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Assessment of microfinancing for enterprise development program in La Union

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dc.contributor.authorDiza, Marife D.
dc.date.accessioned2026-04-21T06:52:56Z
dc.date.available2026-04-21T06:52:56Z
dc.date.issued2007-03
dc.description.abstractThe valuable contribution of micro financing in economic development calls for a collective effort to support the financing program of the government. This study was therefore conducted specifically to: determine the: economic profile of MSMEs, sources of funds, utilization and the level of sufficiency of credit, importance of microfinancing, effect of credit to income, and, financing problems of MSMEs. Finding revealed that the respondents were relatively young, had 46.47 years average age, predominantly married, mostly women, having an average children of 3, and, mostly Roman Catholic. Majority were high school graduate, founder at the same time manager of their own business enterprises, with 7.64 average years of business experience. As to the enterprise profile, most of the MSMEs had sole proprietorship, majority had not hired personnel, rented market stall and generated an average P16, 020 net income. Despite the presence of formal institutions, the MSMEs preferred loan sharks like "bombay". While the loan was intended for enterprise development and expansion of the business, a part of it was utilized for personal needs of the family such as education and hospitalization. The amount of loan was perceived as moderately adequate for working capital. Microfinancing was perceived as very important to enterprise development especially for production increase. On the average, the capitalization had increased from 16% to 111% or 80% in agricultural enterprises and 25% to 100% or 52% in enterprise dealing with non-agricultural products. Regression analysis showed that loan has a highly significant effect on income. Loan contributes about 73% in the change of income and capital. With the positive effect of loan on income, it is projected that at P500,000 amount of loan there would be P375, 918 worth of income generated and P72,718. Those problems encountered in securing loan from formal financial institutions which were considered as serious were: high services fees and other charges, rigid paper work requirement in formal financial institutions, high equity requirement, difficulty in project proposal preparation and limited available loans. While loan sharks like "Bombay" are readily available source of loan, it should not be the major source of small amount of credit since it demands high interest charges. To enable more MSMEs to be benefited from the financing program, the government especially the central bank shall take a bold action in requiring formal financial institution to be flexible in its financing policies. Likewise, formal financial institutions shall review its financing policies and considerations shall include: the reduction of high service fees and other charges, fast loan processing, minimal paper requirement, flexibility in setting collateral and equity requirements and preparation of pro-forma simple project proposal.
dc.identifier.citationDiza, M. D. (2007). Assessment of microfinancing for enterprise development program in La Union. [Unpublished Undergraduate Thesis]. Don Mariano Marcos Memorial State University - North La Union Campus, Sapilang, Bacnotan, La Union. Lakasa ti Sirib, DMMMSU Institutional Repository.
dc.identifier.urihttps://lakasa.dmmmsu.edu.ph/handle/123456789/1352
dc.language.isoen_US
dc.publisherDon Mariano Marcos Memorial State University - North La Union Campus
dc.sdgSDG 8
dc.titleAssessment of microfinancing for enterprise development program in La Union
dc.typeThesis
dspace.entity.typePublication
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