Effects on Financial Literacy on the Credit Score of Members of Selected Cooperatives in Calauan and San Pablo, Laguna, 2025

Date

6-2025

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Ruby Jane C. Estadilla

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

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Abstract

Credit plays an important role as an input in the agriculture sector. However, those in the sector face problems with their creditworthiness, thus affecting their credit scores and productivity. On the other hand, financial literacy is also a problem that the country faces, as according to studies, majority of Filipinos are consider financially illiterate. Given the important role played by cooperatives in enhancing inclusion by providing access to relevant services, this study primarily aimed to analyze how financial literacy affects the credit scores of cooperative members in Calauan and San Pablo City, Laguna based on their 5Cs of credit – Character, Capacity, Conditions, Capital, and Collateral. Primary data were obtained from 142 cooperative members, composed of 102 rural residents and 40 urban residents through guided survey questionnaires. Their levels of financial literacy and its components and credit scores were assessed and compared through a Mann-Whitney U Test. The determinants of credit scores and the effects of financial literacy were analyzed through a Tobit regression.

The study found that the financial literacy of the cooperative members was considered “medium”, on the brink of “low”. While their average credit score falls under the “fair” FICO classification. In terms of the rural-urban comparison, the study found that the urban cooperative members had significantly higher levels of financial literacy – in all the three components: financial knowledge, attitude, and behavior – and higher credit scores than rural cooperative members. Empirical evidence also showed that financial literacy indeed affects the credit scores of cooperative members along with age, attendance to financial programs and/or seminars, place of residence, and tenurial status. Hence, it was recommended to provide finance-related extension and provide assistance on acquisition of inputs, given that the respondents scored the lowest on “Capital”. The adoption of the credit scoring model was also recommended at the cooperative level to enhance the objectivity of credit assessment of the selected cooperatives.

Language

English

LC Subject

Financial literacy, Cooperative societies—Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 A14 M33

Notes

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Document Type

Thesis

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