Negative Impacts of Frequent Loan Acquisition by Sari-Sari Store Owners in Ambuklao, Bokod, Benguet

Abstract ―​

Sari-sari stores, family-owned convenience stores, were a vital part of the Philippine economy, especially in the rural communities. However, a lot of sari-sari store owners in Ambuklao, Bokod, Benguet faced significant financial challenges because of frequent loan acquisition. This study explored the reasons behind frequent loan acquisition by sari-sari store owners in Ambuklao, the negative impacts of this practice on their business operations, and their coping mechanisms to manage their financial obligations. Quantitative descriptive research was used; a survey questionnaire was distributed to a sample of one hundred twenty-three sari-sari store owners. The findings showed that the primary reasons for frequent loan acquisition were to purchase additional stocks, maintain cash flow during periods of low sales, and to take advantage of bulk purchasing from suppliers. The study also found out that frequent loan acquisitions have negative impacts on business performance, like higher risk of bankruptcy, high interest rates affecting profitability, difficulties in repaying multiple loans on time, reduced availability of cash for expenses, and difficulty in maintaining stocks due to loan repayments. The study concluded that sari- sari store owners in Ambuklao relied on loans to sustain their business operations but faced challenges because of high interest rates and repayment difficulties. Despite these challenges, they have coping mechanisms, like seeking financial education, creating emergency funds, and managing cash flow, to mitigate the negative impacts of frequent loan acquisition.