A study on the determinants of financial exclusion among Pasay City households covering the period 2011 using CBMS data

• Main Authors: Abrahan, Marc Franklin, Juayong, Jonathan, Mendoza, Juan Paolo, Torre, Vincent Oliver
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Financial exclusion > Philippines > Pasay City; Finance > Philippines > Pasay City; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18462
• Institution: De La Salle University

Being the backbone of an economy, access to finance proves to be an integral part of channellng funds to its most productive uses. Access to finance is defined as availability of a supply of reasonable quality financial services at reasonable costs, where reasonable quality and reasonable cost have to be defined relative to some objective standard, with costs reflecting all pecuniary and non-pecuniary costs (Claessens, 2006). Given this, the issue of financial exclusion arises. The researchers choose to define financial exclusion as a process that prevents individuals from accessing credit from mainstream and or formal financial institutions. As a result of this process, many individuals often resort to informal credit through loan sharks, pawnshops, etc. In this study, the researchers seek to find the factors that could determine financial exclusion in the local level by restricting each household as a unit of observation. This brings the assumption that it is the head of the household that most influences the decision to borrow. Results of the study show that heads of households being female (assuming all variables are constant) increases the probability of financial exclusion. Other variables such as number of dependents under a household head and a household head being a part of an indigenous group also show a positive relationship on being financially excluded. On the other hand, the variable income shows a negative relationship on being financially excluded (as income increases the probability of being excluded is lessened).