Credit utilization and loan repayment performance of the member-borrowers of the Balikatang Pamayanan ng Inaon Multi-Purpose Cooperative in Pulilan, Bulacan, 2011

Date

3-2012

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Marilyn M. Elauria

Committee Member

Prudenciano U. Gordoncillo

Abstract

The study evaluated the credit utilization and loan repayment performance of the member-borrowers of the Balikatang Pamayanan ng Inaon Multi-Purpose Cooperative (BPIMPC) in Pulilan, Bulacan. The study considered the first cropping season for the months of January to April 2011. Data collected from 50 member-borrower-respondents were analyzed using descriptive method, Pearson’s correlation coefficient, multiple linear regression and t-test analysis. They were further classified according to the type of loan they borrowed: agricultural input, cash only, and input and cash. Results revealed that member-borrowers were elderly and heads of the family with an average household size of five heads. They were identified to be palay farmers who were agrarian reform beneficiaries. The average farm size of 1.66 ha cultivated by the respondents indicates the small-scale nature of their farming business. On the average, their income from other sources was at P4,408.50 per month. The total loan granted by BPIMPC to 50 respondents for the first period of 2011 was P763,400: P383,105 in terms of agricultural input and P380,295 in terms of cash. Fourteen percent of the respondents borrowed input only, 54% borrowed cash only, and 32% borrowed both input and cash. It was revealed that members who borrowed loans with agricultural input utilized more of their cash loans to the intended purpose while those who borrowed cash only utilized their loan as capital for other income sources. Total repayment rate of loan granted in terms of cash only was at 55.89% while that of agricultural input, and input and cash were at 66.66% and 66.80% respectively. Correlation analysis found that the repayment rate of 63.87% was associated with the borrower’s household size, membership in BPIMPC, amount of loan, farm size and net farm income. Results of the multiple linear regression showed that household size, years of membership in BPIMPC, and amount of loan had a significant negative relationship with repayment rate while farm size and net farm income per hectare established a significant positive relationship with the repayment rate. The result of the repayment function showed that 49.52% of the variations in the repayment rate can be explained by the factors mentioned. Moreover, result of the t-test analysis showed that the availability of other sources of loan was not significant on the variations of the repayment rate. The level of satisfaction of the member-borrowers on the micro-lending program was also analyzed descriptively. It was found out that borrowers were generally very satisfied with the loan application and its release. Regarding the interest rate, some respondents were satisfied, stating that their 3.5% interest rate was lower than other available loan sources while some were dissatisfied stating that it was high compared to other cooperatives. Moreover, on the loan collection and penalty implementation, respondents were generally satisfied. The study recommends that for the betterment of the program, BPIMPC should build member’s trust, educate the members and make them involved in the different activities of the cooperative. They should provide seminars and crop training. Borrowers with older membership must be given more attention and may be re-oriented.

Language

English

Call Number

Thesis

Document Type

Thesis

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