Effects of Social Capital on Savings within Village Savings and Loan Associations (VSLAS) in Sorsogon City, 2025

Date

6-2025

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jaymee A. Cabangbang

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

Request Access

For non-UP researchers, requests for access to this material may be directed to the CEM Library at cemlibrary.uplb@up.edu.ph or to the UKDR administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

Village Savings and Loan Associations (VSLAs) are grassroots microfinance models that provide alternatives to formal banking in rural and underserved communities. These associations function not only through financial mechanisms but also through internal group dynamics, such as trust, mutual support, and cohesion. This study, using Partial Least Squares Structural Equation Modeling (PLS-SEM) with data from 52 members of the Gimaloto Community Savings and Loan Association (CoSLA) in Barangay Gimaloto, Sorsogon City, explored the effects of social capital on savings and whether social capital serves as a mediating factor between socio-economic characteristics and savings and attendance.

Based on data collected through guided questionnaires, most members were women aged 30-44, high school graduates, and either unemployed or self-employed in small trades. With an average membership of under three years, members demonstrated consistent attendance and savings contributions. They reported strong informal networks, high levels of trust, and moderate group involvement, indicating medium to high levels of social capital. PLS-SEM analysis revealed that age positively and significantly influences social capital, while VSLA membership length positively and significantly influences attendance rate, suggesting that older members tend to report higher levels of social capital, and longer VSLA membership is associated with more consistent attendance. However, social capital was not found to mediate the relationship between socio-economic characteristics and the amount of savings and attendance. The measurement model demonstrated strong reliability and validity, although it showed modest explanatory power—typical in exploratory research involving relatively homogeneous samples. These findings suggest that while social capital is a relevant factor in informal, community-managed microfinance models, other variables and cultural contexts may also influence savings and participation in VSLAs.

The study underscored the relevance of VSLAs in Sorsogon City as accessible, community-driven financial mechanisms that foster savings participation and social cohesion in underserved rural areas. Following the results of the analysis, it is recommended that VSLAs strengthen their internal support systems, promote member retention, and extend financial literacy and leadership training to all members. At the policy level, stakeholders are encouraged to support these groups through improved infrastructure and greater access to formal financial services. Future research may explore other potential mediating or moderating variables, alternative sampling approaches, diverse observed variables, broader outcome measures, and longitudinal studies to enhance understanding of the impact and long-term sustainability of VSLAs.

Language

English

LC Subject

Savings and loan associations, Capital--Social aspects

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 A14 L63

Notes

Viewing access to electronic resources is restricted solely to UP Gmail accounts. Any access and share requests from external organizations and personal email accounts will be promptly declined.

Document Type

Thesis

Link to Full Text

Share

COinS