Micro Financial Literacy and Accessibility: Effect on the Income Generation of Fishing Micro Enterprises in Brgy. Sampiruhan, Calamba, Laguna

Date

5-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Juan Paulino S. Trespalacio, Junior

Committee Member

Mar B. Cruz, Camille Anne E. Mendoza, Melodee Marciana E. De Castro

Abstract

The micro financial model has emerged in the Philippines during the 1960s originally offered by rural banks and cooperatives to finance agricultural related undertakings. NGO's developed a new scheme or model that aimed to cater to the struggling entrepreneurs who were experiencing low income. This scheme involved micro-financing institutions offered social services in the form of group or cooperative formations, financial literacy training and the building of management skills (Rapisura, 2019). Micro-financial services were offered with interest rates lower than banks in order to provide financial assistance that would cater to the poor and vulnerable in terms of fluctuations in income and inflation (Ramon Aboitiz Foundation, 2022). A barangay named Sampiruhan in Calamba, Laguna, was part of a recent study from Rosalina Palanca-Tan that aimed to assess the economic vulnerability of the fishing dependent households in the community, which referred to households that depend on their aquaculture enterprises for their household income. These households were found to be generating low levels of income, capital and savings (Palanca-Tan, 2020). Additionally, through further research it was determined that there were nearby micro financial institutions and that the community was also a part of literacy programs that aimed to cater to rural communities, one being the "Migrants' Role in Alleviating Rural Poverty through Microfinance in Philippines" (LPAD, 2012). Despite having nearby micro financial institutions, cooperatives and rural banks, and being a part of rural literacy programs, recent studies show that fishing enterprises in barangay Sampiruhan Calamba, Laguna are still experiencing low-income generation.

This led the researcher to conduct an assessment in terms of measuring the level of micro-financial literacy and accessibility of low-income fishing enterprises in Sampiruhan Calamba, Laguna and correlate these measures to their low-income generation. Specifically, the study aimed to (a) Identify the key players of this study such as the low-income generating fishing dependent household enterprises and the available micro financing institutions nearby Sampiruhan; (b) Explain the relationship of these institutions to income generation in low-income fishing dependent household enterprises; (c) Investigate the current level of micro financial literacy and accessibility of the low income fishing dependent household enterprises in Sampiruhan; (d) Analyze the effectiveness and limitations of micro financing being used for enhancing income generation; and (e) Develop further recommendations for the relationship between micro financing and low income fishing dependent household enterprises.

This research utilized a mix between a qualitative and quantitative approach in gathering data with the main objective of determining the correlation of micro financial literacy level and micro financial accessibility towards the income generation of the fishing enterprises. A questionnaire was crafted based on the objectives of the study that mainly focuses on measuring the level of micro financial literacy and accessibility of the respondents through the use of likert scale questions, dichotomous questions and open- ended questions. This questionnaire was administered through a guided interview setup and gathered data about the business profiles of the respondents and the level of their knowledge when it comes to micro financial literacy and how accessible micro financial institutions are in their area. Secondary data was taken from related journals, news articles, and websites on how micro-financing improves the income generating capabilities of a business. The researcher also managed to gather relevant information from undergraduate special problems, such as relevant data and possible methods of data collection. The primary tool used for data analysis was the pearson correlation test between income generation and micro financial literacy level and income generation and their level of micro financial accessibility which was followed by a percentage distribution of the answers of the respondents from the likert scale questions. This determined the level of micro financial literacy and accessibilty of the target population per category of income level. Finally, the researcher had provided a Gap analysis for the fishing community in Sampiruhan based on the responses of the enterprises, to develop strategic recommendation.

Proceeding the data gathering procedure, the results showed that the fishing community showed low levels of Micro financial literacy and low levels of perception towards accessing Micro Financial institutions. The results also showed that (1) micro financial literacy levels of the respondents are moderately positively correlated towards their income generation level while (2) micro financial accessibilty is weakly positively correlated towards income generation levels of the respondents. This meant that both variables contribute towards the income generating capabilities of the fishing enterprises however, their level of micro financial literacy contributes more than their level of perception towards accessing micro financial institutions and services.

These results was further strengthened by the results of the percentage distribution of non-likert scale questions such as, only 11.43% of the respondents approached formal institutions such as the CARD bank for financial services which is relevant considering that a study from the review of related literature, for the same population back in 2020, only 11% of Ms. Palanca-Tan's respondents also opted to approach formal institutions. This was considered as a sign of the fishing enterprise's low level of micro financial literacy and accessibility. Answers to open-ended questions also support the results of the study, since their answers vary from being hindered by the penalty of non-repayment of micro loans, the time constraint of paying back micro loans, being more confident in borrowing from informal lenders, their level of understanding about how interest works, their amount of knowledge about micro financial institutions, and their amount of current savings. Another significant trend that was identified after data gathering that those who were not part of the TUPAD Pangarap Multi-purpose Cooperative was exhibiting lower micro financial literacy and accessibility than those who were a part of it, identifying the possible role of the cooperative for the financial inclusion of the community.

Based on these conclusions, the final recommendations for developing a better connection between the community and micro finance was for the different stakeholders to play their role in bridging the gap. For the cooperative it is recommended that they should entice the registered fishing enterprises in the community whom are still non- members to join by restructuring their incentives for joining, scheduling community- wide regular micro financial literacy programs, provide information about their current linkages towards MFIs, and inviting non-members to experience their meetings as a cooperative first hand. For the barangay heads, it is recommended that they reach out to the government or outside organizations for regular micro financial literacy education while providing evidences that their community is in need of it. It is also recommended for them to reach out towards the CARD bank or other micro financial institutions near them to implement awareness campaigns for the fishing enterprises about the products and services that they can offer and information about how to use them for a business, this would be both beneficial for the community and the micro financial institutions.

For further recommendations, the researcher recommends further research about this topic to include other micro financial services to be considered for study, specifically, micro investments and micro insurances, to widen the scope of results in measuring overall micro financial literacy. The researcher also recommends to study neighboring fishing communities on what models they use to operate their enterprises as a basis of comparison. Lastly would be to explore other external factors aside from micro financial literacy and accessibility that may be affecting the income generation of the enterprises.

Language

English

LC Subject

Fisheries, Financial literacy

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 D45

Notes

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Document Type

Thesis

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