The feasibility of setting up a savings and loans association in Ilagan, Isabela

• Main Author: Uy, Grace
• Format: text
• Language: English
• Published: Animo Repository 1979
• Subjects: Savings and loan associations—Philippines—Isabela; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/668; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/7506/viewcontent/TG00801_FPP2_Redacted.pdf
• Institution: De La Salle University

This study assists in bridging the financial gap by proposing the setting up of a savings and loans association that will make credit available to the productive users and mobilize unproductive money and encourage domestic savings. The study starts with an evaluation of the economic prospect of the area, made through a detailed analysis of the growth pattern of the various sectors. Then, the marketing objectives and strategies were set based on the economic outlook of the province. Since the study revolves around the area of marketing, primarily deposit generation, different methods of projecting this variable were used. The study made use of secondary data and opinions of specialists and relevant personalities were sought. The findings and conclusions are: 1. It is feasible to set up a savings and loans association (SLA) in Ilagan, Isabela. The estimated discounted return on equity of said financial intermediary is 19.10%. 2. The most sensitive element to the profitability of an SLA is its ability to generate deposit. It is estimated that per peso additional deposit, the SLA can generate a marginal contribution of P.05356 or P.037492 after considering income tax. 3. The province of Isabela will undergo a significant economic revolution in the next five years. The spark plug of growth will be the government infrastructure projects: Magat Multi-Purpose Dam and the Chico River Project. 4. The proposed SLA will cater to an expanded market which will include the commercial sector and the traditional SLA market. 5. To continue supporting the growth of resources, the SLA will rely heavily in branching. 6. With an initial capital of P2 M, the proposed SLA does not need additional capital inflow to comply with the requirement of the Central Bank than an SLA should have additional capital of P250,000 for every branch that it opens. Such funds will be internally generated in the form of income from operation. 7. A sensitivity analysis using the different projection level of deposit shows that the proposed SLA will remain