus, May 27, 2010 Schelzig, Karen " Poverty in the Philippines: Income, Assets and Access" Copyright 2005 Asian Development Bank, Microfinance in the Philippines
Webster’s Dictionary for students.(Federal Street Press), 2007 Vat II, Gaudium et Spes No. 1
CHAPTER III PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
This chapter discusses the interpretation of the data gathered by the researchers regarding the perceptions of beneficiaries on Socio-Economic Development Program Inc. in Ligao City. The data are presented, analyzed and interpreted according to the statement of the research problem.
1. PROFILE OF THE BENEFICIARIES
The first objective of the study is to know the profile of each beneficiary of the SEDP. Inc. for it helped the researchers to determine the perceived gains and negative effects of the microfinance to its beneficiaries. The profile of the respondents consist of their age, educational attainment, civil status, occupation, number of children living with them, monthly income and membership status. The following tables show the data and information concerning the profile of the respondents of the study.
a. AGE
Based from the results, the ages of the respondents are ranging from 26 to 61 and above.
Table 1.1 Age of the respondents
Age 26-30 31-35 36-40 41-45 46-50 51-55 56-60 61 & Above Total
Frequency 15 39 59 39 48 34 34 21 289
Percent 5.2 13.5 20.4 13.5 16.6 11.8 11.8 7.3 100.0
Table 1.1 shows that there are only 15 of the total respondents who have the age of 26 to 30 and 39 of them were 31 to 35. There are also 59 has the age of 36 to 40 and 39 are 41 to 45. The number of respondents with 46 to 50 years old was 48 and 34 among them were at the age of 51 to 56. 34 respondents are at the age of 56 to 60 and only 21 of the total respondents have the age of 61 and above. It was shown that the most prominent among the ages was respondents having the age of 36 to 40. The aforementioned ages by the respondents were important to this study to analyze which age has the least capability to repay a loan.
b. EDUCATIONAL ATTAINMENT
According to the gathered data, the highest education of the beneficiaries which they completed is stated in the table. This helped the researchers to determine whether
the beneficiaries were knowledgeable enough and has the ability to understand how the microfinance could help them especially to their socio economic development.
Table 1.2
Educational Attainment
Frequency Elementary Undergraduate 2 Elementary Graduate 61 High School Undergraduate 60 High School Graduate 101 College Undergraduate 39 College Graduate 22 Vocational 4 Total 289 Educational attainment
Percent .7 21.1 20.8 34.9 13.5 7.6 1.4 100.0
Table 1.2 illustrated that majority of the beneficiaries attained high school graduate with 34.9 percent (101 out of 289). It was followed by 61 of respondents who only graduated elementary. Only 2 of the total respondents were elementary undergraduate and 60 of them were high school undergraduate. There are also 39 of the total respondents who were college undergraduate, 22 have graduated college and 4 who took vocational. Since majority of the beneficiaries were only elementary graduates, there is a tendency that most of them have less knowledge in handling the money that the institution had provided.
c. CIVIL STATUS Table 1.3 Frequency and percentage of the civil status of the beneficiaries
Civil Status
Single Married Total
Frequency
4 285 289
Perce nt 1.4 98.6 100
It was shown in table 1.3 that there are only 1.4 percent (4 out of 289) of respondents were single and 98.6 percent of them were married. It only shows that the majority of the respondents were in need of supporting their own family that’s why they are being encouraged to engage in microfinance institution.
Table 1.4 Occupations Government employee and Self-Employed
Governmen t Employee
Frequency
Percent
SelfEmployed
Teacher
5
23.8
Store Owner
Office Clerk
2
9.5
Buy and Sell
Others
14
66.7
Total
21
100
Farm Owner Others Total
Frequenc y
Percen t
73 93
27 34
57 49
21 18
268
100
d. OCCUPATION
The occupation of the beneficiaries is divided into two groups. First is government employee wherein they can be a teacher, office clerks and others. Second is self employed which can be a store owner, buy and sell, farm owner and others. Table 1.4 shows that majority of the beneficiaries were self employed. Only 7 percent of the total respondents were government employee. There are 5 of them who were teachers, 2 were office clerks and 14 have other jobs in the government. Majority of the self- employed respondents were buying and selling different types of products. There are also 73 of the beneficiaries who are able to have their own stores. 57 of them were farm owners only 49 were having other types of business where they were working.
Table 1.5 Number of children
No. Children 0-2 3-5
6-8 9 & Above Total
of Frequency
Percent
92 170
31.8 58.8
19 8 289
6.6 2.8 100.0
e. NO. OF CHILDREN LIVING WITH THEM
It was revealed in table 1.5 that there are 170 of the respondents have 3 to 5 children who were living with them. 92 of the total respondents have 2 children and 19 have 6 to 8. There are only 8 of them who were having 9 children and above. The beneficiaries prefer to engage to microfinance institution wherein they are able to borrow money to support the needs of their children especially on their educations.
f. MONTHLY INCOME
In this study, the researchers find out the monthly income of the beneficiaries. Respondents would like to increase their incomes. They believe that engaging in a microfinance institution can solve their problem regarding their monthly income. Table 1.6 Monthly Income Monthly Income
Frequen cy P 1, 000- 3, 74 999 4, 000- 6999 100 7, 000- 9, 999 68 10, 000- 12, 31 999 13, 000- 15, 14 999 16, 000 & 2 Above Total 289
Percen t 25.6
34.6 23.5 10.7 4.8 .7 100.0
Table 1.6 illustrated the monthly income of the beneficiaries. It was revealed that there are only 2 of the total respondents have the income of P 16, 000 and above. Many of them have only P 4, 000 to P 6, 999 with the number of 100 respondents. There are 74 respondents who have only P 1, 000 to P 3, 999 monthly incomes. 68 of the respondents have the income of P 7, 000 to P 9, 999, 31 respondents with P 10, 000 to P 12, 999 and 14 respondents who have P 13, 000 to P 15, 999 monthly incomes. g. MEMBERSHIP STATUS
This includes the number of years beneficiaries were availing the program of the institution, their latest loans, and if they are still availing other microfinance other than Socio- Economic Development Program Inc.
Number of Years in SEDP Inc.
This states the number of years the beneficiaries are being part of the institution. Table 1.7 No. Of Years in SEDP Inc . No. of years Frequen in SEDP cy Inc. 1-3 63 4-6 132 7-9 58 10 or more 36 Total 289
Percent
21.8 45.7 20.1 8.0 100.0
Table 1.7 illustrated that there are 63 of the total respondents were already 1 to 3 years as part of the institution. Majority of the respondents were 4 to 6 years in SEDP
Inc. as a member of the institution. 56 of the respondents spent 7 to 9 years and only 36 of them are 10 years and above in the institution. Latest Loan
Based from the responses of the beneficiaries, their latest loans are ranging from P 3, 000 as their initial loan to P 35, 000 as the highest loans which they acquired from the institution. P 3, 000 as the smallest amount is the loan that a newly member can only obtain and can be increased depending on cycle which they can continuously obtain a loan. They can acquire loans every after their final payment of their current loan. P35, 000 as a loan can be attained if a member is already 12-15 years in SEDP Inc. Table 1.8
Latest Loans Latest Loan
P 3, 000999 6, 000999 9, 000999 12, 000999 15000 20000.00 22000.00 22500.00 25000.00 35000.00 Total
5,
Frequency 30
Percent 10.4
8,
2
.7
11,
127
44
14,
42
14.5
38 11 6 2 27 6 289
13.1 3.8 2.1 .7 9.3 2.1 100.0
As shown on Table 1.8, there are 30 of the total respondents who have a latest loan of P 3, 000 to P 5, 999 and only two respondents having a loan of P 6, 000 to P 8, 999. There are also 42 of the respondents having their latest loan of P 12, 000 to P 14, 999 and 38 respondents with P 15, 000. 6 of them have their latest loan of P 22, 000, 2 respondents with P 22, 500, 27 respondents with P 25, 000, and only 6 of the total respondents having the latest loan of P 35, 000.
Received other help from other microfinance rather than SEPD Inc.
Table 1.9.1 Frequency and percentage of beneficiaries who receives other help from other microfinance
No Yes Total
Frequency 229 60 289
Percent 79.2 20.8 100.0
Table 1.9 illustrated that majority of the total respondents does not receive any other help from other microfinance institution rather than Socio- Economic Development Program Inc. only 60 of them availed from other institutions such as Tulong sa PagUnlad, Inc. (TSPI) Center for Agriculture and Rural Development (CARD), Happy Lending Institution, Intertrade, Agricultural and Rural Development for Catanduanes, Inc. (ARDCI), and others.
Table 1.9.2 Other Microfinance Institutions Other Microfinance Institutions None TSPI CARD HLIP INTERTRADE ARDCI Others Total
Frequency
Percent
225 23 21 4 6 3 7 289
77.9 8.0 7.3 1.4 2.1 1.0 2.4 100.0
Table 1.9.2 shows the various other microfinance wherein some other beneficiaries of SEDP, Inc. availed loans. There are 23 of the respondents who borrowed money from TSPI, 21 respondents loaned from CARD Inc., only 4 of them availed on HLIP, 6 respondents borrowed money from INTERTRADE and 3 of them availed loans from ARDCI. There are also 7 of the total respondents borrowed from other microfinance not stated above.
II.
SOCIO-
ECONOMIC
FACTORS
THAT
MOTIVATED
BENEFICIARIES
IN
AVAILING MICROFINANCE
This includes the socio- economic factors that could be the reason to motivate the beneficiaries who obtained loan from microfinance.
Table 2 Frequency, percent and ranking distribution of respondents by the SocioEconomic Factors which motivated beneficiaries from availing microfinance
Socio-Economic Factors
Frequency
Percent
Rank
Additional Capital
201
69.6
1
Education of children
182
63
2
Long-term loan
131
45.33
3
Low percent interest loan
128
44.29
4
Capital for business
92
31.83
5
87
30.1
6
and 40
13.8
7
23
8
8
13
4.5
9
10
3.46
10
a
new
Renovation of House Medical Emergencies No job Construction house Others
of
new
Table 2 shows the frequency, percent and ranking distribution of respondents by the socio-economic factors that motivated them to avail microfinance. It reveals that most of the respondents who engage in availing of microfinance loan utilized the amount loaned for their additional capital. They acquire loan in order to increase their income through loans from lending institutions and adjoin the money to their capital on
business. It also shows that the amount loaned was used for capital for their new business. According to them, they can build a new business through their loans from the institution. It also revealed that they are encouraged to engage in microfinance so that they can be able to renovate their house and construct their houses. One of the reasons on availing a lending institution is that its loan is a long term and has a low interest loan. They also utilized the amount loaned for the medical and emergencies on their family and other said that they are not able to find a job. Through microfinance, they can earn money by investing it in a proper way.
III. PERCEIVED GAINS OF THE BENEFICIARIES ON MICROFINANCE Table 3.1 Perceived gains as a businesswoman of the beneficiaries on microfinance
Perceived Gains as a businesswoman
Frequen cy
Percent
Capital for a new business Business Expansion
92
31.8
22
7.6
Additional capital
197
68.2
Total
289
100.0
Business Type
Percent
Buy and Sell
Frequen cy 56
62
Handicraft Food Production Services Others Total
3 5 4 24 92
3 5 4 26 100
a. AS A BUSINESSWOMAN
As shown in table 3.1, the perceived gains of the beneficiaries on microfinance are the following: there are 92 of the respondents believed that they were able to build their own business through their loaned money from microfinance, 22 respondents said that they were able to expand their business, and 197 believed that the amount loaned from microfinance had helped them to increase their capital on their business. Having a capital for their new business, beneficiaries were engage to businesses such as buy and sell, handicraft, food production, services and others. Majority of them used the borrowed money in buying and selling various types of products. There are only 3 of the respondents who used loaned money for handicraft. Some of them used the loaned money for food production, services and others.
Table 3.2 Perceived gains on attitudes Perceived attitude
gains
on Frequency
Percent
Rank
Became more disciplined
204
70.6
1
Leaned to save Developed self and group awareness Became more diligent
153 59
52.9 20.4
4 6
167
57.8
3
Became more responsible
200
69.2
2
Developed leadership skill Learned to communicate with others
17 98
5.9 33.9
7 5
b. ATTITUDES
Table 3.2 shows that 70.6 percent of the beneficiaries developed their discipline. With their loans, they learned how to spend their money properly and wisely. 153 of the total respondents also believed that they learned to save. By the amount they loaned, they became aware on how to allocate their money so that they can repay their loans on time. 59 of them said that they developed their self and group awareness. Through weekly meetings, they were able to know each other better. 167 respondents became more diligent. They became more industrious to be able to repay loans weekly. 200 of them also became more responsible because of their obligation to pay amount loaned and 17 of them said that they were able to develop their leadership skill. Every center has center chief who is responsible for manage all group members and checking if which member could not repay on the weekly meeting. There are also 98 who believed that they learned to communicate with others. In some instances, some of the group members could not repay weekly, by proper communication they were able to provide money from their group mates and can pay for the weekly collection of loans. c. IN THE FAMILY
There are also benefits in the family by availing of lending institution loan. These are determined through the responses of the respondents.
Table 3.3 Perceived gains in the family Perceived gains in the family
Increased family income
Frequen cy 227
Perce nt 78.5
Rank
Used for education of children
206
71.3
2
Used for renovation of house
116
40.1
4
Offered trainings Used for construction of new house Used for medicines and emergencies Others
119 28
41.2 9.7
3 6
57
19.7
5
13
4.5
7
1
The table illustrated the perceived gains in the family of the beneficiaries’ of the microfinance. It revealed that many of them have increased their family income. By investing the amount loaned, they were able to raise their family income. Others were able to send their children to school. They utilized the money loaned for buying of school materials, for allowances and most importantly for settling the tuition fees. Some of them are able to renovate their houses. The institution also offered trainings and seminars which enabled them to gain new ideas concerning business enhancement. Other respondents were able to construct their houses and some has used for medicines and emergency cases on their family. IV. NEGATIVE EFFECTS OF MICROFINANCE TO BENEFICIARIES
There are some problems faced by the beneficiaries that lead to negative effects of microfinance to the beneficiaries. Based from the data gathered, the negative effects
are consisted with the following: non- cooperation of group members, being dependent on the SEDP, Inc., difficulty in repaying the loan and slow processing of loans.
Table 4 Negative effects of the microfinance to the beneficiaries Negative effects
Frequency
Percent
Rank
Non- cooperation of group member
136
47.1
1.5
Difficulty in repaying loans
136
47.1
1.5
11
3.8
3
7 3
2.4 1.0
4 5
Being dependent to microfinance Slow processing of loans Others
As shown in table 4, majority of the beneficiaries have affected by the noncooperation of group members and difficulty of repaying their loans. There are also 11 of them who revealed that they became dependent to SEDP, Inc.. they did not find other source of capital or money rather than microfinance. There are only 7 respondents who said that the institution was slow in processing of loans and 3 of them share other negative effects.
CHAPTER IV SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
This chapter presents the summary, findings and conclusions from which the recommendations were drawn to give value to the result of the study.
SUMMARY OF FINDINGS
This study was conducted to determine the perceived gains and negative effects of programs and practices of socio- economic Development program, Inc. in Ligao City. Specifically, the study sought answers to the following questions: 1. What is the profile of the beneficiaries in terms of: f) Age g) Educational background h) Civil status i)
Occupation
j) Number of children k) Monthly income l) Respondents membership status 2. What are the socio-economic factors that motivate households on availing the microfinance?
3. What are the perceived gains of the beneficiaries on availing the microfinance? 4. What are the negative effects of the beneficiaries on availing the microfinance? 5. What are the ways to reduce the effect of microfinance? This study used descriptive method in determining the perception of the beneficiaries towards the effects of the programs and practices of Socio-Economic Development Program, Inc. in Ligao City. The researchers used questionnaires in gathering data. Two hundred eighty nine (289) were the key informants of this study. The data gathered were analyzed using frequency count, percentage rating ad ranking as statistical tools.
FINDINGS
Based on the results of the study, the following findings were revealed. 1. a. Age- The age of the respondents is ranging from twenty six (26) to sixty (60) and above. Based from the responses, there are beneficiaries with the age of seventy two (72). There are only fifteen of them were at the age of twenty six (26) to thirty (30) and thirty nine (39) respondents were thirty one (31) to thirty five (35). Fifty nine (59) of the respondents were thirty six (36) to forty ( 40) years of age and thirty nine (39) of them with forty one (41) to forty five (45)
ages. There are also forty eight (48)
respondents who were at the age of forty six (46) to fifty (50) and thirty four (34) among them were fifty one (51) to fifty six (56) years of age. b. Educational attainment- majority of the respondents (101) were high school graduate. There are sixty one (61) of the respondents who only graduated elementary and two (2) respondents were elementary undergraduate. Thirty nine (39) of them were college undergraduate and twenty two (22) respondents who completely attained their college degree. There are also 4 respondents who took vocational. c. Civil status- mostly, the respondents were married two hundred eighty five (285). Only few of them which are four (4) respondents were single. d. Occupation- majority of the respondents were self employed with the number of 268. The remaining twenty one (21) of them were working in the government. Five (5) of the respondents were teachers and two (2) of them wee office clerks. Fourteen (14) of the government employed were barangay health worker and DSWD foster parent. Ninety three (93) of the total number of respondents was buying and selling of various types of products, seventy three (73) respondents having their stores and fifty seven (57) respondents were farm owners (rice, corn, vegetables, etc.). The rest of the respondents (49) were having employed to other types of business like direct selling, ladies accessories, piggery, franchise dealer, food vending and vegetable vending. e. Number of children living with you. One hundred seventy (170) of the respondents have 3 to 5 children. Ninety two (92) of the total respondents have 2 children and below and 19 of them have 6 to 8 children. There are only eight (8) of them who have 9 children and above.
f. Monthly income- only two of the total respondents have a monthly income of P 16, 000 and above. Majority of the respondents (100) have only P 4, 000 to 6, 999 monthly income. There are 74 respondents revealed that they have P 1, 000 to 3, 999 monthly incomes. 68 respondents have P 7, 000 to 9, 999 monthly income, 31 respondents with P 10, 000 to P 12, 999 and 14 respondents who have P 13, 000 to 15, 999 monthly incomes. g. Membership status- in terms of number of years they were availing of the microfinance, majority of the respondents were 4 to 6 years as a member of the institution. 56 of the respondents were 7 to 9 years and 36 of them are 10 years and above in the institution. As to latest loan, there are 30 respondents who have a latest loan of P 3, 000 to 5, 999 and 2 respondents having P 6, 000 to P 8, 999 loan. 42 of them have P 12, 000 to 14, 999 latest loan and 38 respondents with P 15, 000. 6 of them have P 22, 000, 2 respondents with P 22, 500, 27 respondents with P 25, 000, and 6 of them having the latest loan of P 35, 000. Majority(78 %) of the respondents did not avail other loans from other institutions. Only 22 % of them availed. 2. As to socio economic factors that motivated beneficiaries on availing of microfinance, it revealed that most of the respondents need to increase their capital with 201 respondents and 182 of them revealed that they need money for the education of their children. 131 said that it ia a long term loan and 128 revealed that the interest rate of the institution is low.92 of them said that they used the loan for capital in a new business and 87 said that they need to renovate their houses. 40 said that it would be in medicines and emergencies, 23 are unemployed and 13 for the construction of their house. Only 10 of them were having other motivators in availing loan.
3. Perceived gains- as a business woman, majority revealed that they have used the amount loaned for additional capital of their existing business. 22 of the respondents have used the money for business expansion and 92 of them said that they used it for additional capital for their businesses such as buy and sell (62 %), handicraft (3%), food production (5%), services (4%) and others (26 %). In terms o perceived gains to attitude, 204 of them became more disciplined, 153 have learned to save, fifty nine (59) respondents developed self and group awareness and 167 became more diligent. There is also a lot of respondents who became more responsible, only seventeen (17) developed their leadership skill and 98 of the respondents learned to communicate with others. In the family, majority have increase their income, 206 used the loaned money in education of children, one hundred sixteen (116) have renovated their house, one hundred nineteen (119) said that institutions have offered trainings, twenty eight (28) of them were able to built their new house, fifty seven (57) respondents have used amount loaned for medicines and emergencies and 13 respondents used money borrowed in other matters. 4. As to negative effects of microfinance to its beneficiaries, same number of respondents revealed that their group members did not cooperate. Eleven (11) of them became independent on microfinance, there are also 7 who said that their processing was slow and 3 other effects were revealed. 5. There are a number of suggestions given by the respondents to reduce the effect of microfinance of microfinance to their lives. 143 of the total respondents which are 49 percent gave their suggestions regarding the reduction of the effects of engaging in the institution.
CONCLUSIONS
Based on the significant findings of the study, the following conclusions are deduced: 1. Majority of the beneficiaries are at the age of 36 to 40. These ages are in need of source of income because they were not able to find a job especially in rural areas. They prefer to engage in this institution to be able to have fund for whatever they are planning for. Many of the respondents are only high school graduate. They are less knowledgeable on how to handle their money borrowed and less aware of the possible effect of lending institutions to their lives. Majority of the beneficiaries are married. They need to have a source of income in order to help and support their families. 170 of the respondents have 3 to 5 children. By availing of microfinance, they believe that they can support the needs of their children. Mostly, the monthly income of the respondents is ranging P 4, 000 to 6, 999. This is very small amount and not enough to support the needs of the family and one of the reasons why beneficiaries availed the program. Most of the beneficiaries were 4 to 6 years availing the loan. They preferred to stay as a member of microfinance to continuously finance their businesses. Majority of respondents have the latest loan of 9, 000 to 11, 999. It shows that it also increases the needs of the respondents for financial of their activities or businesses. There are 60 of the respondents who are still availing other microfinance. This shows that other beneficiaries are not contented with the program that SEDP Inc. has provided for them.
2. Most of the respondents stated that they need to have an additional capital. They believe that availing of lending institution loan like Socio- Economic Development Program Inc. is the easiest way to increase their capital in their existing business. 3. Mostly, additional capital is the primary gains that beneficiaries have perceived. They have their own business, however, they still avail microfinance to increase their capital. In their attitude, most of them have developed their discipline. Because of the obligation they accepted, they now have to repay their loans. Majority of the respondents have increased their income. By investing their amount loans practically, they can increase their loans. 4. The same number of respondents have affected by the non cooperation of group members and difficulty in repaying of loans. 5. Many of the respondents suggested different ways to reduce the negative effect of microfinance to their lives. By suggesting such ways, they believed that this can help them to lessen the effects. RECOMMENDATIONS
1. The Socio- Economic Development Program should improve their recruitment process and add some qualifications for their incoming members so that it would help to lessen the problems faced by the current members. They should improve their program and services so that their beneficiaries will be contented on the institution and will not avail from other microfinance. 2. By the suggestions given, the institution should not recruit those who are not capable of repaying a loan. They should make sure that the person to be recruited is recognized by the current member from a certain center. And current
