Debt management practices of small-scale enterprises in Binangonan, Rizal calendar year 2016

Thesis BSA University of Rizal System, Binangonan 2017

includes bibliographical references

This study aimed to evaluate the Debt Management Practices of Small-Scale Enterprises in Binangonan, Rizal. The researchers chose to use descriptive method of research, which is usually the best method for collecting information. Small-scale enterprises engaged in manufacturing, merchandising and servicing industries served as the subject of the study. For a total of 25 small-scale enterprises in Binangonan, Rizal, the researchers came up to a sample of 15. Major instrument used were self-made questionnaire. The data collected were analyzed and interpreted using rank, frequency and percentage distribution, weighted mean and one way analysis of variance. In determining the perception of the respondents, the researchers used the following profile: age, sex, civil status, educational attainment, field of specialization and position in the company. Business profile in terms of Years of existence, nature of business, number of employees, amount of assets and sources of capital and the parameters used were loan repayment period and interest rate. The respondents of the small-scale enterprises in Binangonan, Rizal who have knowledge in the financing and managing decisions of the firm are mostly female young adults, married, college graduate and specialized in the field of management which also positioned as supervisor in the company. Business profile in terms of Years of existence, small scale enterprises in Binangonan, Rizal are seasoned players engaged in manufacturing, having large number of employees. Regarding the general weighted mean of the parameters in terms of loan repayment period, the creation of debt management plan has ranked first in the perception of the respondents regarding debt management practices with a verbal interpretation of always while providing appropriate amount of risk free assets and liquidity at key maturities has the least rank with verbal interpretation of often. In terms of interest rate, the consideration of interest rate in entering structured debt settlements has ranked first in the perception of the respondents regarding debt management practices with a verbal interpretation of always while the paying the accounts with the highest interest first has the least rank with verbal interpretation of often. In general, the findings of the study showed that there is no significant difference on the respondents' profile and their perception on debt management practices of small-scale enterprises, except in terms of position in the company. The decision about the finances can be significantly affected by position in the company because they can see the financial status and structure of their company differently from other employees in different positions. Also, there is no significant difference on the respondents' business profile and their perception on debt management practices of small-scale enterprises, except in terms of number of employees and amount of assets. The decision about the finances can be significantly affected by number of employees employed in the company because the salary and other benefits that were required by the company to be provided can be additional expenses, thus, can lower the income of the company. The decision about the finances of the company can be significantly affected by amount of assets that the company had because their resources can be used in their operations, thus, can be used in paying principal amount and interest for their loans. As a result of the study, the researchers recommended that the small-scale enterprises should continue to apply their established practices in managing debt. This was evident in the ANNOVA results obtained in this paper. The company can continue to apply for loans as additional funds to their company. The researchers also recommended that a similar study may be conducted to microenterprises which maybe suffering from financing difficulties.