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Financial Inclusion of Lending Institutions on Sustainability of Micro-Businesses



Gelyne E. Estrellado, 2024. Financial Inclusion of Lending Institutions on Sustainability of Micro-Businesses. United International Journal for Research & Technology (UIJRT). 5(7), pp01-17.


This study determined the financial inclusion of lending institutions on the sustainability of micro-businesses in Sorsogon City for the fiscal year 2024. This study determined the nature of micro-business owners along years in operation, initial capital, amount of loan availed from lending institutions, and daily average sales. Moreover, the study identified and ranked the financial inclusion strategies along with access of loans, streamlining of cash flow, profit and savings, repayment of loans, and financial literacy education. Moreover, this study identified and ranked the problems encountered by micro-business owners towards financial inclusion.
The quantitative descriptive method of research was used in this study. The respondents comprised 15 micro-business owners randomly selected. A survey questionnaire was used to gather the needed data. The data were analyzed and interpreted using appropriate statistical measures such as frequency counting, percentage, rank, and sum of ranks.
The findings revealed that the micro-business owners patronize the same lending institutions that operate in the city and the two leading respondent’s choices are Bless Microfinance Corporation and ASA Philippines Foundation. The majority of the respondents had been in business for 5 years or less with PhP20,000 as start-up capital, availed an initial amount of PhP15,000 from the lending institutions, and mostly had a daily average sale of PhP2,500 or below. It is also revealed that the common strategies attune to the promotion of financial inclusion of lending institutions with the micro-businesses include fewer loan requirements, permitting the borrowers to utilize the loaned amount as a start-up or capital addition, allowing the borrowers to choose the mode of payment, and the provision of financial literacy education. The respondents encountered problems in financial inclusion consisting of borrowers’ overlapping loans, high loan penalties, and the borrower’s inability to cope with the provided literacy topics.
Proposing a strategic intervention on financial inclusion is needed for sustainable micro-business operations, specifically, credit information sharing and monitoring systems for micro-business owners, need-based financial education and counseling activities, and improving access to credit. These strategies will enrich the knowledge of good financial management and improve the business’s financial position for the sustainability and success of micro-businesses.

Keywords: Financial Inclusion, Micro-business owners, Credit Information Sharing and Monitoring Systems, Need-Based Financial Education and Counseling Activities, Improving Access to Credit

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