This study explored the experiences of micro-entrepreneurs in sourcing capital for business operations from Bombay money lenders in Catanduanes. Specifically, the study sought to determine the following: profile of micro-entrepreneurs in Catanduanes as to nature of business, amount loaned, frequency of borrowing in a year, number of years in operation, average sales per day, and average expenses per day; the experiences of microentrepreneurs in sourcing capital for business operations from Bombay money lenders along access to credit, net proceeds, uses of loan proceeds, loan amortization, and sustainability of business operations; and the socioeconomic impact to the micro-entrepreneurs in sourcing capital for business operations from Bombay money lenders. The study employed a descriptive method of research with interview schedule as the data gathering tool. It covered 110 registered micro-entrepreneurs from the 11 municipalities in Catanduanes. Quota sampling was used in determining the sample size with 10 respondents from each municipality. The findings of the study revealed that majority of the micro-entrepreneurs sourced their capital from Bombay money lenders once every month in the amount of PhP 10,000 in meat vending, vegetable vending, and sari-sari items vending which they had been engaged for more than six years whose average daily sales per day is PhP 5,000 and average daily expenses per day of PhP 500. Most of the micro-entrepreneurs revealed favorable experiences along five aspects: access to credit, net proceeds, uses of loan proceeds, loan amortization, and sustainability of business operations. On access to credit, they are oriented about Bombay lending rules, on the credit/background investigation conducted by Bombay money lenders, on the release of loan within a few hours, and on the requirement of collateral/guarantor. On net proceeds, their favorable experience is on the agreed mode of payment of the loan. On the uses of loan proceeds, the favorable experience is in using 100% of proceeds for business use. On loan amortization, the favorable experience is on paying the principal and interest gradually on a daily basis through periodic payment and through sinking fund. On sustainability of business operations, favorable experiences are on continued operation because of available source of capital, on interest rates which can be overtaken by the rate of profit margin of the business, on the notion that they are given good offers by suppliers because they have enough capital, and on faster business cycle, growth trend in sales, and increase in cash surplus. On the socio-economic impact of borrowing money from Bombay money lenders to the micro-entrepreneurs, there was an improvement in their socio-economic standing in sourcing capital from Bombay money lenders for business operations. This is on the account that they were able to save part of the profit they earned for personal and business purposes, and their access to amenities in life have improved like health, sanitation, education, and water supply. Recommendations offered include: the micro-entrepreneurs may be given orientation on how to access credit from government lending institutions like Land Bank of the Philippines (LBP) and from other registered lending institutions, and other micro-finance institutions are encouraged to disseminate their lending programs to micro-entrepreneurs as in the case of ARDCI and PLDC; the micro-entrepreneurs be provided some assistance to know the effects of high interest rates on the operations and profitability of business venture to be spearheaded by the Catanduanes State University through the College of Business and Accountancy through an extension program; and for National Line Agencies whose mandate is to assist micro-entrepreneurs to review their financial assistance program with the end in view of harmonizing the program to the situation of these micro-entrepreneurs. Topics for future research were likewise suggested.
Volume 12 | 08-Special Issue
Pages: 1227-1232
DOI: 10.5373/JARDCS/V12SP8/20202642