BIBLIOGRAPHY KIWA-EN, DOMINGA G. APRIL 2007....
BIBLIOGRAPHY
KIWA-EN, DOMINGA G. APRIL 2007. Factors Affecting Loan Payment
Delinqunecy of La Trinidad Vegetable Trading Post Multi-Purpose Cooperative, in La
Trinidad, Benguet. Benguet State University, La Trinidad, Benguet.
Adviser: Luke E. Cuangey, BSc
ABSTRACT
This study looked into the factors affecting loan delinquencies of La Trinidad
Vegetable Trading Post Multipurpose Cooperative (LTVTP-MPC) in La Trinidad,
Benguet in order to solve this problem and find out possible solutions. Specifically, the
study aimed to determine; a) percentage of loan delinquencies and factors affecting loan
delinquencies; b) problems encountered by member-borrowers on loan payment; c)
problems of LTVTP-MPC in granting loans; d) sources of funds for the payment of
loans; e) measures employed by LTVTP-MPC to reduce loan delinquencies; and f)
possible solutions to reduce loan delinquencies. This was conducted at La Trinidad
Vegetable Trading Post Multipurpose Cooperative with 2 officers and staff and 58
member- borrowers of the cooperative as respondents.
Majority of the respondents were female, married with ages ranging from 31 to 50
years old.
Results from the average percentage of loan delinquency of LTVTP-MPC showed
that agricultural loan has the highest percentage of delinquency at 60%. This could be
due to the high risk in agricultural production that is beyond control of people.
Problems encountered by member-borrowers on loan payment were: no money
during collection, late release of loan; other problems such as; no income/money for the
day, shortage of capital and because of low price of vegetables. On the other hand, the
problems encountered by the cooperative officers in granting loans to member-borrowers
were: insufficient capital of member-borrowers, improper using of loans/using loans on
other purposes and insufficient documents/lack of documents.
The sources of funds for loan payment were usually from sales or profit from their
business and also borrowing of money from others to pay loans.
Solutions employed by the cooperative to improve loan collections were: re-
structuring of loan, character of member-borrowers. Other suggested solutions were
sending demand letter, impose strict collection and they should have the capacity to pay.
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TABLE OF CONTENTS
Page
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Abstract ,. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION
Historical Background of LTVTP-MPC . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
REVIEW OF LITERATURE
Factors Affecting Loan Repayment
Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Problems Encountered by Member-Borrowers
in Relation to their Loan Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Delinquent Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Enhancing the Right Attitudes to Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
6
.
The Impact of Arrearages on Lenders and
Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Collection of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Problems Encountered in Collection of Loans . . . . . . . . . . . . . . . . . . . . .
6
Attitudes of Members Towards Loan Payments . . . . . . . . . . . . . . . . . . .
7
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Attitudes of Members Toward Loan Payments . . . . . . . . . . . . . . . . . . . . .
7
Loan Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Requirements Submitted by the Borrowers
when they Applied for Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
METHODOLOGY
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Respondents of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
RESULTS AND DISCUSSION
Profile of the Respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Percentage of Loan Delinquency of La
Trinidad Vegetable Trading Post
Multi-purpose Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
.
Perceived Factors Affecting Loan
Payment Delinquency . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Problems Encountered by Member-
Borrowers on Loan Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Problems Encountered by LTVTP-MPC
in Granting Loans . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . .
16
Fund Sources of Member-Borrowers for
Loan Payment . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .
16
Measures Employed by LTVTP-MPC to
Reduce Loan Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
Suggested Solutions of LTVTP-MPC
Officer and Staff to Reduce
Delinquencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
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SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Conclusions . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .
21
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
23
APPENDICES
Letter to Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Survey Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
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1
INTRODUCTION
Historical Background of LTVTP-MPC
The La Trinidad Vegetable Trading Post Multipurpose Cooperative (LTVTP-
MPC was registered on September 9, 1992 with the Cooperative Development Authority
(CDA) under Philippine Laws as La Trinidad Vegetable Trading Post Allied Services
Cooperative (LTVTPASC) and later amended as its named today, upon insistence of the
CDA in accordance with their New Cooperative Guidelines.
Records show that the cooperative started its operation with initial build-up share
capital of thirteen thousand five hundred pesos (Php 13,500.00) only, evenly contributed
by the 15 members incorporator at Php 900.00 each.
The incorporators are: Atty Narciso U. Bolislis, Rose Alangdeo, Murphy Paayas,
Josephine Isabelo, Adolfo Pendong, Bernadette Santos, Mary Badilla, Ignacio Malinias,
Juana Bay-an, Ofelia Igualdo, Jason Erico, Simplicio Pocte, Cresencio Francisco, Emilia
Salipan, and Saturnino Gawec. They were then the Board of Trustees and Officers of the
La Trinidad Vegetables Trading Post Association, Inc. (booth holders). The officers of
the Bagsakan Association joined the cooperative by virtue of the resolution of joint
undertaking initiated by the CDA.
In the course of time, everybody joined the cooperative; being a resident of La
Trinidad, private and government employees. Businessmen and businesswomen traders
and producers engaged in vegetable industry likewise joined the cooperative leading to a
total of 897 members as of February 28, 2003. Together, they contributed a paid-up
share capital of eleven million two hundred forty thousand thirty six pesos and eighty
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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centavos (Php. 11,240,036.80) with total assets of thirty six million eighty three thousand
two hundred twenty-six pesos and sixty nine centavos (Php. 36,083,226.69), which
includes a four (4) storeys building located at Wangal, la Trinidad, Benguet.
The foregoing remarkable growth of the cooperative in ten (10) years, speaks well
of the loyalty of the management staff, the strong-well, focus-determination and
commitment of the Board of Directors and Officers and the committees that had been
serving the cooperative as volunteers in the beginning years. The continued working
interest and dedication to the cooperative deserves merit for it had been the basis in the
positioning or staff-placement in line with the cooperative internal control systems.
Statement of the Problem
This study attempted to look into the factors affecting loan delinquencies in order
to explain the problem and look into the possible solutions. Specifically, this study aimed
to answer the following questions:
1. What is the percentage of delinquent loan of LTVTP-MPC?
2. What are the factors affecting loan delinquencies?
3. What are the problems encountered by the members, borrowers on loan
repayment?
4. What are the problems encountered by the cooperative in granting loans?
5. What are the measures employed by the cooperative to lessen/reduce
delinquencies?
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Objectives of the Study
The study aimed to:
1. Determine the percentage of delinquent loan LTVTP-MPC.
2. Find out the factors affecting loan delinquencies.
3. Find out the problems encountered by the member-borrowers on loan
payment.
4. Find out the problems encountered by the cooperative in granting loans to
member-borrowers.
5. Determine the sources of funds for loan payments.
6. Find out measures employed by the cooperative to reduce loan payment
delinquencies.
7. Suggest solutions to loan payment delinquencies.
Importance of the Study
The information derived from this study will serve as a basis for other
cooperatives especially to those who are facing loan delinquencies of their member
borrowers. It will also serve as a basis for other cooperative to improve their loan
collections.
Furthermore, the study will also serve as a way for the members to recognize their
duties and responsibilities as part of the cooperative especially with regard to loan
payment. The loan study will also serve as source of information for further research on
other related studies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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REVIEW OF LITERATURE
Factors Affecting Loan Repayment
Delinquencies
Biase (1979), noted that the factors affecting loan repayment delinquency in
banks are farmers, and characteristics of borrowers which include the household size,
educational attainment and experience of borrowers.
Taganas (1979), found out in her study that the failure of farmers to pay loan on
time at the maturity was caused by diversion of loan to non-farm activities. This was due
to late release of the loan that motivated them to divert it to purposes other than the
intended purpose. This condition created in them the attitude of spending the loaned
money from the bank elsewhere. As a result, nothing was used on the intended purpose.
This further resulted to the extent of selling their house, lands or lots, just to augment the
amount needed for land preparation and other expenditures on cropping season.
Problems Encountered by Member-Borrowers
in Relation to their Loan Repayment
Ganawed (1997), noted that most of the agricultural and commercial borrowers on
the long duration of processing before loan is released, and the delayed approval of loan
application. Many requirements were accomplished before a loan was granted, there was
limitation of the loanable funds available, distance from the cooperative bank and
unawareness of the procedures in borrowing.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Delinquent Borrowers
Alzona (1980) stated that the growing magnitude and difficulty of past due loans
have continuously posed a problem had a threat to the stability of the country’s rural
banking system in recent years.
Measures Employed by the Cooperatives
Agustin (2000), found out in her study that majority of his respondents said
training decreases delinquency rate while the rest of the respondents said that training did
not bring down delinquency rate. However, those respondents who agreed that rate went
down due to trainings supported their answers with the following reasons: members of
the cooperative became aware of their duties and responsibilities as a member and
became aware of their benefits from the cooperative.
This implies that most members of both types of cooperatives have understood the
advantages of paying their loans of maturity date.
Furthermore, Foronda (1983), noted that in case of non-repayment of loans, a
grace period is given to the borrowers to pay. The borrower will set the time he will pay
the loan if he has valid reason.
Pozel (1981), stated that establishing a good working relationship with the lender
can go along way toward establishing a good line of credit. As cited by Mercer, he feels
sure many relationship have been unsuccessful as a result of an incomplete understanding
between the lender and the borrower.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Enhancing the Right Attitude to Loans
David (1990) offered some guidelines to loaners. This include: a) supervised
credit programs should be devised to fit the needs of the farmers; b) bank technicians
should guide their farmers from production to the marketing of the products. This will
also ensure the repayment of loans on maturity dates since misapplication of loans will at
least be minimized if not totally eliminated.
The Impact of Arrearages on Lenders
and Borrowers
Sacay (1985), stated that the wide spread effect of loan delinquency on lenders
and borrowers are powerful. The inability to recover loans and feed the funds back to the
credit stream endangers the viability of the credit program and the very existence of the
rural financial system.
Collection of Loans
Wadasen (2001), stated that repayment capacity of borrowers is the major basis in
the determination of the amount of loan granted. This represents the person’s ability to
use and manage credit wisely as measured by the stable and reasonable amount of profit.
It is a test of economic feasibility of the loan be repaid without difficulty, it is generally
attained if an instrument is profitable.
Problems Encountered in Collection of Loans
Cooperatives are faced with problems of delinquent loans due to circumstances
which if not properly managed will result in the tremendous financial set-back and loss of
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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confidence of member-borrowers in the cooperatives lending programs or services
(Macaranas, 1994).
Loan delinquency has always been a big problem among cooperatives and the
failure has been a big problem and to institute the necessary remedy leads to the
demoralization of both members and officers and ultimately to the failure of the
cooperative (Macaranas, 1994).
Attitudes of Members Toward Loan Payment
According to Dequit (2003), her finding shows that the respondents strongly
agreed to the attitude of paying all the obligations on time for them to be a member of
good standing and serve also as a model to then other members. Prompt payment leads
to a good bonding of a member towards the cooperative since this will help improve the
financial status of the cooperative, and for the cooperative to be able to lend money to the
rest of the members too. She said that majority of the members believed that they must
be reminded of their balances before the maturity date for them to prepare and avoid
delayed payments.
Loan Security
Many firms obtain credit on an unsecured basis either because they are new and
unproven or because bankers do not highly regard the firm’s ability to service debt. In
order to make a loan, lenders require security that will reduce their risk of loss. With
security lenders have two sources of loan payment: the cash flow ability of the firm to
service the debt and, if that source fails for some reason, the collateral value of the
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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security will be used. Most lenders will not make a loan unless the firm has sufficient
expected cash flows to make proper servicing of debt probable. To reduce their risk
further, lenders require security. Secure lending arrangements are mostly costly to
administer than unsecured loans and that the incremental cost is passed on to the
borrower in the form of fees and higher interest costs than would otherwise be the case.
Then, if unsecured credit is available somewhere at less total cost, one can be sure that a
borrower will go there to get it. Beyond a point in risk, however, all lenders in the
market will want some type of safeguard in addition to the general credit standing of the
company. This safeguard can come in the form of security or a set of protective
covenants that afford the lender the ability to take corrective steps prior to maturity if the
borrower’s financial condition should deteriorate. A lender cannot demand security and
expect to get it unless the borrower has no other alternatives. The use of security is
negotiated in keeping with conditions in the overall market for loans (Van Horne, 1989).
Requirements Submitted by the Borrowers
when they Applied for Loan
The requirement submitted by the respondents when they applied for loan are:
real estate mortgage and chattel mortgage. Another requirements to be submitted were
promissory note and fixed deposit certificate, and a checking account. There were some
reasons why the borrowers will submit requirement. These will serve as security measure
for the cooperative and also it was the traditional practices of the cooperative (Todyog,
2006).
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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METHODOLOGY
Locale and Time of the Study
The study was conducted in LTVTP-MPC in La Trinidad, Benguet on January 2007.
Figure 1 shows the map of La Trinidad where LTVTV-MPC is located.
Respondents of the Study
The data needed in this study were gathered from the officers and member-
borrowers of La Trinidad Vegetable Trading Post Multipurpose Cooperative
(LTVTPMPC).
Data Collection
Data collection was done through survey with the use of a prepared questionnaire.
Interview was also done to gather additional information and validate answers.
Data Gathered
The data gathered include: a) percentage of delinquent loans of LTVTP-MPC, b)
factors affecting loan delinquencies, c) problems encountered by members on loan
payment, d) problems encountered by cooperative in granting loan to member-borrowers,
e) sources of funds of members for loan payment, f) measures employed by the
cooperative to reduce loan payment delinquencies, and g) suggested solutions to loan
payment delinquencies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Data Analysis
Data gathered were analyzed using descriptive analysis and presented using
frequency counts, averages and percentages.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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RESULTS AND DISCUSSION
Profile of the Respondents
Table 1 shows the profile of the respondents as to sex, civil status, age and
educational attainment of the respondents.
Sex. Majority (83.33%) of the respondents were females and 16.67% are males.
This implies that majority of the members and officers of the cooperatives are females.
Since the members are into vegetable trading, result may also indicate that majority of the
female are involved in the trading business of vegetable.
Civil status. Majority (93.33%) were married, 3.33% are widower and 3.33% are
single. Result implies that most members and officers of the cooperative are married.
Age. Out of the 60 respondents, only 5% are within the age bracket of 21 to 30
years old, 35% are within 31 to 40 years old, 33.33% within 41 to 50 years old and
26.27% are within 51 to 60 year old. The study shows that the respondents are either in
their middle ages.
Educational attainment. The table shows that 50% of the respondents have gone
to high school, 30% have gone to college and 20% finished elementary. This implies that
most of the members have gone to school thus, were educated enough to understand
policies and regulations.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Table 1. Profile of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Sex
Female
50
83.33
Male
10
16.67
TOTAL
60
100
Civil Status
Single
2
3.33
Married
56
93.33
Widower
2
3.33
TOTAL
60
100
Age (years)
21 - 30
3
5
31 - 40
21
35
41 - 50
20
33.33
51 - 60
16
26.27
TOTAL
60
100
Educational Attainment
Elementary
12
20
High School
30
50
College
18
30
TOTAL
60
100
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Percentage of Loan Delinquency of La
Trinidad Vegetable Trading Post
Multi-Purpose Cooperative
Table 2 shows the percentage of delinquent loan of La Trinidad Vegetable
Trading Post Multi-purpose Cooperative (LTVTP-MPC). Loan provided by the
cooperative includes emergency loan, regular loan, special loan and agricultural loan.
The average percentage of emergency loan delinquency of LTVTP_MPC is 20%.
For regular loans, percentage loan delinquency is 46%, for agricultural loans it is 60%
and special loan delinquency is 46%.
Agricultural loan has the highest percentage of delinquency. This could be due to
the high risk in agricultural production that are beyond the control of people such as
calamities due to bad weather condition and uncontrollable pest and disease incidence,
fluctuation of price due to the supply and demand factors and other.
Table 2. Percentage of loan delinquency of LTVTP-MPC per type of loan according to
the officers and staff of LTVTP-MPC
TYPE OF LOAN
PERCENTAGE OF LOAN DELINQUENCY
Emergency loan
20
Agriculture loan
60
Regular loan
46
Special loan
46
AVERAGE
43
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Perceived Factors Affecting Loan Payment
Delinquency
Table 3 shows the perceived factors affecting loan payment delinquencies by the
respondents. All officers and staff said that the unstable price of vegetables was the most
common factors that contributed to loan delinquencies of member-borrowers. Other
factors identified by the officers were lack of monitoring and follow-up services and
short grace period. According to the cooperative officers, member-borrowers usually
split the use of the amount loaned. For instance, part of it was used for purposes such as
emergency cases and appliances while the rest was used for intended purposes. As a
result, the money used for the intended purpose was not enough. As to monitoring and
follow-up services, the cooperative officers said that they did not monitor where the
member-borrowers used their loans.
Out of the 58 member-borrower respondents, only 3.44% were not able to pay
their loans upon maturity date and most 96.55% were able to pay their loans upon
maturity date.
The member-borrowers identified low sales or profit supported their claim that
because of too much production of vegetables or high supply of vegetables as one factor
affecting loan delinquency. Others also mentioned the difficulty in disposing the
vegetables and defects or mechanical damage and bruises, thus getting a lower price of
the product and less profit.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
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Table 3. Factors affecting loan payment delinquencies
PERCEIVED FACTORS OFFICERS/STAFF DELINQUENT
NON-
MEMBERS
DELINQUENT
MEMBERS
F
%
F
%
F
%
Used loans for other 2
100
3
6.67
3
23.08
purposes
Lack of monitoring and
2
100
-
-
-
-
follow-up services
Insufficient sales or profit
1
50
30
66.67
5
38.46
Unstable price of 2
100
12
26.67
5
38.46
vegetables
TOTAL
7
100
45
100
13
100
Problems Encountered by Member-Borrowers
on Loan Payment
There were 3.44% who reported that they did not have money during collection,
94.83% mentioned that other problems such as: shortage of capital and low prices of
vegetables because of too much production and some vegetables were rejected by buyers
because of defects. One or 1.72% indicated that the loan release was delayed or late.
Delayed release of loan was due to insufficient funds that the cooperative is still waiting
for the collection especially if the amount applied is big.
Respondents said that they did not have money during collection time because
their vegetables were not yet paid and because of low price. Another reason also was that
money was not also available during the collection time because the money intended for
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
16
the payment was used for other purposes because the member –borrower were expecting
that will have money before the collection time. Respondents who indicated the problem
on late release of loan said that they used the loan for other purposes.
Table 4. Problems encountered by member-borrowers on loan payment
PROBLEMS
FREQUENCY
PERCENTAGE
No money during collection
2
3.44
Late release of loan
1
1.72
Low prices of vegetables
55
94.83
Problems Encountered by LTVTP-MPC
in Granting Loans
Table 5 shows that the problems encountered by LTVTP-MPC in granting loans.
The officers said that some of their member-borrowers avail/apply for loan but their
capital is not sufficient. The amount loaned is not yet enough. Another problem that the
officers encountered in granting loans to their member-borrowers were the improper use
of loans or using loans for other purposes not intended for the purpose applied especially
when used for non-business purposes like building or improving houses, and for luxury
items. Another problem encountered is insufficient document.
Fund Sources of Member –Borrowers for
Loan Payment
Table 6 shows the sources of funds for loan payment of member-borrowers.
Majority (93.10%) of the respondents sources of funds were from sales of their crop since
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
17
most of the member-borrowers of LTVTP-MPC are traders/farmers. Three (6.90%)
borrowed money from other people since their money is not enough to pay their loan
because business was not in peak especially if their commodities is not a necessity such
as parlor shop and “wagwagan”.
Table 5. Problems encountered by LTVTP-MPC by the officers and staff in granting
loans to member-borrowers
PROBLEMS ENCOUNTERED
FREQUENCY PERCENTAGE
Insufficient capital
2
100
Improper use of loan not intended for the purpose 2
100
applied
Insufficient documents/lack of document
1
50
Table 6. Fund sources of member-borrowers for loan payment
SOURCES OF FUNDS
FREQUENCY
PERCENTAGE
Sales or profit from business
54
93.10
Borrowed money from others
4
6.90
TOTAL
58
100
Measures Employed by LTVTP-MPC
to Reduce Loan Delinquencies
The LTVTP-MPC officer and staff and also the member-borrowers. Measures
employed by the cooperative to reduce loan delinquencies were to; conduct seminars and
meetings such as pre-membership seminar (PMES)and general assembly (GA), and
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
18
reminding to the member-borrowers to pay their balances before their due date. Officers
of LTVTP-MPC are also conducting financial counseling to the member-borrowers so
that they will have knowledge on where to use their loans. Other measures were to
ensure continuous education and training to the officers and member-borrowers, also the
officers should also be an exemplar to their members. Conducting continuous education
and training is important since it helps members to be active and from the events,
members will learn more knowledge on how to use the money loaned for the intended
purpose.
Table 7. Measures employed by LTVTP-MPC to reduce loan delinquencies
MEASURES
FREQUENCY
PERCENTAGE
Conduct seminar and meetings
20
33.33
Reminding their balances before due date
15
25
Conducting financial counseling
18
30
Ensure continuous education and training
7
11.67
Suggested Solution of LTVTP-MPC Officer
and Staff to Reduce Delinquencies
Table 8 presents the solutions suggested by the officer and staff of LTVTP-MPC
to reduce loan delinquencies.
The officers and staff of LTVTP-MPC identified that possible solutions to reduce
loan payment delinquencies are: there should be re-structuring of the loan, impose strict
collection, character of the member-borrowers. Other solutions given were sending
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
19
demand letter to the member-borrower and they should also have the capacity to pay
most especially to the member-borrower wherein they should know their obligation that
if the collector will not go they the borrower should go the coop office to pay their loans.
Table 8. Suggested solutions of LTVTP-MPC officers and staff to reduce loan
delinquencies
SOLUTIONS
FREQUENCY
PERCENTAGE
Re-structuring of the loan
2
100
Impose strict collection
2
100
Character of member-borrowers
1
50
Sending demand letter
2
100
Capacity to pay
1
50
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
20
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The study looked into the factors affecting loan delinquencies of La Trinidad
Vegetable Trading Post Multipurpose Cooperatives (LTVTP-MPC) in la Trinidad,
Benguet, in order to solve this problem and find out possible solutions. Specifically, the
study aimed to determine; a) percentage of loan delinquencies and factors affecting loan
delinquencies; b) problems encountered by member-borrowers on loan payment; c)
problems of LTVTP-MPC in granting loans; d) sources of funds for the payment of
loans; e) measures employed by LTVTP-MPC to reduce loan delinquencies; and f)
possible solutions to reduce loan delinquencies.
A prepared questionnaire was used in gathering data and interview was also
included for additional information. The data was tabulated and analyzed using
percentages, frequency counts and average.
Majority of the respondents were female, married with ages ranging from 31 to 50
years old.
Results from the average percentage of loan delinquency of LTVTP-MPC showed
that agricultural loan has the highest percentage of delinquency at 60%. This could be
due to the high risk in agricultural production that beyond the control of people.
The officers of LTVTP-MPC mentioned that the unstable price of vegetable was
the most common factor that contributed to loan delinquencies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
21
Problems encountered by the member-borrowers on loan payment were: no
money during collection, late release of loan; other problems such as; no income/money
for the day, shortage of capital and because of low price of vegetables.
Problems encountered by the cooperative officer in granting loans to member-
borrowers were; insufficient capital of member-borrowers, improper using of loans/using
loans on other purposes and insufficient document/lack of documents.
Sources of funds for loan payment were usually from sales or profit from their
business and also borrowing of money from others to pay loans.
Solutions employed by the cooperative to improve loan collections were:
restructuring of loan, character of member-borrowers. Other suggested solutions were
sending demand letter impose strict collection and they should also have the capacity to
pay.
Conclusions
Based on the results the following conclusions were made:
1. Delinquency on loan payment is higher in agricultural loans. Cooperative
officers attributed this to diversion of member-borrowers of their loan to other
purposes.
2. Member-borrowers borrowed funds from other people when their sales/profit
were not enough to pay their loans.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
22
Recommendations
The member-borrowers were granted loans from their cooperative to help them
improve their economic well-being. So as for them to be able to pay their loans, the
following recommendations were made.
For member-borrowers:
1. Member-borrowers should have a plan where to use their loans before
borrowing and that the amount should be used for that purpose.
2. Borrowers should practice the habit of setting aside or saving money for
loan payments.
For the Cooperative Officers
1. Continuous counseling should be provided to member-borrowers.
Counseling should be done before and after granting loans and loan
monitoring should also be done to avoid the use of loans for other purpose
intended for.
2. The officers should promptly and regularly remind the loan payments their
member-borrowers before their due date. Borrowers who fail to pay after the
grace period should be followed –up or requested to report to the cooperative.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
23
LITERATURE CITED
AGUSTIN, L.M. 2000. Perceived effects of Ttaining on the performance of
Cooperatives in Kibungan, Benguet. BS Thesis. Benguet State University, La
Trinidad, Benguet. P. 30.
ALSONA, A.A. 1980. Countryside Banking. Vol. 7. P. 24.
BIASE, L.A. 1979. Repayment of deficiencies in agricultural loans in Buguias,
Benguet. BS Thesis. Benguet State University, La Trinidad, Benguet. P. 24.
DAVID, K. 1990. Perception and attitudes of Baguio City and Benguet Province
towards the Cordillera Autonomy: A Development Perspective. MS. Thesis,
Benguet State University, La Trinidad, Benguet. Pp. 23-24.
DEQUIT, F.J. 2003. Attitudes of members of selected cooperatives in La Trinidad,
Benguet towards borrowing and repaying of Loan. BS. Thesis. Benguet State
University, La Trinidad, Benguet. P. 18.
FORONDA, C. 1983. Comparative economic analysis of loans granted by three
Rural Banks in Ilocos Sur. BS. Thesis. Benguet State University, La Trinidad,
Benguet. P.40.
GANAWED, D. 1997. Credit and repayment performance of loan borrowers of
Cooperative Bank of Benguet. BS Thesis. Benguet State University, La Trinidad,
Benguet. Pp. 37 –39.
MACARANAS, M.J. 1994. Manual for Training Cooperative Management Staff.
International Labour Organization Cooperative Entrepreneurs for Rural
Development. Quezon City, Philippines. Pp. 1,18-19.
POZEL, M. 1981. Farmers Cooperatives. United States of America Agriculture
Cooperative Service. P.5.
SACAY, O.J. 1985. Small Farmers Credit Dilemma. National Publishing Corporation,
Manila, Philippines. Pp. 2, 39, 41.
TAGANAS, P. 1979. Repayment deficiencies of agricultural loans in Bontoc,
Mountain Province. BS Thesis. Benguet State University, La Trinidad, Benguet.
P. 43.
TODYOG, K.G. 2006. Credit operation of La Trinidad vegetable trading post
Multipurpose Cooperative. BS. Thesis. Benguet State University, La Trinidad,
Benguet. Pp. 14-15.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
24
VAN HORNE, J. 1989. Financial Management and Policy. 8th ed. Prentice Hall,
Engelwood Cliffs, New Jersey. Pp. 489 –507.
WADASEN, R. P. 2001. Financial Management Practice of the St. Jude Community
Multipurpose Cooperative in Buguias, Benguet. An Assessment. MS Thesis,
Benguet State University, La Trinidad, Benguet. Pp. 29.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
25
Appendix A. Letter to the Respondent
BENGUET STATE UNIVERSITY
COLLEGE OF AGRICULTURE
Department of Agricultural Economics and Agribusiness Management
La Trinidad, Benguet
December 2006
Sir/Madam;
I am a fourth year student of Benguet State University, Taking up Bachelor of Science in
Agribusiness majoring in cooperative management, I am currently conducting my
undergraduate research titled, “Factors Affecting Loan Payment Delinquency of La
Trinidad Vegetable Trading Post Multi-purpose Cooperative in La Trinidad, Benguet”.
In this connection, may I request your support, cooperation, and honesty and sincerity in
providing information needed in this research work.
Thank you very much and God Bless.
Respectfully yours,
DOMINGA G. KIWA-EN
Noted:
LUKE E. CUANGEY
Adviser
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
26
Appendix B
SURVEY QUESTIONNAIRE
(For Cooperative Officers)
I. GEOGRAPHIC INFORMATION
1. Name of Cooperative_____________________________________________
2. Address of Cooperative ___________________________________________
II. GENERAL INFORMATION ON THE RESPONDENTS
3. Name _________________________________________________________
4. Age _______ 5. Sex _____Male ______Female 6. Civil status ___________
7. Highest educational attainment
__________ Elementary __________High School
__________College, please specify the course ________________________
8. Position in the cooperative
___________Officer, specify ______________________________________
___________Manager, specify _____________________________________
III. PROFILE OF LOAN DELINQUENCY
What is the average percentage loan delinquency in your cooperative for the
following types of loans?
a. Emergency loan ________________________________________________
b. Agricultural ____________________________________________________
c. Others specify __________________________________________________
IV. FACTORS AFFECTING LOAN DELINQUENCY
What do you think are the factors affecting loan delinquency? Please check
___________Members characteristics which include household size, educational
attainment etc.
___________Wrong timing of collection
___________Policy of the cooperative
___________Lack of monitoring and follow-up services
___________Short grace period
___________ others, specify __________________________________________
V. MEASURES EMPLOYED BY COOPERATIVE TO REDUCE LOAN
DELINQUENCY
1. Methods of collecting payments
_________ full payment
_________installment
_________others, specify ____________________________________________
2. If Installment, what are the terms of payment employed?
_______weekly
________quarterly
Others, specify___________
_______monthly
________annually
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
27
Appendix C
SURVEY QUESTIONNAIRE
(For Member-Borrowers)
I. GEOGRAPHIC INFORMATION
1. Name of cooperative _____________________________________________
2. Address of Cooperative ___________________________________________
II. GENERAL INFORMATION ON THE RESPONDENTS
3. Name _________________________________________________________
4. Age _______ 5. Sex _____Male ______Female 6. Civil status ___________
7. Highest educational attainment
__________ Elementary __________High School
__________College, please specify the course ________________________
8. Position in the cooperative
___________Officer, specify ______________________________________
___________Manager, specify _____________________________________
III. REPAYMENT OF LOAN
1. What was the latest loan you availed from the cooperative?
__________________________________________________________
2. What was the purpose of the loan? _______________________________
3. What type of loan did you avail?
Type of loan
Amount
Term
Emergency loan
________________
________________
Agricultural loan
________________
________________
Others, specify
_________________
_________________
_________________
_________________
_________________
_________________
4. How did you pay your loan?
________________through collector from cooperative
________________personally went to the cooperative
________________ sent payment through representative
________________ others, specify _____________________________________
5. Methods of payment (please check)
_________________ full payment
_________________ installment
_________________ others, specify ____________________________________
6. If installment, what were the terms of payment?
____________ Weekly ________ quarterly
________ others, specify
____________ monthly ________ annually
7. Describe the maturity period of your loan?
_________short ________long
________just enough
_________others, specify ____________________________________________
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
28
V. MEASURES EMPLOYED BY COOPERATIVE TO REDUCE LOAN
DELINQUENCY
6. Methods of collecting payments
_________ full payment
_________installment
_________others, specify ____________________________________________
7. If Installment, what are the terms of payment employed?
_______weekly
________quarterly
Others, specify___________
_______monthly
________annually
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
KIWA-EN, DOMINGA G. APRIL 2007. Factors Affecting Loan Payment
Delinqunecy of La Trinidad Vegetable Trading Post Multi-Purpose Cooperative, in La
Trinidad, Benguet. Benguet State University, La Trinidad, Benguet.
Adviser: Luke E. Cuangey, BSc
ABSTRACT
This study looked into the factors affecting loan delinquencies of La Trinidad
Vegetable Trading Post Multipurpose Cooperative (LTVTP-MPC) in La Trinidad,
Benguet in order to solve this problem and find out possible solutions. Specifically, the
study aimed to determine; a) percentage of loan delinquencies and factors affecting loan
delinquencies; b) problems encountered by member-borrowers on loan payment; c)
problems of LTVTP-MPC in granting loans; d) sources of funds for the payment of
loans; e) measures employed by LTVTP-MPC to reduce loan delinquencies; and f)
possible solutions to reduce loan delinquencies. This was conducted at La Trinidad
Vegetable Trading Post Multipurpose Cooperative with 2 officers and staff and 58
member- borrowers of the cooperative as respondents.
Majority of the respondents were female, married with ages ranging from 31 to 50
years old.
Results from the average percentage of loan delinquency of LTVTP-MPC showed
that agricultural loan has the highest percentage of delinquency at 60%. This could be
due to the high risk in agricultural production that is beyond control of people.
Problems encountered by member-borrowers on loan payment were: no money
during collection, late release of loan; other problems such as; no income/money for the
day, shortage of capital and because of low price of vegetables. On the other hand, the
problems encountered by the cooperative officers in granting loans to member-borrowers
were: insufficient capital of member-borrowers, improper using of loans/using loans on
other purposes and insufficient documents/lack of documents.
The sources of funds for loan payment were usually from sales or profit from their
business and also borrowing of money from others to pay loans.
Solutions employed by the cooperative to improve loan collections were: re-
structuring of loan, character of member-borrowers. Other suggested solutions were
sending demand letter, impose strict collection and they should have the capacity to pay.
ii
TABLE OF CONTENTS
Page
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Abstract ,. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION
Historical Background of LTVTP-MPC . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
REVIEW OF LITERATURE
Factors Affecting Loan Repayment
Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Problems Encountered by Member-Borrowers
in Relation to their Loan Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Delinquent Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Enhancing the Right Attitudes to Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
6
.
The Impact of Arrearages on Lenders and
Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Collection of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Problems Encountered in Collection of Loans . . . . . . . . . . . . . . . . . . . . .
6
Attitudes of Members Towards Loan Payments . . . . . . . . . . . . . . . . . . .
7
iii
Attitudes of Members Toward Loan Payments . . . . . . . . . . . . . . . . . . . . .
7
Loan Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Requirements Submitted by the Borrowers
when they Applied for Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
METHODOLOGY
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Respondents of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
RESULTS AND DISCUSSION
Profile of the Respondents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Percentage of Loan Delinquency of La
Trinidad Vegetable Trading Post
Multi-purpose Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
.
Perceived Factors Affecting Loan
Payment Delinquency . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Problems Encountered by Member-
Borrowers on Loan Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Problems Encountered by LTVTP-MPC
in Granting Loans . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . . . . . . . . . . . .
16
Fund Sources of Member-Borrowers for
Loan Payment . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .
16
Measures Employed by LTVTP-MPC to
Reduce Loan Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
Suggested Solutions of LTVTP-MPC
Officer and Staff to Reduce
Delinquencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
iv
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Conclusions . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .
21
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
23
APPENDICES
Letter to Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Survey Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
v
1
INTRODUCTION
Historical Background of LTVTP-MPC
The La Trinidad Vegetable Trading Post Multipurpose Cooperative (LTVTP-
MPC was registered on September 9, 1992 with the Cooperative Development Authority
(CDA) under Philippine Laws as La Trinidad Vegetable Trading Post Allied Services
Cooperative (LTVTPASC) and later amended as its named today, upon insistence of the
CDA in accordance with their New Cooperative Guidelines.
Records show that the cooperative started its operation with initial build-up share
capital of thirteen thousand five hundred pesos (Php 13,500.00) only, evenly contributed
by the 15 members incorporator at Php 900.00 each.
The incorporators are: Atty Narciso U. Bolislis, Rose Alangdeo, Murphy Paayas,
Josephine Isabelo, Adolfo Pendong, Bernadette Santos, Mary Badilla, Ignacio Malinias,
Juana Bay-an, Ofelia Igualdo, Jason Erico, Simplicio Pocte, Cresencio Francisco, Emilia
Salipan, and Saturnino Gawec. They were then the Board of Trustees and Officers of the
La Trinidad Vegetables Trading Post Association, Inc. (booth holders). The officers of
the Bagsakan Association joined the cooperative by virtue of the resolution of joint
undertaking initiated by the CDA.
In the course of time, everybody joined the cooperative; being a resident of La
Trinidad, private and government employees. Businessmen and businesswomen traders
and producers engaged in vegetable industry likewise joined the cooperative leading to a
total of 897 members as of February 28, 2003. Together, they contributed a paid-up
share capital of eleven million two hundred forty thousand thirty six pesos and eighty
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
2
centavos (Php. 11,240,036.80) with total assets of thirty six million eighty three thousand
two hundred twenty-six pesos and sixty nine centavos (Php. 36,083,226.69), which
includes a four (4) storeys building located at Wangal, la Trinidad, Benguet.
The foregoing remarkable growth of the cooperative in ten (10) years, speaks well
of the loyalty of the management staff, the strong-well, focus-determination and
commitment of the Board of Directors and Officers and the committees that had been
serving the cooperative as volunteers in the beginning years. The continued working
interest and dedication to the cooperative deserves merit for it had been the basis in the
positioning or staff-placement in line with the cooperative internal control systems.
Statement of the Problem
This study attempted to look into the factors affecting loan delinquencies in order
to explain the problem and look into the possible solutions. Specifically, this study aimed
to answer the following questions:
1. What is the percentage of delinquent loan of LTVTP-MPC?
2. What are the factors affecting loan delinquencies?
3. What are the problems encountered by the members, borrowers on loan
repayment?
4. What are the problems encountered by the cooperative in granting loans?
5. What are the measures employed by the cooperative to lessen/reduce
delinquencies?
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
3
Objectives of the Study
The study aimed to:
1. Determine the percentage of delinquent loan LTVTP-MPC.
2. Find out the factors affecting loan delinquencies.
3. Find out the problems encountered by the member-borrowers on loan
payment.
4. Find out the problems encountered by the cooperative in granting loans to
member-borrowers.
5. Determine the sources of funds for loan payments.
6. Find out measures employed by the cooperative to reduce loan payment
delinquencies.
7. Suggest solutions to loan payment delinquencies.
Importance of the Study
The information derived from this study will serve as a basis for other
cooperatives especially to those who are facing loan delinquencies of their member
borrowers. It will also serve as a basis for other cooperative to improve their loan
collections.
Furthermore, the study will also serve as a way for the members to recognize their
duties and responsibilities as part of the cooperative especially with regard to loan
payment. The loan study will also serve as source of information for further research on
other related studies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
4
REVIEW OF LITERATURE
Factors Affecting Loan Repayment
Delinquencies
Biase (1979), noted that the factors affecting loan repayment delinquency in
banks are farmers, and characteristics of borrowers which include the household size,
educational attainment and experience of borrowers.
Taganas (1979), found out in her study that the failure of farmers to pay loan on
time at the maturity was caused by diversion of loan to non-farm activities. This was due
to late release of the loan that motivated them to divert it to purposes other than the
intended purpose. This condition created in them the attitude of spending the loaned
money from the bank elsewhere. As a result, nothing was used on the intended purpose.
This further resulted to the extent of selling their house, lands or lots, just to augment the
amount needed for land preparation and other expenditures on cropping season.
Problems Encountered by Member-Borrowers
in Relation to their Loan Repayment
Ganawed (1997), noted that most of the agricultural and commercial borrowers on
the long duration of processing before loan is released, and the delayed approval of loan
application. Many requirements were accomplished before a loan was granted, there was
limitation of the loanable funds available, distance from the cooperative bank and
unawareness of the procedures in borrowing.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
5
Delinquent Borrowers
Alzona (1980) stated that the growing magnitude and difficulty of past due loans
have continuously posed a problem had a threat to the stability of the country’s rural
banking system in recent years.
Measures Employed by the Cooperatives
Agustin (2000), found out in her study that majority of his respondents said
training decreases delinquency rate while the rest of the respondents said that training did
not bring down delinquency rate. However, those respondents who agreed that rate went
down due to trainings supported their answers with the following reasons: members of
the cooperative became aware of their duties and responsibilities as a member and
became aware of their benefits from the cooperative.
This implies that most members of both types of cooperatives have understood the
advantages of paying their loans of maturity date.
Furthermore, Foronda (1983), noted that in case of non-repayment of loans, a
grace period is given to the borrowers to pay. The borrower will set the time he will pay
the loan if he has valid reason.
Pozel (1981), stated that establishing a good working relationship with the lender
can go along way toward establishing a good line of credit. As cited by Mercer, he feels
sure many relationship have been unsuccessful as a result of an incomplete understanding
between the lender and the borrower.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
6
Enhancing the Right Attitude to Loans
David (1990) offered some guidelines to loaners. This include: a) supervised
credit programs should be devised to fit the needs of the farmers; b) bank technicians
should guide their farmers from production to the marketing of the products. This will
also ensure the repayment of loans on maturity dates since misapplication of loans will at
least be minimized if not totally eliminated.
The Impact of Arrearages on Lenders
and Borrowers
Sacay (1985), stated that the wide spread effect of loan delinquency on lenders
and borrowers are powerful. The inability to recover loans and feed the funds back to the
credit stream endangers the viability of the credit program and the very existence of the
rural financial system.
Collection of Loans
Wadasen (2001), stated that repayment capacity of borrowers is the major basis in
the determination of the amount of loan granted. This represents the person’s ability to
use and manage credit wisely as measured by the stable and reasonable amount of profit.
It is a test of economic feasibility of the loan be repaid without difficulty, it is generally
attained if an instrument is profitable.
Problems Encountered in Collection of Loans
Cooperatives are faced with problems of delinquent loans due to circumstances
which if not properly managed will result in the tremendous financial set-back and loss of
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
7
confidence of member-borrowers in the cooperatives lending programs or services
(Macaranas, 1994).
Loan delinquency has always been a big problem among cooperatives and the
failure has been a big problem and to institute the necessary remedy leads to the
demoralization of both members and officers and ultimately to the failure of the
cooperative (Macaranas, 1994).
Attitudes of Members Toward Loan Payment
According to Dequit (2003), her finding shows that the respondents strongly
agreed to the attitude of paying all the obligations on time for them to be a member of
good standing and serve also as a model to then other members. Prompt payment leads
to a good bonding of a member towards the cooperative since this will help improve the
financial status of the cooperative, and for the cooperative to be able to lend money to the
rest of the members too. She said that majority of the members believed that they must
be reminded of their balances before the maturity date for them to prepare and avoid
delayed payments.
Loan Security
Many firms obtain credit on an unsecured basis either because they are new and
unproven or because bankers do not highly regard the firm’s ability to service debt. In
order to make a loan, lenders require security that will reduce their risk of loss. With
security lenders have two sources of loan payment: the cash flow ability of the firm to
service the debt and, if that source fails for some reason, the collateral value of the
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
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8
security will be used. Most lenders will not make a loan unless the firm has sufficient
expected cash flows to make proper servicing of debt probable. To reduce their risk
further, lenders require security. Secure lending arrangements are mostly costly to
administer than unsecured loans and that the incremental cost is passed on to the
borrower in the form of fees and higher interest costs than would otherwise be the case.
Then, if unsecured credit is available somewhere at less total cost, one can be sure that a
borrower will go there to get it. Beyond a point in risk, however, all lenders in the
market will want some type of safeguard in addition to the general credit standing of the
company. This safeguard can come in the form of security or a set of protective
covenants that afford the lender the ability to take corrective steps prior to maturity if the
borrower’s financial condition should deteriorate. A lender cannot demand security and
expect to get it unless the borrower has no other alternatives. The use of security is
negotiated in keeping with conditions in the overall market for loans (Van Horne, 1989).
Requirements Submitted by the Borrowers
when they Applied for Loan
The requirement submitted by the respondents when they applied for loan are:
real estate mortgage and chattel mortgage. Another requirements to be submitted were
promissory note and fixed deposit certificate, and a checking account. There were some
reasons why the borrowers will submit requirement. These will serve as security measure
for the cooperative and also it was the traditional practices of the cooperative (Todyog,
2006).
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
9
METHODOLOGY
Locale and Time of the Study
The study was conducted in LTVTP-MPC in La Trinidad, Benguet on January 2007.
Figure 1 shows the map of La Trinidad where LTVTV-MPC is located.
Respondents of the Study
The data needed in this study were gathered from the officers and member-
borrowers of La Trinidad Vegetable Trading Post Multipurpose Cooperative
(LTVTPMPC).
Data Collection
Data collection was done through survey with the use of a prepared questionnaire.
Interview was also done to gather additional information and validate answers.
Data Gathered
The data gathered include: a) percentage of delinquent loans of LTVTP-MPC, b)
factors affecting loan delinquencies, c) problems encountered by members on loan
payment, d) problems encountered by cooperative in granting loan to member-borrowers,
e) sources of funds of members for loan payment, f) measures employed by the
cooperative to reduce loan payment delinquencies, and g) suggested solutions to loan
payment delinquencies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
10
Data Analysis
Data gathered were analyzed using descriptive analysis and presented using
frequency counts, averages and percentages.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
11
RESULTS AND DISCUSSION
Profile of the Respondents
Table 1 shows the profile of the respondents as to sex, civil status, age and
educational attainment of the respondents.
Sex. Majority (83.33%) of the respondents were females and 16.67% are males.
This implies that majority of the members and officers of the cooperatives are females.
Since the members are into vegetable trading, result may also indicate that majority of the
female are involved in the trading business of vegetable.
Civil status. Majority (93.33%) were married, 3.33% are widower and 3.33% are
single. Result implies that most members and officers of the cooperative are married.
Age. Out of the 60 respondents, only 5% are within the age bracket of 21 to 30
years old, 35% are within 31 to 40 years old, 33.33% within 41 to 50 years old and
26.27% are within 51 to 60 year old. The study shows that the respondents are either in
their middle ages.
Educational attainment. The table shows that 50% of the respondents have gone
to high school, 30% have gone to college and 20% finished elementary. This implies that
most of the members have gone to school thus, were educated enough to understand
policies and regulations.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
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12
Table 1. Profile of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Sex
Female
50
83.33
Male
10
16.67
TOTAL
60
100
Civil Status
Single
2
3.33
Married
56
93.33
Widower
2
3.33
TOTAL
60
100
Age (years)
21 - 30
3
5
31 - 40
21
35
41 - 50
20
33.33
51 - 60
16
26.27
TOTAL
60
100
Educational Attainment
Elementary
12
20
High School
30
50
College
18
30
TOTAL
60
100
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
13
Percentage of Loan Delinquency of La
Trinidad Vegetable Trading Post
Multi-Purpose Cooperative
Table 2 shows the percentage of delinquent loan of La Trinidad Vegetable
Trading Post Multi-purpose Cooperative (LTVTP-MPC). Loan provided by the
cooperative includes emergency loan, regular loan, special loan and agricultural loan.
The average percentage of emergency loan delinquency of LTVTP_MPC is 20%.
For regular loans, percentage loan delinquency is 46%, for agricultural loans it is 60%
and special loan delinquency is 46%.
Agricultural loan has the highest percentage of delinquency. This could be due to
the high risk in agricultural production that are beyond the control of people such as
calamities due to bad weather condition and uncontrollable pest and disease incidence,
fluctuation of price due to the supply and demand factors and other.
Table 2. Percentage of loan delinquency of LTVTP-MPC per type of loan according to
the officers and staff of LTVTP-MPC
TYPE OF LOAN
PERCENTAGE OF LOAN DELINQUENCY
Emergency loan
20
Agriculture loan
60
Regular loan
46
Special loan
46
AVERAGE
43
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
14
Perceived Factors Affecting Loan Payment
Delinquency
Table 3 shows the perceived factors affecting loan payment delinquencies by the
respondents. All officers and staff said that the unstable price of vegetables was the most
common factors that contributed to loan delinquencies of member-borrowers. Other
factors identified by the officers were lack of monitoring and follow-up services and
short grace period. According to the cooperative officers, member-borrowers usually
split the use of the amount loaned. For instance, part of it was used for purposes such as
emergency cases and appliances while the rest was used for intended purposes. As a
result, the money used for the intended purpose was not enough. As to monitoring and
follow-up services, the cooperative officers said that they did not monitor where the
member-borrowers used their loans.
Out of the 58 member-borrower respondents, only 3.44% were not able to pay
their loans upon maturity date and most 96.55% were able to pay their loans upon
maturity date.
The member-borrowers identified low sales or profit supported their claim that
because of too much production of vegetables or high supply of vegetables as one factor
affecting loan delinquency. Others also mentioned the difficulty in disposing the
vegetables and defects or mechanical damage and bruises, thus getting a lower price of
the product and less profit.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
15
Table 3. Factors affecting loan payment delinquencies
PERCEIVED FACTORS OFFICERS/STAFF DELINQUENT
NON-
MEMBERS
DELINQUENT
MEMBERS
F
%
F
%
F
%
Used loans for other 2
100
3
6.67
3
23.08
purposes
Lack of monitoring and
2
100
-
-
-
-
follow-up services
Insufficient sales or profit
1
50
30
66.67
5
38.46
Unstable price of 2
100
12
26.67
5
38.46
vegetables
TOTAL
7
100
45
100
13
100
Problems Encountered by Member-Borrowers
on Loan Payment
There were 3.44% who reported that they did not have money during collection,
94.83% mentioned that other problems such as: shortage of capital and low prices of
vegetables because of too much production and some vegetables were rejected by buyers
because of defects. One or 1.72% indicated that the loan release was delayed or late.
Delayed release of loan was due to insufficient funds that the cooperative is still waiting
for the collection especially if the amount applied is big.
Respondents said that they did not have money during collection time because
their vegetables were not yet paid and because of low price. Another reason also was that
money was not also available during the collection time because the money intended for
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
16
the payment was used for other purposes because the member –borrower were expecting
that will have money before the collection time. Respondents who indicated the problem
on late release of loan said that they used the loan for other purposes.
Table 4. Problems encountered by member-borrowers on loan payment
PROBLEMS
FREQUENCY
PERCENTAGE
No money during collection
2
3.44
Late release of loan
1
1.72
Low prices of vegetables
55
94.83
Problems Encountered by LTVTP-MPC
in Granting Loans
Table 5 shows that the problems encountered by LTVTP-MPC in granting loans.
The officers said that some of their member-borrowers avail/apply for loan but their
capital is not sufficient. The amount loaned is not yet enough. Another problem that the
officers encountered in granting loans to their member-borrowers were the improper use
of loans or using loans for other purposes not intended for the purpose applied especially
when used for non-business purposes like building or improving houses, and for luxury
items. Another problem encountered is insufficient document.
Fund Sources of Member –Borrowers for
Loan Payment
Table 6 shows the sources of funds for loan payment of member-borrowers.
Majority (93.10%) of the respondents sources of funds were from sales of their crop since
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
17
most of the member-borrowers of LTVTP-MPC are traders/farmers. Three (6.90%)
borrowed money from other people since their money is not enough to pay their loan
because business was not in peak especially if their commodities is not a necessity such
as parlor shop and “wagwagan”.
Table 5. Problems encountered by LTVTP-MPC by the officers and staff in granting
loans to member-borrowers
PROBLEMS ENCOUNTERED
FREQUENCY PERCENTAGE
Insufficient capital
2
100
Improper use of loan not intended for the purpose 2
100
applied
Insufficient documents/lack of document
1
50
Table 6. Fund sources of member-borrowers for loan payment
SOURCES OF FUNDS
FREQUENCY
PERCENTAGE
Sales or profit from business
54
93.10
Borrowed money from others
4
6.90
TOTAL
58
100
Measures Employed by LTVTP-MPC
to Reduce Loan Delinquencies
The LTVTP-MPC officer and staff and also the member-borrowers. Measures
employed by the cooperative to reduce loan delinquencies were to; conduct seminars and
meetings such as pre-membership seminar (PMES)and general assembly (GA), and
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
18
reminding to the member-borrowers to pay their balances before their due date. Officers
of LTVTP-MPC are also conducting financial counseling to the member-borrowers so
that they will have knowledge on where to use their loans. Other measures were to
ensure continuous education and training to the officers and member-borrowers, also the
officers should also be an exemplar to their members. Conducting continuous education
and training is important since it helps members to be active and from the events,
members will learn more knowledge on how to use the money loaned for the intended
purpose.
Table 7. Measures employed by LTVTP-MPC to reduce loan delinquencies
MEASURES
FREQUENCY
PERCENTAGE
Conduct seminar and meetings
20
33.33
Reminding their balances before due date
15
25
Conducting financial counseling
18
30
Ensure continuous education and training
7
11.67
Suggested Solution of LTVTP-MPC Officer
and Staff to Reduce Delinquencies
Table 8 presents the solutions suggested by the officer and staff of LTVTP-MPC
to reduce loan delinquencies.
The officers and staff of LTVTP-MPC identified that possible solutions to reduce
loan payment delinquencies are: there should be re-structuring of the loan, impose strict
collection, character of the member-borrowers. Other solutions given were sending
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
19
demand letter to the member-borrower and they should also have the capacity to pay
most especially to the member-borrower wherein they should know their obligation that
if the collector will not go they the borrower should go the coop office to pay their loans.
Table 8. Suggested solutions of LTVTP-MPC officers and staff to reduce loan
delinquencies
SOLUTIONS
FREQUENCY
PERCENTAGE
Re-structuring of the loan
2
100
Impose strict collection
2
100
Character of member-borrowers
1
50
Sending demand letter
2
100
Capacity to pay
1
50
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
20
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The study looked into the factors affecting loan delinquencies of La Trinidad
Vegetable Trading Post Multipurpose Cooperatives (LTVTP-MPC) in la Trinidad,
Benguet, in order to solve this problem and find out possible solutions. Specifically, the
study aimed to determine; a) percentage of loan delinquencies and factors affecting loan
delinquencies; b) problems encountered by member-borrowers on loan payment; c)
problems of LTVTP-MPC in granting loans; d) sources of funds for the payment of
loans; e) measures employed by LTVTP-MPC to reduce loan delinquencies; and f)
possible solutions to reduce loan delinquencies.
A prepared questionnaire was used in gathering data and interview was also
included for additional information. The data was tabulated and analyzed using
percentages, frequency counts and average.
Majority of the respondents were female, married with ages ranging from 31 to 50
years old.
Results from the average percentage of loan delinquency of LTVTP-MPC showed
that agricultural loan has the highest percentage of delinquency at 60%. This could be
due to the high risk in agricultural production that beyond the control of people.
The officers of LTVTP-MPC mentioned that the unstable price of vegetable was
the most common factor that contributed to loan delinquencies.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
21
Problems encountered by the member-borrowers on loan payment were: no
money during collection, late release of loan; other problems such as; no income/money
for the day, shortage of capital and because of low price of vegetables.
Problems encountered by the cooperative officer in granting loans to member-
borrowers were; insufficient capital of member-borrowers, improper using of loans/using
loans on other purposes and insufficient document/lack of documents.
Sources of funds for loan payment were usually from sales or profit from their
business and also borrowing of money from others to pay loans.
Solutions employed by the cooperative to improve loan collections were:
restructuring of loan, character of member-borrowers. Other suggested solutions were
sending demand letter impose strict collection and they should also have the capacity to
pay.
Conclusions
Based on the results the following conclusions were made:
1. Delinquency on loan payment is higher in agricultural loans. Cooperative
officers attributed this to diversion of member-borrowers of their loan to other
purposes.
2. Member-borrowers borrowed funds from other people when their sales/profit
were not enough to pay their loans.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
22
Recommendations
The member-borrowers were granted loans from their cooperative to help them
improve their economic well-being. So as for them to be able to pay their loans, the
following recommendations were made.
For member-borrowers:
1. Member-borrowers should have a plan where to use their loans before
borrowing and that the amount should be used for that purpose.
2. Borrowers should practice the habit of setting aside or saving money for
loan payments.
For the Cooperative Officers
1. Continuous counseling should be provided to member-borrowers.
Counseling should be done before and after granting loans and loan
monitoring should also be done to avoid the use of loans for other purpose
intended for.
2. The officers should promptly and regularly remind the loan payments their
member-borrowers before their due date. Borrowers who fail to pay after the
grace period should be followed –up or requested to report to the cooperative.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
23
LITERATURE CITED
AGUSTIN, L.M. 2000. Perceived effects of Ttaining on the performance of
Cooperatives in Kibungan, Benguet. BS Thesis. Benguet State University, La
Trinidad, Benguet. P. 30.
ALSONA, A.A. 1980. Countryside Banking. Vol. 7. P. 24.
BIASE, L.A. 1979. Repayment of deficiencies in agricultural loans in Buguias,
Benguet. BS Thesis. Benguet State University, La Trinidad, Benguet. P. 24.
DAVID, K. 1990. Perception and attitudes of Baguio City and Benguet Province
towards the Cordillera Autonomy: A Development Perspective. MS. Thesis,
Benguet State University, La Trinidad, Benguet. Pp. 23-24.
DEQUIT, F.J. 2003. Attitudes of members of selected cooperatives in La Trinidad,
Benguet towards borrowing and repaying of Loan. BS. Thesis. Benguet State
University, La Trinidad, Benguet. P. 18.
FORONDA, C. 1983. Comparative economic analysis of loans granted by three
Rural Banks in Ilocos Sur. BS. Thesis. Benguet State University, La Trinidad,
Benguet. P.40.
GANAWED, D. 1997. Credit and repayment performance of loan borrowers of
Cooperative Bank of Benguet. BS Thesis. Benguet State University, La Trinidad,
Benguet. Pp. 37 –39.
MACARANAS, M.J. 1994. Manual for Training Cooperative Management Staff.
International Labour Organization Cooperative Entrepreneurs for Rural
Development. Quezon City, Philippines. Pp. 1,18-19.
POZEL, M. 1981. Farmers Cooperatives. United States of America Agriculture
Cooperative Service. P.5.
SACAY, O.J. 1985. Small Farmers Credit Dilemma. National Publishing Corporation,
Manila, Philippines. Pp. 2, 39, 41.
TAGANAS, P. 1979. Repayment deficiencies of agricultural loans in Bontoc,
Mountain Province. BS Thesis. Benguet State University, La Trinidad, Benguet.
P. 43.
TODYOG, K.G. 2006. Credit operation of La Trinidad vegetable trading post
Multipurpose Cooperative. BS. Thesis. Benguet State University, La Trinidad,
Benguet. Pp. 14-15.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
24
VAN HORNE, J. 1989. Financial Management and Policy. 8th ed. Prentice Hall,
Engelwood Cliffs, New Jersey. Pp. 489 –507.
WADASEN, R. P. 2001. Financial Management Practice of the St. Jude Community
Multipurpose Cooperative in Buguias, Benguet. An Assessment. MS Thesis,
Benguet State University, La Trinidad, Benguet. Pp. 29.
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
25
Appendix A. Letter to the Respondent
BENGUET STATE UNIVERSITY
COLLEGE OF AGRICULTURE
Department of Agricultural Economics and Agribusiness Management
La Trinidad, Benguet
December 2006
Sir/Madam;
I am a fourth year student of Benguet State University, Taking up Bachelor of Science in
Agribusiness majoring in cooperative management, I am currently conducting my
undergraduate research titled, “Factors Affecting Loan Payment Delinquency of La
Trinidad Vegetable Trading Post Multi-purpose Cooperative in La Trinidad, Benguet”.
In this connection, may I request your support, cooperation, and honesty and sincerity in
providing information needed in this research work.
Thank you very much and God Bless.
Respectfully yours,
DOMINGA G. KIWA-EN
Noted:
LUKE E. CUANGEY
Adviser
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
26
Appendix B
SURVEY QUESTIONNAIRE
(For Cooperative Officers)
I. GEOGRAPHIC INFORMATION
1. Name of Cooperative_____________________________________________
2. Address of Cooperative ___________________________________________
II. GENERAL INFORMATION ON THE RESPONDENTS
3. Name _________________________________________________________
4. Age _______ 5. Sex _____Male ______Female 6. Civil status ___________
7. Highest educational attainment
__________ Elementary __________High School
__________College, please specify the course ________________________
8. Position in the cooperative
___________Officer, specify ______________________________________
___________Manager, specify _____________________________________
III. PROFILE OF LOAN DELINQUENCY
What is the average percentage loan delinquency in your cooperative for the
following types of loans?
a. Emergency loan ________________________________________________
b. Agricultural ____________________________________________________
c. Others specify __________________________________________________
IV. FACTORS AFFECTING LOAN DELINQUENCY
What do you think are the factors affecting loan delinquency? Please check
___________Members characteristics which include household size, educational
attainment etc.
___________Wrong timing of collection
___________Policy of the cooperative
___________Lack of monitoring and follow-up services
___________Short grace period
___________ others, specify __________________________________________
V. MEASURES EMPLOYED BY COOPERATIVE TO REDUCE LOAN
DELINQUENCY
1. Methods of collecting payments
_________ full payment
_________installment
_________others, specify ____________________________________________
2. If Installment, what are the terms of payment employed?
_______weekly
________quarterly
Others, specify___________
_______monthly
________annually
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
27
Appendix C
SURVEY QUESTIONNAIRE
(For Member-Borrowers)
I. GEOGRAPHIC INFORMATION
1. Name of cooperative _____________________________________________
2. Address of Cooperative ___________________________________________
II. GENERAL INFORMATION ON THE RESPONDENTS
3. Name _________________________________________________________
4. Age _______ 5. Sex _____Male ______Female 6. Civil status ___________
7. Highest educational attainment
__________ Elementary __________High School
__________College, please specify the course ________________________
8. Position in the cooperative
___________Officer, specify ______________________________________
___________Manager, specify _____________________________________
III. REPAYMENT OF LOAN
1. What was the latest loan you availed from the cooperative?
__________________________________________________________
2. What was the purpose of the loan? _______________________________
3. What type of loan did you avail?
Type of loan
Amount
Term
Emergency loan
________________
________________
Agricultural loan
________________
________________
Others, specify
_________________
_________________
_________________
_________________
_________________
_________________
4. How did you pay your loan?
________________through collector from cooperative
________________personally went to the cooperative
________________ sent payment through representative
________________ others, specify _____________________________________
5. Methods of payment (please check)
_________________ full payment
_________________ installment
_________________ others, specify ____________________________________
6. If installment, what were the terms of payment?
____________ Weekly ________ quarterly
________ others, specify
____________ monthly ________ annually
7. Describe the maturity period of your loan?
_________short ________long
________just enough
_________others, specify ____________________________________________
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
28
V. MEASURES EMPLOYED BY COOPERATIVE TO REDUCE LOAN
DELINQUENCY
6. Methods of collecting payments
_________ full payment
_________installment
_________others, specify ____________________________________________
7. If Installment, what are the terms of payment employed?
_______weekly
________quarterly
Others, specify___________
_______monthly
________annually
Factors Affecting Loan Payment Delinqunecy o f La Trinidad Vegetable Trading Post Multi-
Purpose Cooperative, in La Trinidad, Benguet / Dominga G. Kiwa-en. 2007
Document Outline
- Factors Affecting Loan PaymentDelinqunecy of La Trinidad Vegetable Trading Post Multi-Purpose Cooperative, in LaTrinidad, Benguet
- BIBLIOGRAPHY
- ABSTRACT
- TABLE OF CONTENTS
- INTRODUCTION
- REVIEW OF LITERATURE
- METHODOLOGY
- RESULTS AND DISCUSSION
- SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- LITERATURE CITED
- Appendix