Dynamics of money lending / borrowing in a rural community in Leyt

Date

5-1995

Abstract

This study sought to determine the dynamics of moneylending /borrowing in Baybay Leyte.

Predominantly Roman Catholics and females, both the moneylenders and borrowers were middle-aged with an average of 45.45 and 43.01 years, respectively. Most of them were also native born but the moneylender were highly educated and more geographically mobile than the borrowers.

Most of both respondent groups were engaged in small business. The moneylenders considered their moneylending business as secondary source of income and earned about twice as much as that of the borrowers with an average annual income of P103,370 and P62,148, respectively.

The preference of moneylenders rather than the bank by the borrowers as source of credit rather than the bank was mainly due to the absence of collateral. The idea of moneylending/borrowing was self-initiated and the majority of moneylenders had 20 or less borrowers while majority of the borrowers obtained credit from only one moneylender. Most moneylenders required fixed maturity dates and used a simple credit instrument. The usual amount lent to a borrower was P2,000 and below with an interest rate of 5-10% per month at P20-50 per day for 37-90 days to be paid on installment basis. Character/willingness to pay/ credibility were the basis for granting credit, the borrower specifying the amount of credit. The loans were used mostly for capital in business and for children's education. The moneylenders perceived that their moneylending fostered closer relationship with the borrowers and to some extent helped the latter financially.

Majority of the moneylenders had an unfavorable attitude towards informal lending. As a consequence many moneylenders wanted to quit in this business. Most borrowers had a favorable attitude towards borrowing and had a favorable attitude towards borrowing ad had no default in their payment of loan. Moneylenders' educational attainment was significantly related to their attitude towards informal lending while household size and attitude towards informal lending affect their lending behavior. Borrowers' organizational affiliation and household size were significantly related to their attitude towards borrowing while their annual family income and number of years in borrowing significantly affect their borrowing behavior.

Document Type

Dissertation

Degree

Doctor of Philosophy in Community Development

College

Graduate School (GS)

Adviser/Committee Chair

Pura T. Depositario

Committee Member

Obdulla F. Sison, Federico A. Cruz, Virginia PB. Samonte

Language

English

LC Subject

Rural credit--Philippines--Baybay, Leyte

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

LG 996 1995 C59 F47

Notes

Doctor of Philosophy (Community Development)

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