Evaluation of Loan Utilization and Repayment Performance of the Fish Cage Operator-Borrowers of Balakilong Credit Cooperative in Laurel, Batangas, 2010

Date

5-2011

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Corazon T. Dragon

Committee Member

Prudenciano U. Gordoncillo, Flordeliza A. Lantican

Abstract

The general objective of the study was to evaluate the loan utilization and repayment performance of the 30 fish cage operator-borrowers of Balakilong Credit Cooperative in Laurel, Batangas. The study utilized both primary and secondary data. Primary data were gathered through personal interviews of fish cage operator-borrowers. Secondary data were obtained from the loan records of the Balakilong Credit Cooperative. Descriptive analysis, cost and return analysis, t-test of means and cash flow analysis were the analytical tools used in the study. Findings of the study showed that of the 30 tilapia cage operator-borrowers interviewed, 21 partially utilized their loans as operating capital for their tilapia cage operation. On the average, they borrowed PhP 37,619 per farm from the cooperative, but utilized only PhP12,038 or 32 percent of their total loan for tilapia cage culture because they used part of their loan as capital to pay other loans and to defray for household expenses. On the other hand, nine tilapia cage operator-borrowers fully diverted the loans that they borrowed from the cooperative. On the average, they borrowed PhP 47,222 per farm for tilapia cage operation, but they instead utilized their loans to defray for household expenses on food, children’s education and medicines and as capital for their swine production enterprise and sari-sari store business. As revealed in the study, those who partially utilized their loans for tilapia cage culture obtained higher net cash income (PhP 5.23 million) and net income (PhP 1.10 million) than those who fully diverted their loans from the cooperative (PhP 4.31 million and PhP 805,262, respectively) because the former group operated more fish cages than the latter group. The positive net income figures of both groups of borrowers indicate that their tilapia cage business was profitable. However, although the fish cage operator- borrowers who partially utilized their loans for tilapia cage operation obtained an average net income of PhP 1.10 million per farm, the contribution of their loans from the cooperative to their net income from tilapia cage operation was only PhP 3,302 since their loans from the cooperative contributed only 0.3 percent to their operating capital requirement in tilapia cage culture. For those who diverted their loans, the cooperative loans did not contribute to their net income from tilapia cage operation. The study also found that the two groups of fish cage operator-borrowers were able to fully pay their loan and interest payments on time to the Balakilong Credit Cooperative because of their positive net cash balance before loan principal and interest payments of about PhP 582,644 for those who partially utilized their loans and PhP 722,568 for those who diverted their loans, which were more than sufficient to cover their loan principal and interest payments amounting to PhP 45,143 and PhP 56,667, respectively. To improve the lending operation of the Balakilong Credit Cooperative, the following recommendations are suggested: (1) the Cooperative should provide household emergency loans to minimize the diversion of loans intended for tilapia cage operation; and (2) the Cooperative should closely monitor the loan utilization of the tilapia cage borrowers to ensure that the loans are utilized for the intended purpose.

Language

English

LC Subject

Loans, Banks and banking, Cooperative, Fish trade

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2011 A14 B37

Notes

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Document Type

Thesis

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