The effect of microedit on the socio-economic condition of microloan borrowers from SIKAP BIDANI Development Foundation Inc., Los Baños, Laguna, 2015

Date

6-2015

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Alessandro A. Manilay

Restrictions

Restricted: Not available to the general public. Access is available only after consultation with author/thesis adviser and only to those bound by the confidentiality agreement.

Abstract

The study was conducted to evaluate the effect of microcredit on the socioeconomic stability of borrowers from SIKAP BIDANI Development Foundation Inc. in Los Baños, Laguna. Primary data were obtained through questionnaires and personal interviews among the 30 microcredit borrowers from SIKAP BIDANI. Secondary data were also obtained from the institution. Descriptive statistics were used to describe the borrower respondents and their microenterprise. The increase in the number of active clients and income-poverty threshold ratio were used to measure the outreach of SIKAP BIDANI while operating self-sufficiency ratio and financial self-sufficiency ratio were used to measure its sustainability. Cost and Return Analysis was used to determine the change in net income before and after availment of microcredit. Three measures were employed to determine the socio economic condition of respondents namely: Economic empowerment index, social empowerment index and socio-economic empowerment index. Findings of the study showed that SIKAP BIDANI exhibited a 1.01% growth rate in active clients for the year 2013-2014 which is below the 5% standard. On the other hand, the income-poverty threshold ratio of the respondents was 314.91% which is above 100% implying that SIKAP BIDANI had a poor performance in terms of outreach. For its sustainability, SIKAP BIDANI had an operational self-sufficiency ratio equal to 1.27 which is above the 1.2 standard while the institution had a financial self-sufficiency ratio equal to 1.26 which is also above the 1.0 standard implying that SIKAP BIDANI is a sustainable microfinance institution. The respondents had a Php 2,940.56 increase in income after availing microcredit and this increased income was statistically significant at 5% significance level. The socio-economic condition of respondents improved as there was a 19.62 increase on the economic empowerment index, 11.63 increase on the social empowerment index and 19.33 increase on the socio-economic empowerment index of the respondents after availing microcredit. The increase on the economic, social and economic empowerment index were also significant at 5% significance level. The respondents encountered a problem on the lending mechanisms and policies of SIKAP BIDANI including: 1) amount of loan 2) requirements for application 3) timeliness of loan release 4) duration of repayment, collection of procedure 5) interest rates and 6) technical support. Meanwhile, SIKAP BIDANI cited that the problems encountered include: 1) attendance to center meetings 2) loan delinquency 3) changing the type of microenterprise without prior notice and 4) no established centers. Based on the results of the study, SIKAP BIDANI Development Foundation Inc. is recommended to: 1) publicize the institution to recruit more members 2) practice thorough client selection to determine if the client fits the target income class 3) update their members regularly 4) give incentives to good members 5) assistance for members covering the payment of their groupmates and 6) include other services such as calamity loan.

Language

English

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

Thesis

Document Type

Thesis

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