Philippine E-Journals

Survival, Strategy, And Stigma: A Deep Dive Into The 5-6 Lending

Melojane T. Acierto | Jalil P. Adoma | Ian Joshua R. Buajon | Joemarie L. Mamaril | Marienelle D. Prado | Nimpha Amtalao

Discipline: business and management (non-specific)

 

Abstract:

The "5-6" system and other informal loan schemes are significant to the Philippine economy. In situations where traditional financial institutions are unable to meet needs, they frequently assist. This qualitative research investigates the experiences of 5-6 lenders in Diffun, Quirino, who have been staying for longer years. Detailed interviews with ten lenders were conducted, transcribed and analyzed using an interpretative phenomenological approach to extract themes relevant to the research questions. The qualitative analysis outlines the experience of 5-6 Lenders that we further categorize by (1) “The Business Sense,” or their contextual and intentional nature of lending behaviors; (2) “The Profit Mindset,” with potential lenders focusing on profits; (3) “The business of giving” for compassion-lending, and (4) ultimately as a “Return Of Venture” that includes financial returns as well as community impact. The second cluster presented lending risk inside the informal market, including lack of skills, financial vulnerability, environment, thefts/other factors, physical safety, and personal stress. Instead, what the lender understands is that they perceive themself as benefiting only from the ill fate and wants of others, which to them is inherently corrupt, immoral, and greedy. And then went on to discuss the importance of survival in continuing investment, ways of acquiring clients, actions needed to ensure repayment of loans, and maintaining trust in lenders’ platforms, while constantly being alert to money laundering and scams. However, despite the legal limitations and social prejudices against them, these 5-6 lenders are, in effect, financial shelters for millions of unbanked, making access to essential credit for business purposes - or otherwise - available. Thus, it provides researchers with the opportunity to explore current relationships between borrowers, lenders, and government intervention in creating equitable (and accessible) informal lending markets.