Factors affecting hog raiser- borrower's decision in the selection of credit sources in Laguna, 2010

Date

4-2011

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Salvador P. Catelo

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Abstract

The study was carried out primarily to analyze the factors affecting the decision of hog raiser-borrowers in the selection of credit sources in Laguna. Primary data were gathered from 60 hog raisers who borrowed from formal and informal credit sources. Descriptive analysis, funds flow analysis, test of means and chi-square test of independence were employed to analyze the data. The formal sources of credit by farmer-respondents were cooperatives and microfinance institutions while feed dealers, contract growers, farmer-lenders, relatives, friends and private moneylender composed the informal credit sources. Forty-percent of hog raiser-respondents tapped the credit services by cooperative, which implies that membership in cooperative organization helped agricultural farmers in the acquisition. In terms of capital requirement, breeding and fattening required an average of P9,711 and P5,911 per hog, respectively. The largest proportion of operating capital came from loan, suggesting the indispensable role of credit in hog farming. Net income per hog was higher in fattening which explains why majority of respondents engaged in this type of operation. In general, informal borrowers had higher net return per hog in a year. Based on test of means, transaction cost incurred by formal borrowers were significantly higher than that of the informal borrowers. Results showed that farmers’ decision on the source of credit depend on household income, amount of loan, maturity of credit, interest rate, transaction cost, linkage with contract grower, awareness and timely release of loan. Cooperatives should increase the loan ceiling so that hog farmers can avail of larger amount. The mode of payment in cooperatives should also be maintained on a lump sum basis. Finally, microfinance institution should be more aggressive in information dissemination drive.

Language

English

Document Type

Thesis

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