A logit analysis on the determinants of the decision of SMEs to engage in cash management solutions in the Philippines

• Main Authors: Astudillo, Johanna B., Benedicto, Marie Kimberly S., Chuason, Janina Angela D., Soriano, Maria Angelica P.
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Small business > Philippines; Cash management > Philippines; Small business > Finance; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18481
• Institution: De La Salle University

This paper aims to identify the determinants that affect the decisions of SMEs on whether or not to engage in cash management solutions. It proposes a model aimed at establishing the significance of the determinants identified-- cost, time, user-friendliness, usefulness, convenience, security, and responsiveness-- and at determining their effects on the SMEs' decision. To achieve such objectives, the paper uses logit analysis. This econometric approach is used following a survey involving at least thirty SMEs, both engaged and not engaged in online banking, as its respondents, chosen by quota sampling. The chosen research and sampling design may pose problems with regard to accuracy, generalizability, and reliability of results. It is, hence, suggested that other methods of research and sampling be explored for further verification by those conducting further studies on the matter. The results of the study mostly cover the bank's need for continuous innovation that the market would accept. As such, conclusions derived will be of assistance in determining how SMEs weigh each factor as against the engagement in cash management solutions and, consequently, provide insight to banks on which factor to prioritize in case of instances requiring trade-offs. Unlike other studies that expound on individual's engagement in online banking and SME's engagement in online banking for trade, this paper focuses on SME's engagement in cash management solutions, specifically.