Proponent/Claimant
Rosalita M. Dula
Abstract
This study examines the socio-economic and business profile of ambulant vendors, determinants of their loan preferences, and the occurring loan negotiation practices between vendors and the Bombay 5-6 lenders. Likewise, it examines the effects of Bombay 5-6 informal money lending on household and business practices of the ambulant vendors. A quantitative descriptive research design was used in this study. Identification of qualified respondents was done using a purposive sampling technique. The results show that Bombay 5-6 lending has certain features that attract ambulant vendors. Among the topmost features are the exclusion of collateral and documents as loan requirements. The highest significant effect on the household can be observed in the relations between the purpose of the loan (such as for educational support) and default in payment (leading to depression and anxiety). At the same time, the purpose of the loan has a remarkable impact on both the increase in sales and profitability of business. The study concludes that money borrowing plays a vital role in the household and business operation of ambulant vendors. Thus, vendors are compelled to engage in a cyclical activity of money borrowing.
Name of Research Journal
International for Money, Technology, and Financial Inclusion
Date/Year of Publication
2017
Citation
Dula, R. M., & Grego, M. P. (2017). Informal Loan Trap: Bombay 5-6 and its Effect on Micro-Entrepreneurs in Tacloban City, Philippines. IMTFI Final Report.
