Assessment of the Financial Literacy and Loan Repayment of Vegetable Farmer-Borrowers of Kinatihan 1 Multi-Purpose Cooperative and Yakap at Halik Multi-Purpose Cooperative Quezon 1, Candelaria and Dolores, Quezon, 2019

Date

6-2021

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Christian Paul L. Fang

Committee Member

Julieta A. Delos Reyes, Agham C. Cuevas

Abstract

This study aimed to assess the financial literacy and loan repayment performance of the vegetable farmer-borrowers of Kinatihan 1 Multi-Purpose Cooperative (K1MPC) and Yakap at Halik Multi-Purpose Cooperative Quezon 1 (YHMPCQ1). The specific objectives were to: 1) describe the financial literacy and loan repayment performance of the vegetable farmer-borrowers in K1MPC and YHMPCQ1, 2) determine the association between financial literacy and loan repayment of the vegetable farmer-borrowers, 3) determine the other factors associated with financial literacy of the vegetable farmer-borrowers, and 4) identify the issues related to financial literacy and loan repayment of the farmer-borrowers, and provide recommendations to address these issues. The mentioned objectives were achieved by analyzing the primary data gathered from self-administered surveys using pre-tested questionnaires.

The financial literacy of 76 vegetable farmers-borrowers of the two cooperatives in Candelaria and Dolores, Quezon was described using descriptive analysis and assessed in terms of their financial knowledge, financial attitude, and financial behavior. Two-proportion z-test and independent two-sample t-test (two-tailed t-test) were used to determine the significant difference in proportions between the qualitative socio-economic characteristics and the significance of the mean differences in the levels of financial literacy scores, loan repayment rates, and quantitative socio-economic characteristics, respectively, of the vegetable farmer-borrowers in both cooperatives. Lastly, the association between financial literacy and loan repayment, as well as the other factors associated with financial literacy and its components, were determined using Chi- Square Analysis of Independence.

The study revealed that vegetable farmer-borrowers from YHMPCQ1 had significantly higher financial literacy level than the farmer-borrowers from K1MPC which indicates that the respondents from YHMPCQ1 performed better on financial knowledge, financial attitude, and financial behavior. YHMPCQ1 attained high financial literacy level while K1MPC attained medium financial literacy level. Overall, the financial literacy level of the 76 vegetable farmer- borrowers was medium. In terms of loan repayment performance, the respondents from YHMPCQ1 also had significantly higher loan repayment rate than the respondents from K1MPC.

The result of the chi-square test showed significant strong association between financial literacy and repayment rate at α<0.01 since all the financial literacy components had significant associations with repayment rate. Moreover, the frequency of loan monitoring had a significant relatively strong association with financial literacy at α<0.01, educational attainment had a significant moderate association with financial literacy at α<0.01, age, sex, and having bank account had significant moderate associations with financial literacy at α<0.05, and family size, attendance in financial program, and frequency of bank visit had significant moderate associations with financial literacy at α<0.10.

Based on the results, the following were recommended: (1) financial advisors should be hired to perform regular financial literacy consultations and check-ups for the farmer-borrowers, (2) contracts or written agreements can be provided by the cooperatives to the farmer-borrowers, (3) frequent loan monitoring and collection should be conducted, (4) workshops on value-addition practices and marketing assistance can be crafted and provided to the farmer-borrowers, and (5) construction of farm-to-market roads must be given priority in the affected areas.

Language

English

LC Subject

Financial literacy, Cooperative societies

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2021 A14 C84

Notes

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Document Type

Thesis

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