Ambulant street vendors abound in Tacloban City, Philippines. In this study, we focus on a total of one hundred respondents (mostly women) who sell their wares in the open thoroughfares for basic subsistence. This sector is one of the most disadvantaged segment in the Philippine society who are unable to obtain loans from the Philippine banks due to their lack of tangible assets. This situation often forces them to borrow loans from informal lenders called Bombay 5-6, a group of enterprising Indian nationals who lend money to Filipinos at 20% interest. The Bombay 5-6 offers a loan amount of Php 1,000 – 5, 000 ($22.00 – 111.00) payable within 1-3 months in a daily basis of collection, collected either in the beginning or at the end of the business day. With an average monthly income of Php 1500-2000 ($33.00 – 45.00) these vendors depend on their day-to-day capitalization from this Bombay 5-6. The borrower’s business and loan repayment history are the considerations of the Bombay 5-6 to grant loans to these vendors. In this study we will use purposive sampling and interview questionnaires to find out about the demographics, reason for loan preference and focus on the effects on clients especially with regards to whether loans enhance or worsen their economic conditions. Respondents will be assured of total confidentiality of their answers, and the data will be used solely for this study. The lender common to 10 – 20 street vendor respondents will be interviewed on their practices on default, repayment and collection scheme to triangulate the data collection through a Focused-Group Discussion (FGD). According to Madestam’s Theory, formal and informal credit can be either complements or substitutes in an economy; the objective of this research is to ascertain the possibilities of institutionalizing lending activity that might benefit the vendors, the lenders, and the local economy of Tacloban City.
Rosalita Morillio Dula and Marilou Pelenio Grego
About the Researcher(s)
Rosalita Morillio Dula is as a Social Science Instructor at the Eastern Visayas State University, Philippines. She got her master's degree in Teaching Social Sciences from the University of Eastern Philippines Catarman, N. Samar, Philippines and presently pursuing her doctorate in Educational Administration from Northwest Samar State University Calbayog City, Philippines. She has held membership from various professional organizations like Asian Qualitative Research Association (AQRA), Philippine Association of Campus Student Adviser (PACSA), Eastern Visayas State University Faculty Association (EVSUFA), and Philippine Academy of Professionals in Business Education (PAPBE). Her research interest revolves around migrants, micro-entrepreneurs and informal loan practices in the Philippines.
Marilou Pelenio Grego is an Economics and Social Sciences instructor at the Eastern Visayas State University, Tacloban City, Philippines. She has a bachelor's degree of arts major in Economics from the Eastern Visayas State University, Tacloban City. She earned her Masters of Science in Economics (major in Economic Development) from the University of Eastern Philippines, Catarman, Northern Samar, Philippines.
She is also an Adviser of the AB – Economics graduating students at the Eastern Visayas State University since 2012 up to present. She serves as enumerators in some regional research projects in Eastern Visayas. Some of her affiliations include the following; Associate Member of the Council of Economics Educators, INC. in Region VIII, Philippines, Incorporator and a Corporate Secretary of the Strategic Research and Policy Study Group Inc. Tacloban City, Philippines, Associate Member of the Council of Deans and Educators in Business – Region 8, Eastern Visayas Chapter. She is presently recognized as a Professional in Business Education (PBE) by the Philippine Academy of Professionals in Business Education (PAPBE).
Read Dula and Grego's Final Report here