BIBLIOGRAPHY PILAS, DESENIA K. APRIL...
BIBLIOGRAPHY
PILAS, DESENIA K. APRIL 2007. Profile of Member-Borrowers in the
Progressive Citizen Multipurpose Cooperative at Abatan, Buguias, Benguet. Benguet
State University, La Trinidad, Benguet.
Adviser: Andrew K. Del-ong, BS
ABSTRACT
This study was conducted to determine the demographic profile of the member-
borrowers of Progressive Citizen Multipurpose Cooperative, find out the kinds of loan
commonly availed by the members, find out how the members used their loans, find out
how the borrowers were benefited by the loans, and find out the problems encountered by
the members borrowers on loaning and repaying the loan.
This study was conducted in Abatan Buguias on January 2007. The respondents
were some officers and staff and 51 member-borrowers from the cooperative.
Majority of the respondents were of middle age, female, married, had 4 – 6 family
members, and had post secondary education. The commonly availed loans were the
agricultural loan, educational loan, and the regular loan. Majority of the borrowers used
their agricultural loan for the purchase of tools and equipment, the educational loan for
paying tuition fees of their children, and the regular loan for buying consumer goods. The
member-borrowers were benefited by the loans by the improved tools and equipment
they bought they were able to increase their production and the value of their farm
increased because of the improvements they introduce in their farm; they were able to
send their children to school; they were able to pay their hospital bills; and they were able
to improve their houses and finance their businesses.
The causes of failure in the repayment of loan were the following: crop failure
due to natural calamity and low market price of produce, bankruptcy of business,
borrowed money was diverted to non-productive uses, and money intended for paying the
loans was used for another purpose.
The problems they encountered were the following: difficulty in getting co-maker
and collateral that delays loan approval and release of loan; lack of money to pay their
loan on time because the loan was not used for the intended purpose and money for
paying loan was used for other purposes in addition to bankruptcy of business.
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TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION
Rationale of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
REVIEW OF LITERATURE
Demographic Profile of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Membership in Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Requirements in Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Uses of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Perceived Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Causes of Failure of Credit Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Problems on Loan Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
METHODOLOGY
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Respondents of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
iii
Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
RESULTS AND DISCUSSION
Respondents’ Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Sources of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Number of Years as Member in the
15
Cooperative. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .
Types of Loan Availed by the Respondents . . . . . . . . . . . . . . . . . . . . . . .
15
Number of Times Each Type of Loan
16
Was Availed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Uses of Loan Availed . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .
18
Sources of Funds for Payment of Loan . . . . . . . . . . . . . . . . .. . . . . . . . . .
20
Loan Repayment Practices by the
Member-borrowers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Benefits Derived from the Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
Causes of Failure on Repayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Problems Encountered . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
26
Conclusions. . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . .. . . .
28
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
APPENDICES
Appendix A . Survey Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
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Appendix B. Letter to the Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
v
INTRODUCTION
Rationale
Presently, our country is facing economic crisis, people continue to secure and
stable source of income for better living; they continue to discover how to uplift their
lives. According to Onagan et al., (1973) cooperatives have a big role in our society
specifically in the area of livelihood of families. Credit is one of the services rendered by
the cooperative and this could help the people meet their financial problems.
Garcia and Guanzon (1991) said that, people, whether rich or poor always meet
financial problems. The rich however are not beset with the problems of money as much
as the poor because they can easily secure loans from legitimate, financial institutions at
low rates of interest. The poor having no collateral have no access to these institutions.
To meet their financial needs, the “have nots” find the sources open of them. One of the
popular sources—the usurers, who have mercilessly scalped the poor of all countries for
ages. The other is their associations like a cooperative which is owned, operated and
managed by them for their mutual benefit and welfare.
The Progressive Citizen Multipurpose Cooperative (PCMC), just like all other
cooperatives hopes to help their members uplift their social and economic status. The
PCMC is located at Abatan, Buguias, Benguet. It was first established in 1969 and
registered with the Securities and Exchange Commission (SEC) before it was registered
on October 25, 1991 with the Cooperative Development Authority (CDA) and it was
amended on September 17, 1997. It was established with 15 incorporations in Abatan,
Buguias, Benguet. Record shows that as of 2005 the Authorized capitalization of the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas.l 2007
2
Cooperative were P33, 200,000.00 and the Subscribed Share Capital amounted to P8,
300, 000.00. As of 2006 there were 152 members in the cooperative.
The foregoing remarkable growth of the Cooperative speaks well of the loyalty of
some members, the strong determination and commitment of the Board of Directors.
Committee members and Management staff who had been serving. The Cooperative is
providing loans to its members which have helped them in their personal needs. It is on
this basis that this study was conducted with the intention to the repayment rate of the
Cooperative. A profile of borrowers will help cooperative management to adjust policies
or rules with regards to credit in order to facilitate payment of loans by borrowers.
Statement of the Problem
The study intended to answer the following questions:
a. What is the demographic profile of the member-borrowers of the Progressive
Citizen Multipurpose Cooperative?
b. What are the kinds of loan mostly availed by the member-borrowers?
c. How were the loans used?
d. What are the benefits derived from the loans?
e. What are the problems encountered by the member-borrowers on loan
repayment?
Objectives of the Study
The objectives of the study were to:
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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a. determine the demographic profile of the member-borrowers of the
Progressive Citizen Multipurpose Cooperative.
b. determine the kinds of loan commonly availed by the member-borrowers.
c. find out how the members used their loans.
d. determine the benefits that the borrowers get from the loans.
e. determine the problems encountered by the member-borrowers on loaning and
repaying the loans.
Importance of the Study
The result of this study would serve as a way for the members to recognize their
duties and responsibilities as part of the cooperative especially with regards to paying of
loans. It would also serve as a basis for the cooperative to improve its loan collections.
Furthermore, it could also serve as a source of information for further research on other
related studies.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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REVIEW OF LITERATURE
Demographic Profile of Borrowers
From Wikipedia, the free encyclopedia, a demographic or demographic profile is
a term used in marketing and broadcasting, to describe a demographic grouping or a
market segment. This typically involves age bands (as teenagers do not wish to purchase
denture fixant), social class bands (as the rich may want different products than middle
and poorer classes and may be willing to pay more) and gender (partially because
different physical attributes require different hygiene and clothing products, and partially
because of the male/female mindsets). A study of the demographic profile may also be
important in analyzing the paying capacity of borrowers of loan.
As they said, “The small can become big if efforts put together” in order for the
cooperative to thrive. Not just one person or two but everyone should be properly
motivated and there should be “mutual trust” among the members. Cooperatives demand
professionalism and this includes education and commitment of all members.
Cooperative need “one voice” of all members and in such way they could eventually gain
social, economical, and even political success through such cooperatives.
The cooperative is also known as “the bank of the common man” because
members secure loans from the cooperative at a lower interest rate compared to the
banks. It is also through cooperative that other countries achieve economic progress. The
cooperative provided the low income people the chance to complete in the capitalist
market.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Most cooperative allow members to borrow from three to five times the amount
of their capital contribution. Cooperative profits are distributed to their members in form
of dividends based on their equity contribution or are retained to increase the capital base
that benefits accruing.
According to Sacay (1985) the common thread that seems to through all the
studies was the role played by the viability of the borrowers alternatively measured by the
net income, production, marketable surplus and other factors. Good borrowers tend to
have higher value of assets, production value, sales income, net income, savings and
quality of life than the delinquent borrowers.
Membership in Cooperative
Any natural person who is a Filipino Citizen, a cooperative or non-profit
organization with juridical personality may be members of the cooperative provide that
the qualifications prescribed for membership is limited in the by-laws are satisfied.
For primary cooperatives, membership is limited to natural people (or persons). In
secondary cooperatives, the members are primary cooperatives and for tertiary
cooperatives membership is only for secondary cooperatives upward to one or more apex
organization Abasolo et al., 1996).
Requirements in Borrowing
According to Macli-ing (2002), the requirements to be submitted are according to
their purposes. For the livelihood projects, the requirements to be submitted in requiring
loans under Real Estate Mortgage: Title/Tax declaration, Sketch plan of the project,
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Certificate of non-tax delinquency, TIN/cedula, Applicant’s photo which is attached to
the loan application form.
Meanwhile, for vegetable trading, requires under chattel mortgages were: Picture
of the vehicle, stencil of classis, No./motor No., TIN/cedula, CR/OR, Insurance of the
vehicle, certification form that was owned by the borrowers, registration of deeds,
applicant’s photo, as accepted collateral which was attached to the application form.
Lastly, for the agricultural loan the following required such as: farm plan and
budget, and project proposal for those who are engaged in entrepreneur and builder.
The general purpose of imposing requirements and collateral is to ensure the
money borrowed. Some agencies even consider age, educational attainment, size of the
family and occupation of the applicant before deciding on the loan. Cawaon (1982) stated
that the practice of requiring loan collateral for loaning is for the protection of the
investors for losses due to the failure of the business or bad faith of borrowers.
Uses of Loans
Ganawed (1997) said that the purpose of agricultural borrowers in loaning is to
finance their livelihood activities such as vegetable production, cut flower production,
swine production, poultry production and other agricultural activities.
Likewise, the commercial borrowers use loans to finance their commercial
business such as sari-sari store, restaurant/eatery, vegetable trading, dry goods store, shoe
repair shop and other commercial activities.
The use of credit, in the broad sense of an exchange of current for future resources
is probably as old as organized society. It can promote economic growth and contribute
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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to the nation’s wealth. By this, a business firm may borrow to put the loan proceeds to
work in an income producing assets which are expected to earn, in due course, more than
the amount borrowed.
Perceived Benefits
Credit cooperative, as stated by Fajardo (1994), usually charges one percent
interest plus a nominal service charge.
According to Macli-ing (2002), credit cooperative in develop countries have been
very effective in improving the social and economic condition of the poor, small farmers,
fisherman, factory workers, and other low-income groups.
In other society, we can observe that through the help of credit cooperative the
poor members especially the farmers were benefited.
Causes of Failure of Credit Cooperatives
According to Taganas (1979), the failures of cooperatives are often due to the
member-borrowers to pay their loans or the delinquency of members in paying their
loans. The failure of members to pay their loans, according to Taganas, was because the
money was diverted to non-farm activities such as food, house repair, education and
recreation. Some loans were used to settle other accounts from suppliers of farm inputs.
Problems on Loan Collection
Loan delinquency has always been a big problem among cooperatives and the
failure to recognize this problem and to institute the necessary remedy leads to the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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demoralization of both members and officers and ultimately to the failure of the
cooperatives (Macaranas, 1991).
The causes of difficulty in loan collection reported on farmers as written by Biase
(1979) were: money was spent for other purposes, low production, natural calamities,
wrong timing of collection, low market price, and high cost of production and lack of
transportation facilities.
Definition of Terms
Profile - pertains to all the information and data that are gathered from the
cooperatives about the member-borrowers of the PCMC.
Credit - the power to obtain goods and services as well as cash by giving a
promise to pay money on demand or at specified date in the figure. It is
used synonymously with loan.
Cooperatives - these are voluntarily associations of people organized for the
purposes of meeting their common needs, mutual action, democratic
control and sharing equal benefits.
Collateral - any property or rights pledged by the borrower, a security for the loan
availed of which is usually presented in the form of legal document.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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METHODOLOGY
Locale and Time of the Study
The study was conducted in Abatan, Buguias, Benguet where PCMPC is located.
The cooperative is found in Abatan near the Lutheran Hospital and it is accessible to all
the members. The survey was conducted on January, 2007 during the regular General
Assembly meeting of the cooperative. The map of Abatan showing the location of the
cooperative is shown in Figure 1.
Respondents of the Study
The respondents of this study included most of the members of the Board of
Directors, the general manager, the treasurer, the secretary, the sales clerk, the loan
collector and 51 member-borrowers of the Progressive Citizen Multipurpose Cooperative
who borrowed from the cooperative for 2000 to 2006. The respondents were participants
during the general assembly meeting of the cooperative.
Data Collection
A survey questionnaire was used to gather data. The questionnaire was pre-tested
first before it was used. The researcher personally administered the survey questionnaire.
Data Gathered
The primary data gathered from the respondents were their profile, types of the
loan they availed, the uses of their loans, benefits they derived from the loan and
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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problems they encountered in borrowing and repaying their loans. Information regarding
the frequency of payment and amount of loan paid by the member-borrowers were taken
from their records in the cooperative.
Data Analysis
The data collected were analyzed and interpreted according to the objectives
using descriptive statistics.
PCMPC
Figure 1. Map of the Study Area
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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RESULTS AND DISCUSSION
Respondents’ Profile
The personal profile of the respondents is presented in Table 1. The profile
included their age, sex, civil status, household size, household income, and educational
attainment.
Age. Most (31.25%) of the respondents were between the age of 41 – 50 years old
followed by the age bracket of 51 – 60 years old with 25.40%. The age bracket of 31 –
40 years old was next with 23.44% while the 21-30 years old and 61years old and above
were the least in number with 9.37% each. The finding shows that majority of the
respondents were of middle age. This also implies that majority of the members who
borrowed for the year 2000 to 2006 were of middle age.
Sex. Majority (76.19%) of the respondents were female and only 23.81% were
male. According to the female respondents, their husbands do not have time to attend
the cooperative’s activities because they are always pre-occupied with farm activities and
other businesses, thus they delegated to their wives the membership to the cooperative.
Civil status. All of the respondents were married. However, 11.11% were already
widowed. This indicates that all of them have families to support.
Household size. There were very few (9.52%) respondents with 1-3 household
size. Majority (71.43%) had 4 - 6 family members. This is very close to the average
household size in the country which is 6 - 7 persons. There were 12 or 19.05% with 7 –
10 household members.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Household income. The respondents’ earnings were measured yearly. Most of the
respondents (49.21%) had an annual income of P51,000 – P100,000, 23.81% had
P101,000 – P150,000, 17.46% had P50,000 and below, 6.35% had P151,000 – P200,000,
and only 3.17% had more then P200,000. This finding implies that majority of the
respondents had an annual income of less than P100,000.
Educational attainment. The finding shows that all of the respondents had
formal education and very few were reached elementary level. Majority of them pursued
a post secondary education with 49.21% had a college degree while 4.76% had a
vocational course. There were 30.16% that reached the secondary level.
Table 1. Profile of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Age
61 and below
6
9.34
51 – 60
16
25.40
41 – 50
20
31.25
31 – 40
15
23.44
21 – 30
6
9.37
TOTAL
63
100.00
Sex
Male
15
23.81
Female
48
76.19
TOTAL
63
100.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Table 1. Continued ….
PARTICULAR
FREQUENCY
PERCENTAGE
Civil Status
Married
56
88.89
Widow/widower
7
11.11
TOTAL
100.00
Household Size
7 – 10
12
19.05
4 – 6
45
71.43
1 – 3
6
9.52
TOTAL
63
100.00
Household Income
P 201,000 and above
2
3.17
P 151,000 – P200,000
4
6.35
P 101,000 – P 150,000
15
23.81
P 51,000 – P 100,000
31
49.21
P 50,000 and below
11
17.46
TOTAL
63
100.00
Educational Attainment
College Degree
31
49.21
Vocational Degree
3
4.76
Secondary
19
30.16
Elementary
10
15.87
TOTAL
63
100.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Sources of Income
Table 2 shows that the sources of income of the respondents were from vegetable
farming, salaries as government or private employees, wages as skilled laborers, and
from business (sari-sari store, stall operation, restaurants and from trucking).
There were 38 respondents that receives salary monthly, 26 said they get their
income from vegetable farming. Eighteen get their income from direct farm production
while 8 through the supply system wherein 5 were suppliers and 3 operated the farm.
There were 2 respondents who get their income from wages as skilled laborers and 24
respondents get their income from business operation. Ten of them were operating sari-
sari store, 2 were renting stall in the market place and operate sari-sari store, 5 were
operating restaurants, and 7 were engaged in trucking or vegetable transporting business.
Table 2. Sources of income of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Vegetable Farming
26
28.9
Farm operator
18
69.23
Supply system
8
30.77
Salary
38
42.2
Government employees
7
18.40
Private employees
31
81.60
Wages for Skilled Labor
2
2.2
Business
24
26.7
Sari-sari store
10
41.70
Stall operator and store owner
2
8.30
Restaurant
5
20.80
Trucking/vegetable transporting
7
29.20
TOTAL
63
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Number of Years as Member in the Cooperative
Table 3 presents the number of years the respondents were members in the
cooperative. As found, 19 or 30.16% of the respondents were members for 1 - 5 years,
19.05 for 6 – 10 years, 17.46% for 11 – 15 years, 12.70% for 16 – 20 years, 1.59% for 21
– 25 years, 6.35% for 26 – 30 years, and 12.70% for 31 years and above. This finding
implies that most of the respondents were members in the cooperative for ten years and
below and very few were members for more than twenty years.
Table 3. Number of years as members in the cooperative
NUMBER OF YEARS
FREQUENCY
PERCENTAGE
1 – 5
19
30.16
6 – 10
12
19.05
11 – 15
11
17.46
16 – 20
8
12.70
21 – 25
1
1.59
26 – 30
4
6.35
31 and above
8
12.70
TOTAL
63
100.00
Types of Loan Availed by the Respondents
The types of loan availed by the respondents were agricultural loan, educational
loan, emergency loan, regular loan, and special financing loan as shown in Table 4. The
types of loan mostly availed by the members were the regular loan (55.50%), educational
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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loan (42.90%), and agricultural loan (41.30%). The least availed loan was the special
financing loan because this loan can only be availed if there is a project to be financed.
This loan can also be given to non-members. There were also very few members who
availed of the emergency loan because the amount is small compared to the other types of
loan.
Table 4. Types of loan availed by the respondents
TYPES OF LOAN
FREQUENCY*
PERCENTAGE
Agricultural loan
26
41.30
Educational loan
27
42.90
Emergency loan
11
17.50
Regular loan
35
55.50
Special financing loan
4
6.30
* Multiple Response
Number of Times of Each Type of Loan
Was Availed
Table 5 presents the number of times the respondents availed of the same type of
loan for the years 2000 to 2006. The result shows that most of the members availed of
the agricultural loan 5 time and the other respondents borrowed the same type of loan less
than 3 times. For the educational loan, most (33.33%) of them borrowed twice and
majority borrowed less than three times. For the emergency loan, an equal number
borrowed twice and four times with 27.27% each. Only one member borrowed 5 times.
For the regular loan, most of them (31.43%) borrowed once. An equal number of
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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members borrowed twice, thrice and five time with 20% each. All the 4 borrowers who
availed of the special financing loan borrowed twice.
Table 5. Number of times the type of loan was availed by the respondents
NUMBER OF TIMES AVAILED
FREQUENCY*
PERCENTAGE
Agricultural loan
1
6
23.08
2
7
26.92
3
1
3.85
4
1
3.85
5
11
42.31
TOTAL
26
100
Educational loan
1
7
25.92
2
9
33.33
3
2
7.41
4
5
18.52
5
4
14.82
TOTAL
27
100
Emergency loan
1
2
18.18
2
3
27.27
3
2
18.18
4
3
27.27
5
1
3.70
TOTAL
11
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
18
Table 5. Continued …
NUMBER OF TIMES AVAILED
FREQUENCY
PERCENTAGE
Regular loan
1
11
31.43
2
7
20.00
3
7
20.00
4
3
8.57
5
7
20.00
TOTAL
35
100
Special financing loan
2
4
100
TOTAL
4
100
Uses of Loan Availed
For agricultural loan, majority of the borrowers used it to finance agricultural
production, a few of them (3 or 11.54%) used it for farm improvement while 26.92% of
the respondents used it to purchase farm tools and equipment. For the educational loan,
majority (88.89%) used it to pay the tuition fee of their children and only 3 or 11.11%
used it for buying school supplies. Majority of the member-borrowers who availed of
emergency loan used it for hospitalization and the others used it to buy consumer goods.
The regular loan was used by 71.43% of the respondents for buying consumer goods
while 14.28% each used the loan for the purchase of farm inputs and for paying the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
19
tuition fee of their children. The special financing loan was used by all the borrowers to
buy needed things as shown in Table 6.
Table 6. Uses of loans availed by the respondents
USES OF LOAN
FREQUENCY
PERCENTAGE
Agricultural loan
Purchase of farm inputs
7
26.92
Purchase of farm tools and equipment
16
61.54
For farm improvement
3
11.54
TOTAL
26
100
Educational loan
Tuition of children
24
88.89
Buy school projects/requirements
3
11.11
TOTAL
27
100
Emergency loan
Hospitalization
7
63.64
For buying needed things
4
36.36
TOTAL
11
100
Regular loan
For consumption
25
71.43
Purchase of arm inputs
5
14.28
Tuition fee of children
5
14.28
TOTAL
35
100
Special financing loan
For buying things needed
4
100
TOTAL
4
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
20
Sources of Funds for Payment of Loan
Table 7 presents the sources of cash for payments of loan by the member-
borrowers. Most (48.53%) of the borrowers used their salary for paying their loan. There
were 19 or about 28% of the respondents used their income from their business to pay
their loan and 23.53% paid their loans from the sales of their vegetables.
Table 7. Sources of fund for paying loans by the respondents
SOURCES OF FUND
FREQUENCY*
PERCENTAGE
Sales of vegetables produced
16
23.53
Income from business
19
28.00
Salary and wages
33
48.53
* Multiple response
Loan Repayment Practices by the Member-borrowers
Table 8 presents that majority (57.14%) of the respondents paid their loans by
going personally to the cooperative office while 36.51% paid their loans through the
collector and only 6.35 sent their payments through a representative. The finding further
showed that majority (84.13%) paid their loan on installment basis. However, there were
15.87 who paid their loan upon maturity. This implies that majority of the members were
paying their loans on installment basis. Majority of those who paid on installment gave it
on a monthly basis. There were 12.70% who paid on a quarterly basis while 6 or 9.52%
paid their loans on a daily basis.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
21
Table 8. Loan repayment practices of the respondents
PRACTICES
FREQUENCY
PERCENTAGE
How payment was made
Through collector
23
36.51
Paid personally in the office
36
57.14
Through representative
4
6.35
TOTAL
63
100
Mode of Payment
Full payment
10
15.87
Installment
53
84.13
TOTAL
63
100
Interval of Installment Payment
Daily
6
9.52
Monthly
39
61.90
Quarterly
8
12.70
TOTAL
53
100
Benefits Derived from the Loan
Table 9 presents the benefits the respondents derived from the loans they availed
from the cooperative. The benefits derived from the agricultural loan as mentioned by the
respondents were as follows: the value of their farm increased because of the
improvements, their production increased because of the improved farm practices and
improved tools and equipment and farm inputs. For the educational loan, the respondents
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
22
mentioned that they were able to send their children to college, they were able to buy
books and school supplies of their children and were able to buy the schools projects of
their children. The emergency loan benefited them because they were able to pay hospital
bills and buy medicines and many of them were able to buy consumer goods when they
badly needed them. Some said they were able to pay their debts and bills on time thus
they were not penalized. For the regular loan, many of them were benefited from the
house improvement and helped them finance their business. Some were able to have their
appliances and vehicles repaired. One each was able to buy needed appliances, a vehicle,
and land. The special financing loan benefited them because they were able to buy the
things they needed.
Table 9. Benefits derived from the loan
BENEFITS FROM THE LOAN
FREQUENCY
PERCENTAGE
Agricultural loan
Increased value of the farm due to
9
36
improvement introduced
Increased in production
6
24
Improved farm practices
3
12
Improved tools and equipment
7
28
TOTAL
25
100
Educational loan
Send children to college
17
48.57
Buy books and school supplies
11
31.43
Buy school projects of children
7
20.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
23
Table 9. Continued ….
Emergency loan
Pay hospital bills and buy medicines
3
15
Buy additional farm supplies
5
25
Buy consumer goods when badly needed
9
45
Pay debts and bills on time
3
15
TOTAL
11
100
Regular loan
Financed their business
19
42.22
Improved their house
20
44.44
Had their appliances, vehicles, tools repaired
3
6.67
Buy needed appliances
1
2.22
Buy land
1
2.22
Buy vehicle
1
2.22
TOTAL
45
100
Special financing loan
Buy the things they needed
4
100
TOTAL
4
100
Causes of Failure on Repayment
Table 10 presents the causes of failure of the respondents to pay their loans.
Nineteen or about 30% mentioned that they had no money at the scheduled of payment.
Fourteen or 21.54% mentioned low price of their product that their sales proceeds was
not even enough to buy their family needs and starting capital and another 6 respondents
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
24
or 9.23% said that their business went bankrupt. There were about 13% who said that
their crops failed due to natural calamity. Eleven respondents or 17% said that their loan
was used for non-productive purpose thus there was no income for paying the loan while
7 or 11% said the money for payment of loan was used for another purpose.
Table 10. Causes of failure on repayment
CAUSES OF FAILURE
FREQUENCY PERCENTAGE
Bankruptcy of the business
6
9.23
Low market price of produce
14
21.54
Crop failure due to calamity
8
12.31
No money at the schedule of payment
19
29.23
Loan was used for nonproductive purpose
11
16.92
Money for payment was used for another purpose
7
10.77
TOTAL
65
100
Problems Encountered
There were 50.79% of the respondents who commented on the procedures in
borrowing. They said that securing collateral and co-makers were just making them delay
in getting their loans. Thirty three percent of the respondents said that their problem in
borrowing was the delayed release of the loan because they have to wait for the
availability of funds while 15.87% mentioned delayed approval of loans.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
25
Table 11. Problems encountered by the respondents
PROBLEMS
FREQUENCY PERCENTAGE
Delayed release of loans
21
33.33
Difficulty in getting co-maker and collateral
32
50.79
Delayed approval of loan
10
15.87
TOTAL
63
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
26
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
This study was conducted to determine the demographic profile of the member-
borrowers of the Progressive Citizen Multipurpose Cooperative, determine the kinds of
loan commonly availed by the member-borrowers, find out how the members used their
loans, determine the benefits that the borrowers get from the loans, and determine the
problems encountered by the member-borrowers on loan repayment.
This study was conducted in January 2007 with 63 member-borrowers from
Progressive Citizen Multipurpose Cooperative as respondents. It was found that majority
of the members were female, with ages between 31 – 50 years old, married, with
household size between 4 – 6 members, had an income range of P 51,000 - 100,000 per
annum and finished post secondary education. Most of them were salaried employees,
either as government employee or private employee and some were farmers and business
owners. Most of them were members in the cooperative for less than ten years.
The type of loan commonly availed by the members was the regular loan
followed by agricultural loan and educational loan. The agricultural loans were used by
the members in financing their farm production, and for the purchase of tools and
equipment as well as for the improvement of their farms. The educational loan was used
merely for the education of their children while the regular loan was used mostly for
basic consumption. The emergency loan was mostly used for payment of hospital bill and
purchase of medicines.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
27
The members mentioned several benefits derived from the loans they got from the
cooperative. With the loans they availed they had capital for their farm operation and
their business, they were able to send their children to school and buy the needs of their
children, they were able to pay their bills and debts on time from the loan proceeds, they
were able to buy the things the needed and they were able to pay their hospital bill and
buy medicines which they would not have done without the loan. However they also
mentioned some problems they met regarding their loans. Some said their loans were
delayed because of the unavailability of funds. They also met problems in the payment of
their loans because when it was time to pay their loans, they had no money thus they have
to pay a surcharge. Their failure to pay their loans on time were associated with several
factors like low price of their produce, crop failure due to calamity, and bankruptcy of
their business. Some of the factors were due to their own doing like misuse of loans and
using the money for loan payment on another purpose.
Conclusions
Based on the finding of the study, the following conclusions were made:
1. Majority of the members are females, married, finished college education,
salaried employees and receiving an annual salary ranging from P100,000 to
P150,000 per annum.
2. Majority of the member- borrowers availed various loans from the cooperative.
The most common was the regular loan where they used it for their basic
consumption, educational loan where they used it for tuition fee of their children.
The respondents who availed of agricultural loan used it to purchase farm tools
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
28
and equipment while those who availed of the emergency loan used it for
hospitalization and those who borrowed the special financing loan used it for
buying things they needed.
3. The member-borrowers encountered problem in repaying their loans because they
did not use their loan on the intended purpose. Besides, they use the money
intended for paying their loan for other purposes. Some were hard up in paying
their loans due to bankruptcy of their business brought about by natural calamity
and low market price of their crops.
Recommendations
In order to sustain the dynamism of the cooperative, the following
recommendations were formulated:
1. Educational committees should provide proper education about the cooperatives
to the members not to look the cooperative as a source of credit.
2. The cooperative should mandate their credit committee to check if loans were
used for the purpose stated in the loan form that are used as bases for releasing
their loans.
3. Cooperative must be strict in implementing the policies on loan collection to
avoid delay of payment and lacking of the fund for lending and to be ensured on
good circulation of the business.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
29
LITERATURE CITED
ABASOLO, P.A., M.A. V. RUIZ, and F.B. BERTAOL. 1996. Cooperatives in the
Philippines. Manila. GIC Enterprises and Co., Inc. Pp. 1-3.
BIASE, L.ML. 1979. Repayment deficiencies of agricultural loans in Buguias, Benguet.
BS Thesis. Benguet State University, La Trinidad, Benguet. P.13.
CAWAON, J.W. 1982. Determination of agricultural credit reguirements of small
farmers in Pugo, La Union. BS Thesis. Benguet State University, La Trinidad,
Benguet. P. 13.
FAJARDO, F.R. 1994. Entreprenuership. 24K Printing Co., Inc. 33 Acebo St., Marulas,
Valenzuela, Metro Manila. P. 94.
GANAWED, D. 1997. Credit and repayment performance of loan borrowers of
Cooperative Bank of Benguet. BS Thesis. Benguet State University, La Trinidad,
Benguet. P. 24.
MACARANAS, M.J. 1991. Manual for Training Cooperative Management Staff.
International Labor Organization Cooperative Entrepreneurs for Rural
Development. Quezon City, Philippines. P.25 .
MACLI-ING, V. A. 2002. Credit operation of the Universal Multipurpose Cooperative.
BS Thesis. BSU, La Trinidad, Benguet. Pp. 1-2.
ONAGAN, L.D., J.T. SIMANGAN and M.S. ESQUERRA. 1973. Cooperative Principles
and Practices. Quezon City: Onagan and Son Publishing Corporation. Pp.43-46.
SACAY, O.J. et al. 1985. Small Farmer’s Credit Dilemma. National Publishing Corp.
Manila, Philippines. P. 2.
TAGANAS, P. 1979. Repayment deficiencies of agricultural loan in Bontoc Mountain
Province. BS Thesis. Benguet State University, La Trinidad, Benguet. P. 22.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
30
APPENDICES
Appendix A. Letter to the Respondents
College of Agriculture
DEPARTMENT OF AGRICULTURAL ECONOMICS
AND AGRIBUSINESS MANAGEMENT
Benguet State University
La Trinidad, Benguet
January 2007
Dear Respondents;
The undersigned is a fourth year Agribusiness student of Benguet State University, and
currently conducting a research titled “Profile of Member-Borrowers in the Progressive
Citizen Multipurpose Cooperative at Abatan, Buguias, Benguet.”
In this regard, may I humbly request your kind support and cooperation in answering the
attached questionnaire. Your kind assistance will enable me to complete the requirements
on my course. Rest assured that all data gathered will be kept confidential.
I highly appreciate your wholehearted support in this endeavor. Thank you very much
and God bless.
Respectively yours,
DESENIA K. PILAS
Researcher
Noted by:
ANDREW K. DEL-ONG
Adviser
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
31
Appendix B. Survey Questionnaire
Fill the blanks with the necessary information and check the choices that correspond to
each statement being asked.
A. Respondent’s Profile
Name:
Age:
Sex:
Civil Status:
Household Size:
Household Income per annum:
Sources of Income (please check)
( ) vegetable farming (please indicate if farm if:
___owner-operated
___supply system
___supplier
___operator
( ) salary
___government employee
___private employee
( ) wages for skilled laborers, carpenters, etc.
( ) business
___sari-sari store
___grocery
___stall operator (public market)
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
32
___restaurant
___trucking/vegetable transporting/hauling
___others (please specify)
Occupation of Spouse:
Highest Educational Attainment (please check)
( ) Elementary
( ) Secondary
( ) Vocational Course (please specify)
( ) College
( ) Post College Degree (please specify)
Number of years of membership in the cooperative (please specify)
Position in the Cooperative (please check)
( ) Board of Director
( ) General Manager
( ) Treasurer
( ) Book Keeper
( ) Member
B. Types of Loan Availed by the Member
From date of membership to the cooperative, please indicate the kinds of loans
you availed, number of times and the amounts you borrowed.
Type of Loan Availed
Number of times
Maximum Amount Granted
Agricultural loan
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
33
Educational loan
Emergency Loan
Regular Loan
C. Uses of Loans Availed
Loan Type
Uses
a. agricultural loan
( ) purchase of farm tools and equipment
( ) financed farm production (as capital)
( ) farm improvement
( ) others (please specify)__________________________
b. educational loan
( ) tuition fee of children
( ) for school requirements/projects
( ) others (please specify)______________
c. emergency loan
( ) hospitalization
( ) funeral expenses
( ) others (please specify)______________
d. regular loan
( ) consumption
( ) purchase of farm inputs
( ) tuition fee of children
( ) others (please specify)______________
Sources of payment(s) for the loans borrowed
( ) sales from vegetable farming
( ) salary
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
34
( ) income from business
( ) wages
( ) others (please specify)
How did you pay your loans to the cooperative?
( ) through collector from cooperative
( ) personally went to the cooperative
( ) sent payment through representative (ex: family member)
( ) others (please specify)
Mode of Payment
( ) full payment
( ) installment
( ) others (please specify)
· If installment, what were the terms of payment?
( ) weekly
( ) monthly
( ) quarterly
( ) annually
( ) others (please specify)
D. Benefits Derived from the Loan
1. Agricultural Loan
( ) increased value of the farm due to farm improvement
( ) increased in production
( ) improved farm practices
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
35
( ) improved tools and equipment
( ) Others (Pls. specify) _______________________________________
2. Educational Loan
( ) able to send children to college
( ) able to buy books and school supplies for my children
( ) able to buy the school projects of my children
( ) others (Pls. specify) __________________________________________
3. Emergency Loan
( ) able to pay hospital bills and buy medicine
( ) able to buy additional farm supplies on time
( ) it helped us to buy consumer goods when badly needed
( ) it helped us pay our debts/ bills on time
( ) others (Pls. specify) ________________________________________
4. Regular Loan
( ) it helped us finance our business
( ) it helped us improve/repair our house
( ) it helped us repair our appliances/vehicles/tools and equipment
( ) able to buy needed appliances
( ) able to buy land
( ) able to buy vehicle
( ) others (Pls. specify) ___________________________________________
E. Causes of Failures on Repayment
( ) bankruptcy of the business
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
36
( ) low market price
( ) crop failure due to calamity
( ) no money at the schedule of payment
( ) loan is used for non-productive purpose
( ) money for payment is used for another purpose
( ) others (please specify)
F. What are the problems you encountered in borrowing from your cooperative?
G. What are the problems you encountered in the repayment of your loans?
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
PILAS, DESENIA K. APRIL 2007. Profile of Member-Borrowers in the
Progressive Citizen Multipurpose Cooperative at Abatan, Buguias, Benguet. Benguet
State University, La Trinidad, Benguet.
Adviser: Andrew K. Del-ong, BS
ABSTRACT
This study was conducted to determine the demographic profile of the member-
borrowers of Progressive Citizen Multipurpose Cooperative, find out the kinds of loan
commonly availed by the members, find out how the members used their loans, find out
how the borrowers were benefited by the loans, and find out the problems encountered by
the members borrowers on loaning and repaying the loan.
This study was conducted in Abatan Buguias on January 2007. The respondents
were some officers and staff and 51 member-borrowers from the cooperative.
Majority of the respondents were of middle age, female, married, had 4 – 6 family
members, and had post secondary education. The commonly availed loans were the
agricultural loan, educational loan, and the regular loan. Majority of the borrowers used
their agricultural loan for the purchase of tools and equipment, the educational loan for
paying tuition fees of their children, and the regular loan for buying consumer goods. The
member-borrowers were benefited by the loans by the improved tools and equipment
they bought they were able to increase their production and the value of their farm
increased because of the improvements they introduce in their farm; they were able to
send their children to school; they were able to pay their hospital bills; and they were able
to improve their houses and finance their businesses.
The causes of failure in the repayment of loan were the following: crop failure
due to natural calamity and low market price of produce, bankruptcy of business,
borrowed money was diverted to non-productive uses, and money intended for paying the
loans was used for another purpose.
The problems they encountered were the following: difficulty in getting co-maker
and collateral that delays loan approval and release of loan; lack of money to pay their
loan on time because the loan was not used for the intended purpose and money for
paying loan was used for other purposes in addition to bankruptcy of business.
ii
TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION
Rationale of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
REVIEW OF LITERATURE
Demographic Profile of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Membership in Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Requirements in Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Uses of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Perceived Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Causes of Failure of Credit Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Problems on Loan Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
METHODOLOGY
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Respondents of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
iii
Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
RESULTS AND DISCUSSION
Respondents’ Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
Sources of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Number of Years as Member in the
15
Cooperative. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .
Types of Loan Availed by the Respondents . . . . . . . . . . . . . . . . . . . . . . .
15
Number of Times Each Type of Loan
16
Was Availed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Uses of Loan Availed . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .
18
Sources of Funds for Payment of Loan . . . . . . . . . . . . . . . . .. . . . . . . . . .
20
Loan Repayment Practices by the
Member-borrowers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Benefits Derived from the Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
Causes of Failure on Repayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Problems Encountered . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
26
Conclusions. . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . .. . . .
28
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
APPENDICES
Appendix A . Survey Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
iv
Appendix B. Letter to the Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
v
INTRODUCTION
Rationale
Presently, our country is facing economic crisis, people continue to secure and
stable source of income for better living; they continue to discover how to uplift their
lives. According to Onagan et al., (1973) cooperatives have a big role in our society
specifically in the area of livelihood of families. Credit is one of the services rendered by
the cooperative and this could help the people meet their financial problems.
Garcia and Guanzon (1991) said that, people, whether rich or poor always meet
financial problems. The rich however are not beset with the problems of money as much
as the poor because they can easily secure loans from legitimate, financial institutions at
low rates of interest. The poor having no collateral have no access to these institutions.
To meet their financial needs, the “have nots” find the sources open of them. One of the
popular sources—the usurers, who have mercilessly scalped the poor of all countries for
ages. The other is their associations like a cooperative which is owned, operated and
managed by them for their mutual benefit and welfare.
The Progressive Citizen Multipurpose Cooperative (PCMC), just like all other
cooperatives hopes to help their members uplift their social and economic status. The
PCMC is located at Abatan, Buguias, Benguet. It was first established in 1969 and
registered with the Securities and Exchange Commission (SEC) before it was registered
on October 25, 1991 with the Cooperative Development Authority (CDA) and it was
amended on September 17, 1997. It was established with 15 incorporations in Abatan,
Buguias, Benguet. Record shows that as of 2005 the Authorized capitalization of the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas.l 2007
2
Cooperative were P33, 200,000.00 and the Subscribed Share Capital amounted to P8,
300, 000.00. As of 2006 there were 152 members in the cooperative.
The foregoing remarkable growth of the Cooperative speaks well of the loyalty of
some members, the strong determination and commitment of the Board of Directors.
Committee members and Management staff who had been serving. The Cooperative is
providing loans to its members which have helped them in their personal needs. It is on
this basis that this study was conducted with the intention to the repayment rate of the
Cooperative. A profile of borrowers will help cooperative management to adjust policies
or rules with regards to credit in order to facilitate payment of loans by borrowers.
Statement of the Problem
The study intended to answer the following questions:
a. What is the demographic profile of the member-borrowers of the Progressive
Citizen Multipurpose Cooperative?
b. What are the kinds of loan mostly availed by the member-borrowers?
c. How were the loans used?
d. What are the benefits derived from the loans?
e. What are the problems encountered by the member-borrowers on loan
repayment?
Objectives of the Study
The objectives of the study were to:
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
3
a. determine the demographic profile of the member-borrowers of the
Progressive Citizen Multipurpose Cooperative.
b. determine the kinds of loan commonly availed by the member-borrowers.
c. find out how the members used their loans.
d. determine the benefits that the borrowers get from the loans.
e. determine the problems encountered by the member-borrowers on loaning and
repaying the loans.
Importance of the Study
The result of this study would serve as a way for the members to recognize their
duties and responsibilities as part of the cooperative especially with regards to paying of
loans. It would also serve as a basis for the cooperative to improve its loan collections.
Furthermore, it could also serve as a source of information for further research on other
related studies.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
4
REVIEW OF LITERATURE
Demographic Profile of Borrowers
From Wikipedia, the free encyclopedia, a demographic or demographic profile is
a term used in marketing and broadcasting, to describe a demographic grouping or a
market segment. This typically involves age bands (as teenagers do not wish to purchase
denture fixant), social class bands (as the rich may want different products than middle
and poorer classes and may be willing to pay more) and gender (partially because
different physical attributes require different hygiene and clothing products, and partially
because of the male/female mindsets). A study of the demographic profile may also be
important in analyzing the paying capacity of borrowers of loan.
As they said, “The small can become big if efforts put together” in order for the
cooperative to thrive. Not just one person or two but everyone should be properly
motivated and there should be “mutual trust” among the members. Cooperatives demand
professionalism and this includes education and commitment of all members.
Cooperative need “one voice” of all members and in such way they could eventually gain
social, economical, and even political success through such cooperatives.
The cooperative is also known as “the bank of the common man” because
members secure loans from the cooperative at a lower interest rate compared to the
banks. It is also through cooperative that other countries achieve economic progress. The
cooperative provided the low income people the chance to complete in the capitalist
market.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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Most cooperative allow members to borrow from three to five times the amount
of their capital contribution. Cooperative profits are distributed to their members in form
of dividends based on their equity contribution or are retained to increase the capital base
that benefits accruing.
According to Sacay (1985) the common thread that seems to through all the
studies was the role played by the viability of the borrowers alternatively measured by the
net income, production, marketable surplus and other factors. Good borrowers tend to
have higher value of assets, production value, sales income, net income, savings and
quality of life than the delinquent borrowers.
Membership in Cooperative
Any natural person who is a Filipino Citizen, a cooperative or non-profit
organization with juridical personality may be members of the cooperative provide that
the qualifications prescribed for membership is limited in the by-laws are satisfied.
For primary cooperatives, membership is limited to natural people (or persons). In
secondary cooperatives, the members are primary cooperatives and for tertiary
cooperatives membership is only for secondary cooperatives upward to one or more apex
organization Abasolo et al., 1996).
Requirements in Borrowing
According to Macli-ing (2002), the requirements to be submitted are according to
their purposes. For the livelihood projects, the requirements to be submitted in requiring
loans under Real Estate Mortgage: Title/Tax declaration, Sketch plan of the project,
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
6
Certificate of non-tax delinquency, TIN/cedula, Applicant’s photo which is attached to
the loan application form.
Meanwhile, for vegetable trading, requires under chattel mortgages were: Picture
of the vehicle, stencil of classis, No./motor No., TIN/cedula, CR/OR, Insurance of the
vehicle, certification form that was owned by the borrowers, registration of deeds,
applicant’s photo, as accepted collateral which was attached to the application form.
Lastly, for the agricultural loan the following required such as: farm plan and
budget, and project proposal for those who are engaged in entrepreneur and builder.
The general purpose of imposing requirements and collateral is to ensure the
money borrowed. Some agencies even consider age, educational attainment, size of the
family and occupation of the applicant before deciding on the loan. Cawaon (1982) stated
that the practice of requiring loan collateral for loaning is for the protection of the
investors for losses due to the failure of the business or bad faith of borrowers.
Uses of Loans
Ganawed (1997) said that the purpose of agricultural borrowers in loaning is to
finance their livelihood activities such as vegetable production, cut flower production,
swine production, poultry production and other agricultural activities.
Likewise, the commercial borrowers use loans to finance their commercial
business such as sari-sari store, restaurant/eatery, vegetable trading, dry goods store, shoe
repair shop and other commercial activities.
The use of credit, in the broad sense of an exchange of current for future resources
is probably as old as organized society. It can promote economic growth and contribute
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
7
to the nation’s wealth. By this, a business firm may borrow to put the loan proceeds to
work in an income producing assets which are expected to earn, in due course, more than
the amount borrowed.
Perceived Benefits
Credit cooperative, as stated by Fajardo (1994), usually charges one percent
interest plus a nominal service charge.
According to Macli-ing (2002), credit cooperative in develop countries have been
very effective in improving the social and economic condition of the poor, small farmers,
fisherman, factory workers, and other low-income groups.
In other society, we can observe that through the help of credit cooperative the
poor members especially the farmers were benefited.
Causes of Failure of Credit Cooperatives
According to Taganas (1979), the failures of cooperatives are often due to the
member-borrowers to pay their loans or the delinquency of members in paying their
loans. The failure of members to pay their loans, according to Taganas, was because the
money was diverted to non-farm activities such as food, house repair, education and
recreation. Some loans were used to settle other accounts from suppliers of farm inputs.
Problems on Loan Collection
Loan delinquency has always been a big problem among cooperatives and the
failure to recognize this problem and to institute the necessary remedy leads to the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
8
demoralization of both members and officers and ultimately to the failure of the
cooperatives (Macaranas, 1991).
The causes of difficulty in loan collection reported on farmers as written by Biase
(1979) were: money was spent for other purposes, low production, natural calamities,
wrong timing of collection, low market price, and high cost of production and lack of
transportation facilities.
Definition of Terms
Profile - pertains to all the information and data that are gathered from the
cooperatives about the member-borrowers of the PCMC.
Credit - the power to obtain goods and services as well as cash by giving a
promise to pay money on demand or at specified date in the figure. It is
used synonymously with loan.
Cooperatives - these are voluntarily associations of people organized for the
purposes of meeting their common needs, mutual action, democratic
control and sharing equal benefits.
Collateral - any property or rights pledged by the borrower, a security for the loan
availed of which is usually presented in the form of legal document.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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METHODOLOGY
Locale and Time of the Study
The study was conducted in Abatan, Buguias, Benguet where PCMPC is located.
The cooperative is found in Abatan near the Lutheran Hospital and it is accessible to all
the members. The survey was conducted on January, 2007 during the regular General
Assembly meeting of the cooperative. The map of Abatan showing the location of the
cooperative is shown in Figure 1.
Respondents of the Study
The respondents of this study included most of the members of the Board of
Directors, the general manager, the treasurer, the secretary, the sales clerk, the loan
collector and 51 member-borrowers of the Progressive Citizen Multipurpose Cooperative
who borrowed from the cooperative for 2000 to 2006. The respondents were participants
during the general assembly meeting of the cooperative.
Data Collection
A survey questionnaire was used to gather data. The questionnaire was pre-tested
first before it was used. The researcher personally administered the survey questionnaire.
Data Gathered
The primary data gathered from the respondents were their profile, types of the
loan they availed, the uses of their loans, benefits they derived from the loan and
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
10
problems they encountered in borrowing and repaying their loans. Information regarding
the frequency of payment and amount of loan paid by the member-borrowers were taken
from their records in the cooperative.
Data Analysis
The data collected were analyzed and interpreted according to the objectives
using descriptive statistics.
PCMPC
Figure 1. Map of the Study Area
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
11
RESULTS AND DISCUSSION
Respondents’ Profile
The personal profile of the respondents is presented in Table 1. The profile
included their age, sex, civil status, household size, household income, and educational
attainment.
Age. Most (31.25%) of the respondents were between the age of 41 – 50 years old
followed by the age bracket of 51 – 60 years old with 25.40%. The age bracket of 31 –
40 years old was next with 23.44% while the 21-30 years old and 61years old and above
were the least in number with 9.37% each. The finding shows that majority of the
respondents were of middle age. This also implies that majority of the members who
borrowed for the year 2000 to 2006 were of middle age.
Sex. Majority (76.19%) of the respondents were female and only 23.81% were
male. According to the female respondents, their husbands do not have time to attend
the cooperative’s activities because they are always pre-occupied with farm activities and
other businesses, thus they delegated to their wives the membership to the cooperative.
Civil status. All of the respondents were married. However, 11.11% were already
widowed. This indicates that all of them have families to support.
Household size. There were very few (9.52%) respondents with 1-3 household
size. Majority (71.43%) had 4 - 6 family members. This is very close to the average
household size in the country which is 6 - 7 persons. There were 12 or 19.05% with 7 –
10 household members.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Household income. The respondents’ earnings were measured yearly. Most of the
respondents (49.21%) had an annual income of P51,000 – P100,000, 23.81% had
P101,000 – P150,000, 17.46% had P50,000 and below, 6.35% had P151,000 – P200,000,
and only 3.17% had more then P200,000. This finding implies that majority of the
respondents had an annual income of less than P100,000.
Educational attainment. The finding shows that all of the respondents had
formal education and very few were reached elementary level. Majority of them pursued
a post secondary education with 49.21% had a college degree while 4.76% had a
vocational course. There were 30.16% that reached the secondary level.
Table 1. Profile of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Age
61 and below
6
9.34
51 – 60
16
25.40
41 – 50
20
31.25
31 – 40
15
23.44
21 – 30
6
9.37
TOTAL
63
100.00
Sex
Male
15
23.81
Female
48
76.19
TOTAL
63
100.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
13
Table 1. Continued ….
PARTICULAR
FREQUENCY
PERCENTAGE
Civil Status
Married
56
88.89
Widow/widower
7
11.11
TOTAL
100.00
Household Size
7 – 10
12
19.05
4 – 6
45
71.43
1 – 3
6
9.52
TOTAL
63
100.00
Household Income
P 201,000 and above
2
3.17
P 151,000 – P200,000
4
6.35
P 101,000 – P 150,000
15
23.81
P 51,000 – P 100,000
31
49.21
P 50,000 and below
11
17.46
TOTAL
63
100.00
Educational Attainment
College Degree
31
49.21
Vocational Degree
3
4.76
Secondary
19
30.16
Elementary
10
15.87
TOTAL
63
100.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
14
Sources of Income
Table 2 shows that the sources of income of the respondents were from vegetable
farming, salaries as government or private employees, wages as skilled laborers, and
from business (sari-sari store, stall operation, restaurants and from trucking).
There were 38 respondents that receives salary monthly, 26 said they get their
income from vegetable farming. Eighteen get their income from direct farm production
while 8 through the supply system wherein 5 were suppliers and 3 operated the farm.
There were 2 respondents who get their income from wages as skilled laborers and 24
respondents get their income from business operation. Ten of them were operating sari-
sari store, 2 were renting stall in the market place and operate sari-sari store, 5 were
operating restaurants, and 7 were engaged in trucking or vegetable transporting business.
Table 2. Sources of income of the respondents
PARTICULAR
FREQUENCY
PERCENTAGE
Vegetable Farming
26
28.9
Farm operator
18
69.23
Supply system
8
30.77
Salary
38
42.2
Government employees
7
18.40
Private employees
31
81.60
Wages for Skilled Labor
2
2.2
Business
24
26.7
Sari-sari store
10
41.70
Stall operator and store owner
2
8.30
Restaurant
5
20.80
Trucking/vegetable transporting
7
29.20
TOTAL
63
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
15
Number of Years as Member in the Cooperative
Table 3 presents the number of years the respondents were members in the
cooperative. As found, 19 or 30.16% of the respondents were members for 1 - 5 years,
19.05 for 6 – 10 years, 17.46% for 11 – 15 years, 12.70% for 16 – 20 years, 1.59% for 21
– 25 years, 6.35% for 26 – 30 years, and 12.70% for 31 years and above. This finding
implies that most of the respondents were members in the cooperative for ten years and
below and very few were members for more than twenty years.
Table 3. Number of years as members in the cooperative
NUMBER OF YEARS
FREQUENCY
PERCENTAGE
1 – 5
19
30.16
6 – 10
12
19.05
11 – 15
11
17.46
16 – 20
8
12.70
21 – 25
1
1.59
26 – 30
4
6.35
31 and above
8
12.70
TOTAL
63
100.00
Types of Loan Availed by the Respondents
The types of loan availed by the respondents were agricultural loan, educational
loan, emergency loan, regular loan, and special financing loan as shown in Table 4. The
types of loan mostly availed by the members were the regular loan (55.50%), educational
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
16
loan (42.90%), and agricultural loan (41.30%). The least availed loan was the special
financing loan because this loan can only be availed if there is a project to be financed.
This loan can also be given to non-members. There were also very few members who
availed of the emergency loan because the amount is small compared to the other types of
loan.
Table 4. Types of loan availed by the respondents
TYPES OF LOAN
FREQUENCY*
PERCENTAGE
Agricultural loan
26
41.30
Educational loan
27
42.90
Emergency loan
11
17.50
Regular loan
35
55.50
Special financing loan
4
6.30
* Multiple Response
Number of Times of Each Type of Loan
Was Availed
Table 5 presents the number of times the respondents availed of the same type of
loan for the years 2000 to 2006. The result shows that most of the members availed of
the agricultural loan 5 time and the other respondents borrowed the same type of loan less
than 3 times. For the educational loan, most (33.33%) of them borrowed twice and
majority borrowed less than three times. For the emergency loan, an equal number
borrowed twice and four times with 27.27% each. Only one member borrowed 5 times.
For the regular loan, most of them (31.43%) borrowed once. An equal number of
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
17
members borrowed twice, thrice and five time with 20% each. All the 4 borrowers who
availed of the special financing loan borrowed twice.
Table 5. Number of times the type of loan was availed by the respondents
NUMBER OF TIMES AVAILED
FREQUENCY*
PERCENTAGE
Agricultural loan
1
6
23.08
2
7
26.92
3
1
3.85
4
1
3.85
5
11
42.31
TOTAL
26
100
Educational loan
1
7
25.92
2
9
33.33
3
2
7.41
4
5
18.52
5
4
14.82
TOTAL
27
100
Emergency loan
1
2
18.18
2
3
27.27
3
2
18.18
4
3
27.27
5
1
3.70
TOTAL
11
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
18
Table 5. Continued …
NUMBER OF TIMES AVAILED
FREQUENCY
PERCENTAGE
Regular loan
1
11
31.43
2
7
20.00
3
7
20.00
4
3
8.57
5
7
20.00
TOTAL
35
100
Special financing loan
2
4
100
TOTAL
4
100
Uses of Loan Availed
For agricultural loan, majority of the borrowers used it to finance agricultural
production, a few of them (3 or 11.54%) used it for farm improvement while 26.92% of
the respondents used it to purchase farm tools and equipment. For the educational loan,
majority (88.89%) used it to pay the tuition fee of their children and only 3 or 11.11%
used it for buying school supplies. Majority of the member-borrowers who availed of
emergency loan used it for hospitalization and the others used it to buy consumer goods.
The regular loan was used by 71.43% of the respondents for buying consumer goods
while 14.28% each used the loan for the purchase of farm inputs and for paying the
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
19
tuition fee of their children. The special financing loan was used by all the borrowers to
buy needed things as shown in Table 6.
Table 6. Uses of loans availed by the respondents
USES OF LOAN
FREQUENCY
PERCENTAGE
Agricultural loan
Purchase of farm inputs
7
26.92
Purchase of farm tools and equipment
16
61.54
For farm improvement
3
11.54
TOTAL
26
100
Educational loan
Tuition of children
24
88.89
Buy school projects/requirements
3
11.11
TOTAL
27
100
Emergency loan
Hospitalization
7
63.64
For buying needed things
4
36.36
TOTAL
11
100
Regular loan
For consumption
25
71.43
Purchase of arm inputs
5
14.28
Tuition fee of children
5
14.28
TOTAL
35
100
Special financing loan
For buying things needed
4
100
TOTAL
4
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
20
Sources of Funds for Payment of Loan
Table 7 presents the sources of cash for payments of loan by the member-
borrowers. Most (48.53%) of the borrowers used their salary for paying their loan. There
were 19 or about 28% of the respondents used their income from their business to pay
their loan and 23.53% paid their loans from the sales of their vegetables.
Table 7. Sources of fund for paying loans by the respondents
SOURCES OF FUND
FREQUENCY*
PERCENTAGE
Sales of vegetables produced
16
23.53
Income from business
19
28.00
Salary and wages
33
48.53
* Multiple response
Loan Repayment Practices by the Member-borrowers
Table 8 presents that majority (57.14%) of the respondents paid their loans by
going personally to the cooperative office while 36.51% paid their loans through the
collector and only 6.35 sent their payments through a representative. The finding further
showed that majority (84.13%) paid their loan on installment basis. However, there were
15.87 who paid their loan upon maturity. This implies that majority of the members were
paying their loans on installment basis. Majority of those who paid on installment gave it
on a monthly basis. There were 12.70% who paid on a quarterly basis while 6 or 9.52%
paid their loans on a daily basis.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
21
Table 8. Loan repayment practices of the respondents
PRACTICES
FREQUENCY
PERCENTAGE
How payment was made
Through collector
23
36.51
Paid personally in the office
36
57.14
Through representative
4
6.35
TOTAL
63
100
Mode of Payment
Full payment
10
15.87
Installment
53
84.13
TOTAL
63
100
Interval of Installment Payment
Daily
6
9.52
Monthly
39
61.90
Quarterly
8
12.70
TOTAL
53
100
Benefits Derived from the Loan
Table 9 presents the benefits the respondents derived from the loans they availed
from the cooperative. The benefits derived from the agricultural loan as mentioned by the
respondents were as follows: the value of their farm increased because of the
improvements, their production increased because of the improved farm practices and
improved tools and equipment and farm inputs. For the educational loan, the respondents
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
22
mentioned that they were able to send their children to college, they were able to buy
books and school supplies of their children and were able to buy the schools projects of
their children. The emergency loan benefited them because they were able to pay hospital
bills and buy medicines and many of them were able to buy consumer goods when they
badly needed them. Some said they were able to pay their debts and bills on time thus
they were not penalized. For the regular loan, many of them were benefited from the
house improvement and helped them finance their business. Some were able to have their
appliances and vehicles repaired. One each was able to buy needed appliances, a vehicle,
and land. The special financing loan benefited them because they were able to buy the
things they needed.
Table 9. Benefits derived from the loan
BENEFITS FROM THE LOAN
FREQUENCY
PERCENTAGE
Agricultural loan
Increased value of the farm due to
9
36
improvement introduced
Increased in production
6
24
Improved farm practices
3
12
Improved tools and equipment
7
28
TOTAL
25
100
Educational loan
Send children to college
17
48.57
Buy books and school supplies
11
31.43
Buy school projects of children
7
20.00
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Table 9. Continued ….
Emergency loan
Pay hospital bills and buy medicines
3
15
Buy additional farm supplies
5
25
Buy consumer goods when badly needed
9
45
Pay debts and bills on time
3
15
TOTAL
11
100
Regular loan
Financed their business
19
42.22
Improved their house
20
44.44
Had their appliances, vehicles, tools repaired
3
6.67
Buy needed appliances
1
2.22
Buy land
1
2.22
Buy vehicle
1
2.22
TOTAL
45
100
Special financing loan
Buy the things they needed
4
100
TOTAL
4
100
Causes of Failure on Repayment
Table 10 presents the causes of failure of the respondents to pay their loans.
Nineteen or about 30% mentioned that they had no money at the scheduled of payment.
Fourteen or 21.54% mentioned low price of their product that their sales proceeds was
not even enough to buy their family needs and starting capital and another 6 respondents
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
24
or 9.23% said that their business went bankrupt. There were about 13% who said that
their crops failed due to natural calamity. Eleven respondents or 17% said that their loan
was used for non-productive purpose thus there was no income for paying the loan while
7 or 11% said the money for payment of loan was used for another purpose.
Table 10. Causes of failure on repayment
CAUSES OF FAILURE
FREQUENCY PERCENTAGE
Bankruptcy of the business
6
9.23
Low market price of produce
14
21.54
Crop failure due to calamity
8
12.31
No money at the schedule of payment
19
29.23
Loan was used for nonproductive purpose
11
16.92
Money for payment was used for another purpose
7
10.77
TOTAL
65
100
Problems Encountered
There were 50.79% of the respondents who commented on the procedures in
borrowing. They said that securing collateral and co-makers were just making them delay
in getting their loans. Thirty three percent of the respondents said that their problem in
borrowing was the delayed release of the loan because they have to wait for the
availability of funds while 15.87% mentioned delayed approval of loans.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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Table 11. Problems encountered by the respondents
PROBLEMS
FREQUENCY PERCENTAGE
Delayed release of loans
21
33.33
Difficulty in getting co-maker and collateral
32
50.79
Delayed approval of loan
10
15.87
TOTAL
63
100
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
26
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
This study was conducted to determine the demographic profile of the member-
borrowers of the Progressive Citizen Multipurpose Cooperative, determine the kinds of
loan commonly availed by the member-borrowers, find out how the members used their
loans, determine the benefits that the borrowers get from the loans, and determine the
problems encountered by the member-borrowers on loan repayment.
This study was conducted in January 2007 with 63 member-borrowers from
Progressive Citizen Multipurpose Cooperative as respondents. It was found that majority
of the members were female, with ages between 31 – 50 years old, married, with
household size between 4 – 6 members, had an income range of P 51,000 - 100,000 per
annum and finished post secondary education. Most of them were salaried employees,
either as government employee or private employee and some were farmers and business
owners. Most of them were members in the cooperative for less than ten years.
The type of loan commonly availed by the members was the regular loan
followed by agricultural loan and educational loan. The agricultural loans were used by
the members in financing their farm production, and for the purchase of tools and
equipment as well as for the improvement of their farms. The educational loan was used
merely for the education of their children while the regular loan was used mostly for
basic consumption. The emergency loan was mostly used for payment of hospital bill and
purchase of medicines.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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The members mentioned several benefits derived from the loans they got from the
cooperative. With the loans they availed they had capital for their farm operation and
their business, they were able to send their children to school and buy the needs of their
children, they were able to pay their bills and debts on time from the loan proceeds, they
were able to buy the things the needed and they were able to pay their hospital bill and
buy medicines which they would not have done without the loan. However they also
mentioned some problems they met regarding their loans. Some said their loans were
delayed because of the unavailability of funds. They also met problems in the payment of
their loans because when it was time to pay their loans, they had no money thus they have
to pay a surcharge. Their failure to pay their loans on time were associated with several
factors like low price of their produce, crop failure due to calamity, and bankruptcy of
their business. Some of the factors were due to their own doing like misuse of loans and
using the money for loan payment on another purpose.
Conclusions
Based on the finding of the study, the following conclusions were made:
1. Majority of the members are females, married, finished college education,
salaried employees and receiving an annual salary ranging from P100,000 to
P150,000 per annum.
2. Majority of the member- borrowers availed various loans from the cooperative.
The most common was the regular loan where they used it for their basic
consumption, educational loan where they used it for tuition fee of their children.
The respondents who availed of agricultural loan used it to purchase farm tools
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
28
and equipment while those who availed of the emergency loan used it for
hospitalization and those who borrowed the special financing loan used it for
buying things they needed.
3. The member-borrowers encountered problem in repaying their loans because they
did not use their loan on the intended purpose. Besides, they use the money
intended for paying their loan for other purposes. Some were hard up in paying
their loans due to bankruptcy of their business brought about by natural calamity
and low market price of their crops.
Recommendations
In order to sustain the dynamism of the cooperative, the following
recommendations were formulated:
1. Educational committees should provide proper education about the cooperatives
to the members not to look the cooperative as a source of credit.
2. The cooperative should mandate their credit committee to check if loans were
used for the purpose stated in the loan form that are used as bases for releasing
their loans.
3. Cooperative must be strict in implementing the policies on loan collection to
avoid delay of payment and lacking of the fund for lending and to be ensured on
good circulation of the business.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
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LITERATURE CITED
ABASOLO, P.A., M.A. V. RUIZ, and F.B. BERTAOL. 1996. Cooperatives in the
Philippines. Manila. GIC Enterprises and Co., Inc. Pp. 1-3.
BIASE, L.ML. 1979. Repayment deficiencies of agricultural loans in Buguias, Benguet.
BS Thesis. Benguet State University, La Trinidad, Benguet. P.13.
CAWAON, J.W. 1982. Determination of agricultural credit reguirements of small
farmers in Pugo, La Union. BS Thesis. Benguet State University, La Trinidad,
Benguet. P. 13.
FAJARDO, F.R. 1994. Entreprenuership. 24K Printing Co., Inc. 33 Acebo St., Marulas,
Valenzuela, Metro Manila. P. 94.
GANAWED, D. 1997. Credit and repayment performance of loan borrowers of
Cooperative Bank of Benguet. BS Thesis. Benguet State University, La Trinidad,
Benguet. P. 24.
MACARANAS, M.J. 1991. Manual for Training Cooperative Management Staff.
International Labor Organization Cooperative Entrepreneurs for Rural
Development. Quezon City, Philippines. P.25 .
MACLI-ING, V. A. 2002. Credit operation of the Universal Multipurpose Cooperative.
BS Thesis. BSU, La Trinidad, Benguet. Pp. 1-2.
ONAGAN, L.D., J.T. SIMANGAN and M.S. ESQUERRA. 1973. Cooperative Principles
and Practices. Quezon City: Onagan and Son Publishing Corporation. Pp.43-46.
SACAY, O.J. et al. 1985. Small Farmer’s Credit Dilemma. National Publishing Corp.
Manila, Philippines. P. 2.
TAGANAS, P. 1979. Repayment deficiencies of agricultural loan in Bontoc Mountain
Province. BS Thesis. Benguet State University, La Trinidad, Benguet. P. 22.
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
30
APPENDICES
Appendix A. Letter to the Respondents
College of Agriculture
DEPARTMENT OF AGRICULTURAL ECONOMICS
AND AGRIBUSINESS MANAGEMENT
Benguet State University
La Trinidad, Benguet
January 2007
Dear Respondents;
The undersigned is a fourth year Agribusiness student of Benguet State University, and
currently conducting a research titled “Profile of Member-Borrowers in the Progressive
Citizen Multipurpose Cooperative at Abatan, Buguias, Benguet.”
In this regard, may I humbly request your kind support and cooperation in answering the
attached questionnaire. Your kind assistance will enable me to complete the requirements
on my course. Rest assured that all data gathered will be kept confidential.
I highly appreciate your wholehearted support in this endeavor. Thank you very much
and God bless.
Respectively yours,
DESENIA K. PILAS
Researcher
Noted by:
ANDREW K. DEL-ONG
Adviser
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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Appendix B. Survey Questionnaire
Fill the blanks with the necessary information and check the choices that correspond to
each statement being asked.
A. Respondent’s Profile
Name:
Age:
Sex:
Civil Status:
Household Size:
Household Income per annum:
Sources of Income (please check)
( ) vegetable farming (please indicate if farm if:
___owner-operated
___supply system
___supplier
___operator
( ) salary
___government employee
___private employee
( ) wages for skilled laborers, carpenters, etc.
( ) business
___sari-sari store
___grocery
___stall operator (public market)
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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___restaurant
___trucking/vegetable transporting/hauling
___others (please specify)
Occupation of Spouse:
Highest Educational Attainment (please check)
( ) Elementary
( ) Secondary
( ) Vocational Course (please specify)
( ) College
( ) Post College Degree (please specify)
Number of years of membership in the cooperative (please specify)
Position in the Cooperative (please check)
( ) Board of Director
( ) General Manager
( ) Treasurer
( ) Book Keeper
( ) Member
B. Types of Loan Availed by the Member
From date of membership to the cooperative, please indicate the kinds of loans
you availed, number of times and the amounts you borrowed.
Type of Loan Availed
Number of times
Maximum Amount Granted
Agricultural loan
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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Educational loan
Emergency Loan
Regular Loan
C. Uses of Loans Availed
Loan Type
Uses
a. agricultural loan
( ) purchase of farm tools and equipment
( ) financed farm production (as capital)
( ) farm improvement
( ) others (please specify)__________________________
b. educational loan
( ) tuition fee of children
( ) for school requirements/projects
( ) others (please specify)______________
c. emergency loan
( ) hospitalization
( ) funeral expenses
( ) others (please specify)______________
d. regular loan
( ) consumption
( ) purchase of farm inputs
( ) tuition fee of children
( ) others (please specify)______________
Sources of payment(s) for the loans borrowed
( ) sales from vegetable farming
( ) salary
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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( ) income from business
( ) wages
( ) others (please specify)
How did you pay your loans to the cooperative?
( ) through collector from cooperative
( ) personally went to the cooperative
( ) sent payment through representative (ex: family member)
( ) others (please specify)
Mode of Payment
( ) full payment
( ) installment
( ) others (please specify)
· If installment, what were the terms of payment?
( ) weekly
( ) monthly
( ) quarterly
( ) annually
( ) others (please specify)
D. Benefits Derived from the Loan
1. Agricultural Loan
( ) increased value of the farm due to farm improvement
( ) increased in production
( ) improved farm practices
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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( ) improved tools and equipment
( ) Others (Pls. specify) _______________________________________
2. Educational Loan
( ) able to send children to college
( ) able to buy books and school supplies for my children
( ) able to buy the school projects of my children
( ) others (Pls. specify) __________________________________________
3. Emergency Loan
( ) able to pay hospital bills and buy medicine
( ) able to buy additional farm supplies on time
( ) it helped us to buy consumer goods when badly needed
( ) it helped us pay our debts/ bills on time
( ) others (Pls. specify) ________________________________________
4. Regular Loan
( ) it helped us finance our business
( ) it helped us improve/repair our house
( ) it helped us repair our appliances/vehicles/tools and equipment
( ) able to buy needed appliances
( ) able to buy land
( ) able to buy vehicle
( ) others (Pls. specify) ___________________________________________
E. Causes of Failures on Repayment
( ) bankruptcy of the business
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
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( ) low market price
( ) crop failure due to calamity
( ) no money at the schedule of payment
( ) loan is used for non-productive purpose
( ) money for payment is used for another purpose
( ) others (please specify)
F. What are the problems you encountered in borrowing from your cooperative?
G. What are the problems you encountered in the repayment of your loans?
Profile of Member-Borrowers in the Progressive Citizen Multipurpose Cooperative
at Abatan, Buguias, Benguet / Desenia K. Pilas. 2007
Document Outline
- Profile of Member-Borrowers in theProgressive Citizen Multipurpose Cooperative at Abatan, Buguias, Benguet
- BIBLIOGRAPHY
- ABSTRACT
- TABLE OF CONTENTS
- INTRODUCTION
- REVIEW OF LITERATURE
- METHODOLOGY
- RESULTS AND DISCUSSION
- SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- LITERATURE CITED
- APPENDICES