Factors Affecting the Ability of Corn Farmers to Repay Loans from Cooperatives in Calamba City, Laguna, 2025

Date

6-2025

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Christian Paul L. Fang

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

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Abstract

This study investigated the factors influencing the ability of corn farmers in Calamba City, Laguna to repay loans borrowed from cooperatives. As one of the city’s primary agricultural activities, corn farming plays a crucial role in local food security and rural development. However, the repayment rate among corn farmers who borrow from cooperatives remains alarmingly low, posing financial risks to both farmers and cooperative institutions. Recognizing the importance of agricultural credit in enhancing productivity and resilience, this study aimed to identify the key determinants that affect loan repayment performance in order to inform better credit management and support systems.

Data were collected from 78 corn farmer-borrowers selected through snowball sampling, as a comprehensive list of borrowers was unavailable due to data privacy restrictions. Primary data were gathered using pre-tested interview schedules, while secondary data were obtained from relevant government offices and cooperatives. The study employed descriptive statistics, Spearman’s rank correlation, and Mann-Whitney U test to assess the relationships between loan repayment rate and various independent variables, including socio-demographic characteristics, farming-related attributes, credit utilization, and cooperative loan mechanisms. Loan repayment and credit utilization rates were computed based on established formulas, and transaction costs were also quantified.

The results revealed that educational attainment, farm income, farming experience, and credit utilization significantly and positively affected loan repayment performance. Surprisingly, dependency ratio and household expenses—initially hypothesized to negatively impact repayment—were also positively correlated, suggesting that financial responsibility may motivate better loan management. On the other hand, farm ownership did not show a statistically significant association. In terms of loan mechanisms, factors such as interest rates, repayment frequency, loan type (cash vs in-kind), transaction costs, and the presence of collectors were found to influence repayment outcomes. In-kind loans, particularly those repaid through automatic deductions by cooperatives, consistently showed higher repayment rates than cash loans, underscoring the importance of cooperative-led repayment systems.

In conclusion, the study showed that loan repayment among corn farmers was influenced by a combination of personal, farming-related, and loan policy factors. The results suggested that cooperatives should strengthen financial education programs for farmers, create loan terms that align with their seasonal income, and improve loan monitoring. The study also recommended providing loans in kind to promote proper credit utilization, along with continuous monitoring for cash loans. Further research on loan policies—including repayment schedules, interest rates, and monitoring mechanisms—is encouraged to balance cooperative viability and member affordability. Additionally, profiling and capacity-building efforts should be implemented to address the root causes of loan delinquency and support responsible borrowing behavior among members.

Language

English

LC Subject

Corn industry, Farmers—Economic conditions, Loan servicing, Cooperative societies, Agriculture, Cooperative

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 A14 A38

Notes

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Document Type

Thesis

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