Credit Management Practices of Balili Elementary Teachers. Empirical Study

Master's Thesis, 2021

69 Pages, Grade: 1



Title Page



List of Figures

List of Tables

Background of the Study
Conceptual Framework
Statement of the Problem
Hypotheses of the Study

Research Design
Population and Locale of the Study
Data Collection Instrument
Data Collection Procedure
Treatment of Data

Level of Agreement on Credit Management Practicesof Balili Elementary School Teachers
Level of Implementation on the Credit Management Practices as Employed by Balili Elementary School Teachers



A Letter to the Principal
B Survey Questionnaire


The researcher would like to express his utmost gratitude to the following who, in their way, gave their unconditional support to make this study possible:

The Almighty God, the source of light and wisdom, for His enlightenment and guidance, to Him be the honor and glory;

His family, friends, and co-workers for their inspiration, encouragement, and love;

His adviser, Ms. Renebeth G. Donguiz, PhD., for sharing her knowledge on thesis writing, for patiently assisting the researcher to come up with this study, and for selflessly guiding and constantly pushing the researcher throughout the journey;

To the members of the advisory committee, Dr. Felipe S. Comila, University President and Prof. Mary Joy S. Rapuso, CPA, MPA, retired Chief Administrative Officer for their time and effort in scrutinizing the paper and for their valuable suggestions and piece of advice;

The Statistician, Ms. Hira Batinay, LPT, MA-MATH, and Megan Nabua, LPT, for sharing valuable information and suggestions;

To the respondents, Balili Elementary School Teachers, for hospitality welcoming the researcher even if they are busy preparing for il the modules of their students, for making sure the researcher was able to gather all his needed data;

To the principal of the school Mr. Asian S. Canuto, Principal I, for permitting the researcher to conduct his study at Balili Elementary School in La Trinidad, Benguet;

To his inspirations for infusing the much-needed boost; and all other kind-hearted people whom the researcher failed to mention.



JOJO IVAN D, INUGUIDAN, July 2021. Credit Management Practices of Balili Elementary School Teachers, Benguet State University, La Trinidad Benguet.

This study was aimed at assessing and analyzing the Credit Management Practices of Balili Elementary School Teachers in La Trinidad Benguet. Credit management practices are the strategies used by an organization to ensure that the level of credit in the firm is acceptable and is managed effectively. It is part of financial management that comprises the analysis of credit, rating of credit, classification, and reporting of credit. And when credit management is done right, then the capital with debtors reduces, and the possibility of bad debts is also reduced. The main objective of this study was to examine the level of agreement and implementation on the credit management practices when grouped according to sex, civil status, length of service and monthly gross income. The study made use of a descriptive research design and utilized a survey questionnaire as its method.

Results of the study showed that the overall level of agreement on the credit management practices was moderately agreed and the overall level of implementation on the credit management practices was slightly implemented. The respondents were dominated by female, civil status is led by married teachers, length of service was subjugated by teachers who are teaching for one to ten years in service, most of the monthly gross income is in between twenty thousand to thirty thousand pesos and the amount usually borrowed by the teachers is in between fifty-one thousand to seventy-five thousand pesos. To make the teachers understand more on the credit management practices and enabling them to do better, they should attend the necessary level of financial management pieces of training, workshop, simulations, seminars, symposiums, and financial awareness especially in revitalizing the importance of credit management practices.


1 Paradigm of the study

2 Map showing the locale of the study


1 Profile of the respondents

2 Civil status of the respondents

3 Length of service of the respondents

4 Monthly gross income of the respondents

5 Level of agreement on credit management practices of Balili Elementary School Teachers

6 Level of agreement of teachers on the credit management practices when grouped according to sex

7 Level of agreement of teachers on the credit management practices when grouped according to civil status

8 Level of agreement of teachers on the credit management practices when grouped according to length of service

9 Level of agreement of teachers on the credit management practices when grouped according to monthly gross income

10 Level of implementation on the credit management practices as employed by Balili Elementary School Teachers

11 Level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to sex

12 Level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to civil status

13 Level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to length of service

14 Level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to monthly gross income


This chapter presents the background of the study which presents concepts on Credit Management Practices of Balili Elementary School Teachers in La Trinidad Benguet. It includes the conceptual framework and statement of the problem of the study

Background of the Study

There is a difference between borrowing money for investment purposes and borrowing it for the family's daily needs and wants. Some people are borrowing with the end in mind to have an amount of return on investment to calculate or to associate the comparative efficiency of different investments to the value of profit generated from the sale of the investment. Yet, both, regardless of the purpose of the borrowings, should be managed well.

Taken aback, teachers who belong to the so-called noblest profession are not spared from borrowings and they experience being on a tight budget, although they are known to have a very stable job. As second parents of children at school, teachers deserve all the benefits they need to carry out their noble work. The literature so provides that many teachers were borrowers. The CERI (2017) and Mitchell (2011), have revealed that even top-paid teachers from different countries such as Luxembourg, Ireland, Korea, Germany, the United States, and Australia were also engaged in money borrowings. Atkinson and Kempson (2004), found that Britain is progressively over-borrowed, prompting financial challenges as a result of improper credit management practices. Workers end up in financial crisis inferably from the need to spend their income on immoderate goods, for example, cellphones, marked clothes, jewelry, with the end goal of fitting into a society where these goods have turned into a needs, instead of an extravagance. Meanwhile, in Africa and the Philippines, teachers are not paid as high as the other countries, all the more they are known to be borrowers. This then supports Ferrer's (2017) and Mingat (2002), claims that over-obligation among teachers has long hunted the entire public education system.

Teachers need to borrow money to meet emergency needs that cannot be met with the state welfare funds, living beyond one's means appears to be the big get factor behind their debt problems and teachers have been a debt settlement because they work in low-income schools. (Madriaga, 2007). Not only this, but teachers also fall prey to delayed salaries which causes them to resort to other means while waiting for their monthly paycheck to sustain their needs and teachers' spending pattern are affected by their values and goals that's why they become short on money and usually an option for debt or borrow money in any lending institutions.

The teachers in the Philippines are being tagged as "taga London" (it means they tend to loan here and there). One of the identified culprits to their burden of borrowing is the low salary they are receiving. But, given the presented facts that those around the world who are top-paid even face over obligations due to borrowings, credit management practices should also be seen as one of the factors. As Alison (2005) has opined, borrowing should not cause more debts. Instead, it should serve the purpose of why one borrows, such as holding a buffer stock of savings, planning for retirement, and using high-cost methods of borrowing (De Bassa Scheresberg, 2013).

The revelations of Joo (1998) and Grable (2011) and Gerrans et al. (2014), relative to the teachers' borrowing are quite alarming. It is because the personal financial wellness of the teachers is seen affecting the work performance. The burden of paying the amount borrowed affects work productivity. Shad (2001), opined that an employee who is worried about their unpaid obligations could not perform well as it impacts physical and mental wellbeing. It often causes anxiety, depression, and absenteeism. While any organization is for productivity, efficiency, and effectiveness, the employees mirror its goals. They are still the goals' implementers. If personal financial management directly affects their productivity at work, there must be an organization's intervention. Hence, this research aims to look into the credit management practices of one of the most prominent elementary schools in La Trinidad, Benguet. The study is limited to documenting teachers' credit management practices, not necessarily proving their borrowings' correlation to their performance. The teachers' documented practices would be analyzed versus the theories and concepts of good credit management practices. The findings may be used as bases for research-based interventions and serve as a benchmark for their best practices.

Conceptual Framework

This section presents the conceptual framework of the study, the interrelationships among variables, and the important topics and theories underpinning the study. It presents and briefly discusses how the variables are used in this study.

The paradigm of the study is illustrated in Figure 1. It shows the relationship of the different variables that will be involved in this study. The independent variables consist of teachers' profiles, including sex, civil status, length of service, and monthly gross income. Through the factors, it will help in analyzing the data on what is the relationship to the study based on which among the independent variable having the highest percentage that has a big impact or factor on credit management practices of the teachers. The dependent variables consist of the credit management practices, which is the main point of this study. It aims to provide baseline data on credit management practices of teachers in Balili Elementary School that could be a basis for interventions.

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Figure 1. Paradigm of the study

Credit Management Practices

According to Myers and Brealey (2013), credit management practices are strategies used by an organization to ensure that the level of credit in the firm is acceptable and is managed effectively. It is part of financial management that comprises the analysis of credit, credit rating, classification, and credit reporting. And when credit management is done right, then the capital with debtors reduces and the possibility of bad debts is also reduced (Edward, 1993).

The study of Acedillo (2018), revealed that at different districts in Samar, Philippines. Teachers exhibited poor personal financial management practices. This characteristic is true to all. It is, however, evident that the more net income available the better is the teachers' saving, investment, expenditure, money management, and response to unexpected expenses. For families with more members contributing to the pot have healthier savings and investment practices. This means that having a higher net income improves some good financial behavior. Therefore, a need to enhance teachers' financial knowledge to help them to improve their financial management practices and eventually good financial health status. Thus there should be great determination making, an effective, competent, and monetarily stable teacher (Hernandez, 2009).

PPSTA (2014), there are now many providers of teachers' loans. All teachers need to do is spend ample time researching who best to call in times of financial constraints and also teachers must aware of government programs and policies regarding credit. Some government institutions with lower interest where the teachers can barrow: DepEd teachers' salary loan (Philippine Department of Education: teachers' salary loan) under the bank institution at Land Bank will be a maximum of five hundred thousand pesos (P500,000.00) for the salary of eight (8) months and it can be under the short term loan, while the bottom line of the amount is not limited. Teachers will be able to arrange installments for any period at the lowest interest rate - only at ten point five percent (10.5%) commission, PPN Agribank gives teachers loans for one year at a rate of point nine percent (0.9%) commission or 2 years at one percent (1%) commission monthly this institutions are under a government so expect that the interest is lower than compared to the private institutions and everyone should aware of interest before borrowing in a bank. When all requirements are met, the amount is credited through your accounts within a day, Union Bank also took part in the project: the country's leading commercial bank offers a city lending program. Teachers can draw up the amount of eight hundred seventy-five thousand pesos (P875,000.00) maximum. At the same time, experienced teachers can apply for a loan due to sufficient salary or for emergency use. There are no additional or insurance fees, deductions, or hidden charges to your loan. Funds are transferred during the daytime only, it usually takes about an hour after processing your loan before receiving it through your account.

Based on the time term loans are categorized into the short-dated and long term. According to Katoh (2008), a term loan is a loan granted for a specified period with periodic term repayments and installments. The applicant of a term loan should have a deposit account (current or saving account). The three (3) term loans are a. Short- Term loans are extended by the bank to finance the working capital of individuals or for business purposes. b. Medium- Term Loan, which has a maturity period of seven (7) years. c. Long- Term Loan, which has a maturity period longer than seven (7) years but exceeding a maximum period of fifteen (15) years. Depending upon the type of collateral held loans are classified as secured and unsecured. On this, it is all about enabling and enlightening individuals for them to be knowledgeable about their finances to make informed decisions (Kafela, 2010).

Saving Practices is one of the most widely known as financial management principles, generally by setting aside some amount for savings before paying for the expenses. It included knowledge on issues and managing money that includes the following concept: understanding of basic concepts on analyzing assets, the use of such knowledge to evaluate, plan, and perform financial judgments (Hogarth, 2006). Savings according to Hilgert et al. (2003) and Pulka (2015), are part of disposable income which is not spent that will fulfill the daily requirements in the future. It is an amount of something such as time or money that one need not use or spend. Money that could be used for investment to earn interest or be used to purchase assets such as buildings. Saving money entails good financial management. Financial management is related to deferring consumption, which is done by the individuals and understanding of basic concepts on analyzing money and assets, evaluate, execute financial decisions, skills, and capabilities (Kafela, 2010). An example of this is having an active savings plan, maintaining reasonable and low debt, lack of money-related conflict with family or partner, and intentionally following a personal spending plan (Joo, 1998).

As the teachers acquired debts, they have different techniques or strategies on how to manage their borrowed money to the institutions. Financial literacy comes with the individual's knowledge on how to cope with financial funds for its life gratification. The concept of credit can be traced back in history or they have credit record for evidence purposes if there is a problem between the lender and creditor agreement and it was appreciated this transaction after the second world in Europe according to Asante (2015). As assuring that debtors pay on time, there is no additional or surcharge interest when one is paying for the credit, and poor debts are managed in such a manner that debt is paid without damaging the relationship of the debtor and creditor.

According to Massachusetts (2014), teachers may increase their income by reducing their expenses those which is not necessary and paying their debts early to avoid penalty or additional interest. In line with this, Wirthulin (2004), suggested four key steps to financial freedom. First, paying the loans in advance or earlier than the due date to avoid additional interest or charges. Second, practice spending a lesser amount than the gross income or salaries that you received. Teachers should know to identify how to spend less, instead, know how to manage and increase their income properly. Third, learn how to save extra money for emergency use. Teachers should know how to identify needs from wants and set the most in need for spending to be able to save and not to get short on money. Lastly, it is important to know how to lessen and control borrowing money in any institution if it is not necessary. Teachers become more aware of how personal values and goals effects on borrowing pattern and considered on how to budget because it is effective money management.

As opined by Sison et al. (2012), credit and collection management practices can be tested through credit and collection operation audit as to management coordination, leadership, staffing, organization, and planning. Leadership includes the setting, assurance, leaders, involvement, growth, operation, improvement, thoughtful, inspiration, and work satisfaction. In the study of Cheruiyot (2015), it was found out that credit policy positively influences loan repayment thus contributes to reducing loan default. It showed that most of the respondents indicated that well-defined credit policies positively influence loan repayment which resulting in reduced delinquency and if the organization comes up with a clear credit policy, the loan delinquency rates will be minimized. The findings of Gatimu and Kalui (2014) also stated that credit policy has a significant effect on loan default.

Malewos and Abiy (2015), studied individual or personal finance management on abilities among employees in the formal sector in Jimma town in Ethiopia and collected major data on their financial practices. The financial management capabilities were based on the decision-making made in terms of investments, credit, insurance, savings, and debt. The developmental aspects of the financial decision-making process could explain the fundamental causes of the kind of financial behavior by teachers in embracing the financial practices. There are some common characteristics like lack of self-control on borrowing, limited cognitive abilities, and inertia that are known to shape monetary behavior and can only be personally attributed to such results on teachers' adoption of the standard financial practices.

In Ghana, Kwaku (2015), found out that a major factor considered in credit management is the ability of the creditor to pay for their debts. However, to mitigate the risk of default in paying for their credit, microfinance's ensured that loans are well secured or there is a written agreement between the creditor and lenders. Though advances are granted based on the borrower's ability to recompense the advance and not on the basis to pledge sufficient assets to cover the advance in case of default for not paying off its obligations, it is highly desirable for all advances made to customers and staff to be well secured. This means that there must be a collateral exchange of the borrower if ever he or she can't pay for his or her debt to avoid loss of capital and interest in the organization.

The central bank of Kenya in 2005, issued guidelines where banks were required to have debt collection rules and policy procedures which included group enforcements, backer payments, and nonstop monitoring and control of loans (CBK, 2015). In 2016, further guidelines were issued on the adequacy and enforceability of collateral or guarantees for strict adherence and compliance by a commercial bank in Kenya. The need to reduce non-performing loans has seen commercial banks aim at reducing the collection period by adopting stringent collection policy and the effectiveness of the debt policy will be based on the minimization or elimination of defaults on loan repayment (Otieno & Nyagol, 2016). Client appraisal is a process commenced mainly to determine the acceptance or rejection of a plan for credit by the clients. This involves an assessment of the repayment capacity of the borrowers, Gakure and Waithaka (2012). The primary objective is to ensure the loans are issued only to credit well- intentioned customers. The client appraisal process includes assessing the ability of the borrower and any specific risks associated. Auronen (2003) and Mathara (2007), stated that the process entails collecting sufficient information concerning the customer before permitting the credit services and through proper client appraisals, the loans are granted to the right customers through securing the relative revenues of the banks. Hence, crucial in any credit management is to highly identify the level of non-performing loans, lack of satisfactory client appraisal guidelines, and limited use of qualitative methods of loan valuation results in loans not been repaid on time.

Latifee (2006), stated that collection must be taken concerning when and how the past-due totals of debt are to be received. It is a collection technique with knowledge upon due date, grace period, date of turnover of bad debts account to be received, and penalties or surcharge. For any loan, the collection practice should be undoubtedly implied out as part of the credit terms. Borrowers need to know the details of the collection procedure to avoid the surcharge. Kariuki (2010), ensure that collection rules and regulation is needed since all borrowers do not pay the bills in time. Some borrowers take a long time to make payments while others do not pay at all.

Statement of the Problem

Generally, the study aims to determine the credit management employed by Balili Elementary School Teachers. Specifically, it aims to answer the following questions:

1. What is the level of agreement of the teachers on the credit management practices when grouped according to sex, civil status, length of service and monthly gross income?
2. What is the level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to sex, civil status, length of service and monthly gross income?

Hypotheses of the Study

1. The level of agreement of the teachers on the credit management practices when grouped according to sex, civil status, length of service and monthly gross income is Agree.
2. The level of implementation on the credit management practices as employed by Balili Elementary School Teachers when grouped according to sex, civil status, length of service and monthly gross income is Moderately Implemented.


This chapter presents how the research was conducted, where it was conducted, who were the respondents, how they were selected, and how the data were treated. This presents the research design, the locale and population of the study, the data gathering tools and procedure, and the statistical treatment.

Research Design

The study entails a descriptive-qualitative design that is considered conclusive, to observe, describe, investigate one or more variables, and document aspects of a situation as it naturally occurs. Further, this design aimed to show credit management practices of Balili Elementary School teachers.

According to McCombes 2019, it accurately and systematically describes a situation or phenomenon, and appropriate choice to identify characteristics, frequencies, and categories to ensure that the results are valid and reliable. In addition, the data collected using a survey approach can be used to recommend possible explanations for particular relationships between variables and to produce good interpretational models of these relationships.

Population and Locale of the Study

The respondents of the study were all Balili Elementary School Teachers with a total of twenty-five (25). Teachers' financial management practices are a continuing concern as this has indirectly affected their performance. This study was conducted to scrutinize and analyze the documented credit management practices of teachers.

The study was conducted at Balili Elementary School, located at La Trinidad Benguet. Employing the total enumeration sampling as espoused by Creswell (2014), the population considers the entire community as the respondent to the study. Due to this pandemic (covid-19) the teachers and the researcher observed the rules implemented by the government for the safety of everyone. Figure 2 shows the map where Balili Elementary School is located.

Editorial Note: This image has been removed due to copyright issues.

Figure 2. Map showing the locale of the study


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Credit Management Practices of Balili Elementary Teachers. Empirical Study
Masters in Public Administration
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credit, management, practices, balili, elementary, teachers, empirical, study
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JOJO IVAN INUGUIDAN (Author), 2021, Credit Management Practices of Balili Elementary Teachers. Empirical Study, Munich, GRIN Verlag,


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