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Systematically comparison of two lending companies: Differences and similarities in terms
of their respective market environment and surviving strategies
Introduction
In the world of business today, microfinance has been a prominent activity and has
flourished through time in the Philippines because of the country’s economic condition. In turn,
more people resort to the said activity people who accumulate emergency expenses, paying bills,
and starting a small business. There are a number of explanations for the limited development of the
Philippine capital market, one of which is the lack of government support for secondary trading that
resulted to hindrance of growth of capital market. The result of the stunted development of security
markets in the Philippines has been a predominance of loan financing of business activities and, as a
consequence, very high debt/equity ratios (Sachs and Collins, 1989).
The incidence of poverty, measured in terms of the percentage of households unable to
attain a minimum standard of living, has declined from 49.3 percent of the total population in 1985
to 36.8 percent in 1997, and increased slightly to 37.5 per cent in 1998 as a result of the Asian
financial crisis. Poverty alleviation efforts in these areas, particularly in Mindanao, have been
hampered by armed conflict between the government and rebel groups (Congressional Planning and
Budget Department, House of Representative, 2003).
Understanding this concern, numerous banks and other such establishments and institutions
offer loaning services. After several studies on customers, production and technology, it has come to
notice that firms place emphases on the strategic orientation since organizations should
intermittently strategize because of the intensity of the business environment as an aftereffect of
the complexities in the commercial center; (Miles & Snow, 1978; Morgan & Strong, 2003; Ogbari et
al., 2016).
Rationale
The poverty incidence and income inequality in the Philippines rates among the highest in
Asia. Microenterprises are the dominant source of employment and income for the majority of the
population. This case study examines the Pantukan Chess Club Cooperative (PCCC) and Center for
Agriculture and Rural Development (CARD), Inc. with downstream financial intermediaries as a
successful strategy for improving the flow of financial services in rural Philippines. Structured
questionnaire was designed to facilitate the acquisition of relevant data which was used for analysis.
The study revealed that significant numbers of small and medium enterprises are benefitted from
loan even though only few of them were capable enough to secure the required amount needed.
Pantukan Chess Club Cooperative (PCCC)
PCCC is a cooperative that provides products and services. It includes micro-finance loan and
soon involve in macro-finance. It is a world-class cooperative sustained by empowered members
promoting quality of life in the community. In the year 1992, it was registered as a multi-purpose
cooperative to the Cooperative Development Authority(CDA). PCCC try to reach members good
financial habits, encouraging members to save money as well as borrow responsibly because PCCC is
here to help achieve financial goals.
Center for Agriculture and Rural Development (CARD), Inc.
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CARD MRI is a world-class leader in microfinance and a community-based social development
undertaking that improves the quality of life of socially and economically challenged women and
families towards nation building. CARD is known for its core values called simplicity.
Evaluation Strategy
CARD, Inc.
PCCC
Market Environment
Delivers microfinance and financial
services, microinsurance, and marketing,
livelihood, health, environmental,
agricultural, educational and other
community development programs.
Owned by stakeholders
Owned by its members
A profit or non-profit
Non-profit
Usually run by businesspeople
Operated by its members
Provides products or services to the
general public and for public
consumption, making operation on a
small to medium or large-scale basis
Smaller scale with the intention of
providing needs and services to its
members.
In terms of collecting and releasing loan
payments they manage time like in
morning as collecting and releasing in
the afternoon
In due time, they collect payments
Collect payments in one station or unit
House to house strategy
Every quarter all Center Chief’s in one
unit gather together to meet with the
Area manager, Unit Managers, and
Account Officers.
Quarterly meeting together with other
branch manager to submit reports and
discuss stations status.
Marketing/Advertising Activities
Manual mapping of the prospective area
to conduct orientation and discuss CARD
involving activities
Invite other linkages agency to conduct
trainings and seminars
Weekly meetings to its existing members
Involve in income generating activities
such as commercial buildings,
pharmaceutical, ATM etc.
Create website to promote company
reputation and expose company
achievements
Uses social media as a medium to
advertise its products and services.
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Organizational Structure
Figure 1. Pantukan Chess Club Cooperative Main Office Organizational Chart
Figure 2. Center for Agriculture and Rural Development (CARD), Inc.
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Focal points
Microfinance projects have reduced the poverty of rural poor households and improved the
socioeconomic status of women in developing member countries. Microfinance, or the provision of
financial services such as loans to poor families, is recognized as a potent method of directly
improving the lives of those most in need. When managed correctly, these small loans can be used
to build small businesses and develop other income-generating activities that have a long-lasting
impact.
Conclusion and Recommendations
Basically, in order to start a business, even if it is small-scale, one has to have a capital to pay
for the initial expenses. With this, most budding entrepreneurs resort to borrowing money from
capable institutions when they are able to meet the appropriate requirements. From this findings, it
was concluded that majority of the small and medium scale enterprises agreed that loans from
money lending institutions helped in the overall improvement of their performance. In this research,
it was shown that the prevailing lending companies arise in our country and increasing members
cannot be denied. More and more people involve in this kind of activities to stabilize the status of
their families. Thus, the rate of people saving money also increases and many people encourage
saving more money than spending. And the collection process makes it much easier and much more
convenient for the situation of the business owners and its members.
Based on the findings, the following recommendations have been proposed by the researchers
As business expands, it’s time to increase productivity by promoting recordkeeping with a
software packages that allows accurate maintaining of documents and quick access.
Customer feedback is important so boost customer service by meeting the need of the
clients. Utilize social media, optimize customer service, create online help desk to resolve
client problems quickly.
Stay connected with everyone. Set up a remote phone number where clients can reach
personnel after working hours.
Conduct regular trainings and seminars to enhance knowledge to promote competence and
unity in each member.
It is recommended that guarantors are interviewed on their source of income and the
relationship with the borrow.
References:
Advani, A. (1997). Industrial Clusters: A Support System for Small and Medium - Sized Enterprises,
Private Sector Development, World Bank Occasional Paper No. 32, World Bank; Washington, DC.
Dr. Isaac Owusu - Dankwa & Allotey Nancy Adoley, (2014). The Impact of Money Lending Institutions
on Small and Medium Enterprises: A Case Study of Shalom Lending Enterprise, Volume 14 Issue 5
Version 1.0 Year 2014, Global Journals Inc. (USA)
gvw-admin (2014). Use Technology Wisely To Grow Your Small Business. Retrieved from
https://greatvirtualworks.com/business/use-technology-wisely-grow-small-business/
Gibson, T. and van der Vaart, H.J. (2008). Defining SMEs: A Less Imperfect Way of Defining Small and
Medium Enterprises in Developing Countries. Retrieved from
www.brookings.edu/research/papers/2008/09/development-gibson
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Bob Finlayson (2007). CASE STUDIES ON Private Sector Development and Operations, Asian
Development Bank (ADB).
Quiñones, B. Jr. and Seibel, H.D. (2000) Social Capital in Microfinance, Montgomery
Center for Agriculture and Rural Development (2004) Client Empowerment Our Mission, Our
Commitment, Annual Report.
Congressional Planning and Budget Department, House of Representative (2003) Poverty Situation in
the Philippines, Policy Advisory (10).

Unformatted Attachment Preview

Systematically comparison of two lending companies: Differences and similarities in terms of their respective market environment and surviving strategies Introduction In the world of business today, microfinance has been a prominent activity and has flourished through time in the Philippines because of the country’s economic condition. In turn, more people resort to the said activity people who accumulate emergency expenses, paying bills, and starting a small business. There are a number of explanations for the limited development of the Philippine capital market, one of which is the lack of government support for secondary trading that resulted to hindrance of growth of capital market. The result of the stunted development of security markets in the Philippines has been a predominance of loan financing of business activities and, as a consequence, very high debt/equity ratios (Sachs and Collins, 1989). The incidence of poverty, measured in terms of the percentage of households unable to attain a minimum standard of living, has declined from 49.3 percent of the total population in 1985 to 36.8 percent in 1997, and increased slightly to 37.5 per cent in 1998 as a result of the Asian financial crisis. Poverty alleviation efforts in these areas, particularly in Mindanao, have been hampered by armed conflict between the government and rebel groups (Congressional Planning and Budget Department, House of Representative, 2003). Understanding this concern, numerous banks and other such establishments and institutions offer loaning services. After several studies on customers, production and technology, it has come to notice that firms place emphases on the strategic orientation since organizations should intermittently strategize because of the intensity of the business environment as an aftereffect of the complexities in the commercial center; (Miles & Snow, 1978; Morgan & Strong, 2003; Ogbari et al., 2016). Rationale The poverty incidence and income inequality in the Philippines rates among the highest in Asia. Microenterprises are the dominant source of employment and income for the majority of the population. This case study examines the Pantukan Chess Club Cooperative (PCCC) and Center for Agriculture and Rural Development (CARD), Inc. with downstream financial intermediaries as a successful strategy for improving the flow of financial services in rural Philippines. Structured questionnaire was designed to facilitate the acquisition of relevant data which was used for analysis. The study revealed that significant numbers of small and medium enterprises are benefitted from loan even though only few of them were capable enough to secure the required amount needed. Pantukan Chess Club Cooperative (PCCC) PCCC is a cooperative that provides products and services. It includes micro-finance loan and soon involve in macro-finance. It is a world-class cooperative sustained by empowered members promoting quality of life in the community. In the year 1992, it was registered as a multi-purpose cooperative to the Cooperative Development Authority(CDA). PCCC try to reach members good financial habits, encouraging members to save money as well as borrow responsibly because PCCC is here to help achieve financial goals. Center for Agriculture and Rural Development (CARD), Inc. CARD MRI is a world-class leader in microfinance and a community-based social development undertaking that improves the quality of life of socially and economically challenged women and families towards nation building. CARD is known for its core values called simplicity. Evaluation Strategy CARD, Inc. Market Environment • Delivers microfinance and financial services, microinsurance, and marketing, livelihood, health, environmental, agricultural, educational and other community development programs. • • • • • • • Owned by stakeholders A profit or non-profit Usually run by businesspeople Provides products or services to the general public and for public consumption, making operation on a small to medium or large-scale basis In terms of collecting and releasing loan payments they manage time like in morning as collecting and releasing in the afternoon Collect payments in one station or unit Every quarter all Center Chief’s in one unit gather together to meet with the Area manager, Unit Managers, and Account Officers. Marketing/Advertising Activities • Manual mapping of the prospective area to conduct orientation and discuss CARD involving activities • Weekly meetings to its existing members • Create website to promote company reputation and expose company achievements PCCC • • • • Owned by its members Non-profit Operated by its members Smaller scale with the intention of providing needs and services to its members. • In due time, they collect payments • • House to house strategy Quarterly meeting together with other branch manager to submit reports and discuss stations status. • Invite other linkages agency to conduct trainings and seminars • Involve in income generating activities such as commercial buildings, pharmaceutical, ATM etc. Uses social media as a medium to advertise its products and services. • Organizational Structure Figure 1. Pantukan Chess Club Cooperative Main Office Organizational Chart Figure 2. Center for Agriculture and Rural Development (CARD), Inc. Focal points Microfinance projects have reduced the poverty of rural poor households and improved the socioeconomic status of women in developing member countries. Microfinance, or the provision of financial services such as loans to poor families, is recognized as a potent method of directly improving the lives of those most in need. When managed correctly, these small loans can be used to build small businesses and develop other income-generating activities that have a long-lasting impact. Conclusion and Recommendations Basically, in order to start a business, even if it is small-scale, one has to have a capital to pay for the initial expenses. With this, most budding entrepreneurs resort to borrowing money from capable institutions when they are able to meet the appropriate requirements. From this findings, it was concluded that majority of the small and medium scale enterprises agreed that loans from money lending institutions helped in the overall improvement of their performance. In this research, it was shown that the prevailing lending companies arise in our country and increasing members cannot be denied. More and more people involve in this kind of activities to stabilize the status of their families. Thus, the rate of people saving money also increases and many people encourage saving more money than spending. And the collection process makes it much easier and much more convenient for the situation of the business owners and its members. Based on the findings, the following recommendations have been proposed by the researchers • As business expands, it’s time to increase productivity by promoting recordkeeping with a software packages that allows accurate maintaining of documents and quick access. • Customer feedback is important so boost customer service by meeting the need of the clients. Utilize social media, optimize customer service, create online help desk to resolve client problems quickly. • Stay connected with everyone. Set up a remote phone number where clients can reach personnel after working hours. • Conduct regular trainings and seminars to enhance knowledge to promote competence and unity in each member. • It is recommended that guarantors are interviewed on their source of income and the relationship with the borrow. References: Advani, A. (1997). Industrial Clusters: A Support System for Small and Medium - Sized Enterprises, Private Sector Development, World Bank Occasional Paper No. 32, World Bank; Washington, DC. Dr. Isaac Owusu - Dankwa & Allotey Nancy Adoley, (2014). The Impact of Money Lending Institutions on Small and Medium Enterprises: A Case Study of Shalom Lending Enterprise, Volume 14 Issue 5 Version 1.0 Year 2014, Global Journals Inc. (USA) gvw-admin (2014). Use Technology Wisely To Grow Your Small Business. Retrieved from https://greatvirtualworks.com/business/use-technology-wisely-grow-small-business/ Gibson, T. and van der Vaart, H.J. (2008). Defining SMEs: A Less Imperfect Way of Defining Small and Medium Enterprises in Developing Countries. Retrieved from www.brookings.edu/research/papers/2008/09/development-gibson Bob Finlayson (2007). CASE STUDIES ON Private Sector Development and Operations, Asian Development Bank (ADB). Quiñones, B. Jr. and Seibel, H.D. (2000) Social Capital in Microfinance, Montgomery Center for Agriculture and Rural Development (2004) Client Empowerment – Our Mission, Our Commitment, Annual Report. Congressional Planning and Budget Department, House of Representative (2003) Poverty Situation in the Philippines, Policy Advisory (10). Name: Description: ...
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