Holy Angel University
College of Business and Accountancy

A Study to Explore the Micro-entrepreneurs’ Perspective on the Effectiveness of Borrowing Money from Informal Money Lending Business in Angeles City

SUBMITTED BY:
A-433
Lleva, Rhindel
Medina, Leda Marie
Pineda, Reezalyn
Pinero, Bianca Camille
Romero, Czarina
Salas, Jenny Rose
SUBMITTED TO:
Dr. Albert Morales
September 9, 2015
CHAPTER I
INTRODUCTION
During these rough times, people would really bite the bullet in order for them to satisfy the needs of their families, to fund and support their small businesses and to ease poverty just to survive the daily life. This leads people to seek the help of those engaged in money lending business.
Informal credit markets are still important in developing countries. Despite an increase in supply of formal credit, informal lenders remain the dominant source of credit for the people who wish to start-up a small business in their community.
This study aims to explore the perspective of micro-entrepreneurs in Angeles City on the effectiveness of informal money lending business. Informal money lending businesses are money lenders who are not licensed to do money lending business. They are well known about this kind of informal lending business which is patronized by some micro-entrepreneurs and people who wants to put-up a new business. They are also called “5-6 money lenders”. 5-6” is the term used in such a reason that they lend money with 20% interest which will be paid within a month or upon the agreed condition.
Micro-entrepreneurs are the most patronizing party in this form of business because they are the ones who are in needs of financial capital for the daily financing activities of their businesses. In order for us to understand and get the idea on why do micro-entrepreneurs prefer to borrow more from informal than to other formal institutions, the researchers