Perceived Impact of Microfinance Services on Borrowers

Arran Joyce  B. Rojero,

Perceived Impact of Microfinance Services on Borrowers

Discipline: business and management (non-specific)

Abstract:

This study focused on determining the perceived impact of microfinance services on selected borrowers in Northern Samar, particularly in terms of socio-economic welfare, income, standard of living, and poverty alleviation. Utilizing a descriptive-quantitative research design, the study surveyed 383 borrowers from two microfinance institutions in Northern Samar. Data were gathered using a validated survey questionnaire and statistically analyzed using weighted means. The results showed that microfinance services have a high overall perceived impact. Notably, both socio-economic welfare and standard of living revealed substantial improvements in children’s education, access to basic needs, transportation, sanitation, and electricity. Poverty alleviation had the highest impact across all indicators, underscoring the role of microfinance in increasing productivity and reducing vulnerability to poverty. The income received had a high impact, indicating enhanced purchasing power and household financial contribution, albeit with a relatively lesser direct effect on income growth. The results highlight the critical role these services play in improving living conditions in Northern Samar. These insights may serve as a valuable starting point for future research that incorporates inferential methods and additional indicators to guide program development and policymaking, thereby better supporting long-term socio-economic progress.

References:

Aboagye, J., & Anong, S. (2020). Provider and consumer perceptions on mobile money and microfinance integrations in Ghana: A financial inclusion approach. International Journal of Business and Economics Research, 9(4), 270–281. https://doi.org/10.11648/j.ijber.20200904.24
Alam, P., & Azad, I. (2021). Impact of microfinance on income and employment of women in Jigjiga, Ethiopia. International Journal of Economics and Business Administration, 9(1), 373–381. https://doi.org/10.35808/ijeba/679
Bangko Sentral ng Pilipinas (2022). Microfinance program overview. Retrieved from https://www.bsp.gov.ph
Billah, A., Islam, S., Ahmmed, M., Nobi, N., Hoque, M., S., & Mannan, A. (2023). The impact of microfinance on rural people’s basic needs and standard of living: Empirical evidence from Bangladesh. The Seybold Report, 18(1), 472–486. http://dx.doi.org/10.17605/OSF.IO/RYQ76
Chikwira, C., Vengesai, E., & Mandude, P. (2022). The impact of microfinance institutions on poverty alleviation. Journal of Risk and Financial Management, 15(9), 393. https://doi.org/10.3390/jrfm15090393
Iqbal, A. (2024). The impact of microfinance on living standard of households: Evidence from districts Zhob & Sherani. KASBIT Business Journal, 17(1). https://kasbitoric.com/index.php/kbj/article/view/385
Makara, M., Faimau, G., & Maphosa, F. (2024). Microfinance and poverty alleviation: The socio-economic contribution of SILC, a Savings-Led Microfinance Programme in Semonkong, Lesotho. Journal of Asian and African Studies. https://doi.org/10.1177/00219096241300433
Mendoza, C., Nuñez, L., & Villanueva, M. (2023). Microfinance and household economic growth: A study in Negros Occidental. Philippine Journal of Economic Development, 22(1), 89–105.
Olusegun, J. (2024). The role of microfinance in promoting financial inclusion. ResearchGate. https://tinyurl.com/2bcbxnby
Rivera, M., Santos, L., & Dela Peña, R. (2023). Microfinance as a tool for economic empowerment in Western Visayas. Philippine Journal of Development Studies, 24(1), 102–118.
Ullah, S., Yaseen, M. R., & Javed, M. A. (2024). Role of microfinance in entrepreneurial development in low-income areas. Studies in Business and Economics, 19(1), 168–180. https://doi.org/10.2478/sbe-2024-0013