Perception of Vendors on Informal Lending Institutions

Informal lending is one of the Philippines ' most common sources of funding for households. The study described the perception of vendors towards informal lending in terms of cost, discretion, patience, humanity or sympathy, and reliability. Survey questionnaire was used in the study. The researcher used likert-scale type questionnaire and analyzed it through statistical data treatment such as mean and weighted mean.The findings of the study are as follows: in terms of cost, informal lending adds investment to business; in terms of discretion, informal lending greatly helps the business; in terms of patience, payment usually is given on the agreed date; in terms of sympathy or humanity, apology seems to be effective in not meeting the agreed date; and in terms of reliability, the ease of access to informal lending. Keywords— Informal Lending, Perception, Cost, Patience, Sympathy or Humanity, Discretion, Business, Reliability.


INTRODUCTION
Informal lending is one of the Philippines ' most common sources of funding for households. In relation, Fuwa et al. (2015) stated that formal financial institutions are largely underdeveloped within developing economies and, as a result, informal lending serves as a significant medium for credit access. Mansuri (2007) further stated that informal lenders with market or capital exposure frequently find it attractive to assign loan provision to downstream lenders with a knowledge or compliance advantage when dealing with individual borrowers. Zapata (2006) concluded that less trained, married and/or large-scale households are more likely to borrow from informal lenders. Ferrer (2017) enumerated that certain causes included diminished spouses ' ability to earn family income, poor home wealth and significant mortgage debt, inadequate ability to manage money and financial planning, and high incidence of illicit use of credit. Dula and Grego (2017) concluded that although the characteristic of their company is informal, the supply of goods and services on the market and the local economy complements consumer activities.It is also important to understand as concluded by Floro (2017) the personal relationship between lenders and borrowers because it also has an influence on other markets, in addition to its effect on the credit transaction. Further, Römer (2017) found that results indicate that treatment group loan borrowers reported lower income, an impact more pronounced in the lowest percentile of income. In Philippine rice-growing towns, rice merchants and farmer borrowers dominate the informal credit market as stated by Nagarajan et al. (1995).Thus, Briones (2007) concluded that informal lending reflects that borrowing responses should be a major concern in the implementation of finance cost recovery policies.

II.
CONCEPTUAL FRAMEWORK This research will be based on the study of Catherine Cross, Community Service Training Programme, University of Natal entitled on "Decision factors involved from a clear pattern. It is mentioned that community seems to evaluate potential lenders on five criteria which is cost, discretion, patience, sympathy or humanity, and reliability." These factors will be the consideration to this study. This research will help lending institution especially to the vendors of Cabanatuan City to determine the proper comprehension of informal lending and the problems to be encountered in solving using the factors. In this study they will know the advantages of borrowing in lending institution, and how it helps them.

III. OBJECTIVE OF THE STUDY
The study describedthe perception of vendors on informal lending institutions be described in terms of: cost, discretion, patience, sympathy or humanity, and reliability.

IV. METHODOLOGY
The study used descriptive method as it describes the present condition. The main objective of the study is to explore the causes of particular phenomenon. It further concern with the condition or relationship that exists; practices that prevail; and beliefs and processes that are going on; effects that being felt or trends that are developing. (Cohen, Manion, Morrison, 2002) The researcher used likert-scale type questionnaire (Vagias, 2006) and analyzed it through statistical data treatment such as mean and weighted mean.

V.
RESULTS Table 1 showed that in terms of cost, the statement, "Informal lending has a great impact on my business because it adds to my investment" has the highest weighted mean with 3.65 and interpreted as "Strongly Agree."  Table 2 showed that in terms of discretion,the statement, "I borrowed money from informallending becauseit greatly helps my business," which has the highest weighted mean with 3.33 and interpreted as "Agree."  Table 3 showed that in terms of Patience, the statement, "I pay on the agreed date of payment" which has the highest weighted mean with 3.43 and interpreted as "Strongly Agree."  Table 4 showed that in terms of Sympathy or Humanity, the statement, "I apologize whenever I cannot pay for our agreed date of payment." which has the highest weighted mean with 3.36 and interpreted as "Strongly Agree."  Table 5 showed that in terms of Reliability, the statement, "It is easy to borrow money from informal lending without formal requirements" which has the highest weighted mean with 3.41and interpreted as "Agreed." Table 5. Perception about Reliability

ITEMS WM VI
In times of emergency, Informal lending is very reliable.
3.34 Strongly Agree Informal lending helps the people without enough credentials to loan money.

Strongly Agree
It is easy to borrow money from informal lending without formal requirements.

Strongly Agree
In terms of business matters, informal lending is realiable.

Agree
Average Weighted Mean 3.33 Agree

VI. CONCLUSION AND DISCUSSION
Generally, the respondents were satisfied with the aim of informal lending institution but they still need to gain more knowledge about this institution. The findings of the study are as follows: in terms of cost, informal lending adds investment to business; in terms of discretion, informal lending greatly helps the business; in terms of patience, payment usually is given on the agreed date; in terms of sympathy or humanity, apology seems to be effective in not meeting the agreed date; and in terms of reliability, the ease of access to informal lending.