How do lending relationships affect loan approvals in thrift and rural banks engaged in microlending in the Philippines?

• Main Authors: Isla, Enrico, Mirano, Angel Dianne, Que, Anne Matrix, Torio, Jacob
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Microfinance > Philippines; Financial institutions > Philippines; Loans > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18334
• Institution: De La Salle University

The purpose of this study is to determine the effects of borrower, loan, and business characteristics to the loan approval in the microfinance institutions (MFIs). Also, to know which of these characteristics would yield a higher probability of approval. The study used binary data obtained from conducting a simulation to loan officers and bank managers. The researchers used probit model to measure the probability of a loan getting approved. The results of the study showed that the borrower characteristic is the only variable that has an effect on approval of loans, specifically those individuals who have salaries and wages and a college graduate.