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Research Methodology

This chapter details out the research methodology for the present study.it

explains the research design, the subject of the study, the data gathering

instrument, the data gathering procedure, and the statistical treatment used in

data analysis.

Research Design

The main purpose of the study is to determine the effects of Credit Risk

Management to the Financial Stability of Lending Institution in Lipa City. To be

able to gather the necessary data, the researchers utilize descriptive method,

using quantitative approaches. Test questionnaires would be given to

respondents for the statistical representation

As widely accepted, descriptive method of research is a fact finding study

that involves adequate and accurate interpretation of findings. It involves

collecting of data in order to answer the questions concerning the status of the

study. The descriptive method of research is appropriate to this study since it

aims to know the effects of Credit Risk Management to the Financial Stability of

lending institution in Lipa City.

Participants of the Study

The study will have respondents directly from all lending institutions I n

Lipa City. This may include managers and owners of the entities. Based on the

information gathered by the researchers from the Business Permit and Licensing

Office, there were 30 lending institutions operating in Lipa City as of January

2018. The researchers decided to include all the lending institutions for them to

gather all the possible information and to have an assurance since there are only

few considerable amount of lending institutions in Lipa City. The list of target

lending institutions was presented in Appendix A of the study which comes from

the Business Permit and Licensing Office (BPLO) in Lipa City.

From a total of 30 lending institutions, 20 institutions completely answered

the questionnaire while the remaining 10 institutions refused to answer due to

confidentiality issues.

Profile of Lending Institutions in Lipa City

The profile of the lending companies in Batangas City provides basic

information about the participants. It includes basic information about the

institution’s form of organization, length of operation, type of loans extended by

the lending institutions. Table 1 presents the profile of the partisipants in terms of

length of operation.

All of the lending institutions are corporations. This is in accordance with

the Lending Companies Regulation Act of 2007 (RA 9474) that requires lending

institutions in granting loans to be a corporation . TABLES NA MGA BES



Data Gathering Instrument

For effective and flawless data collection, survey method was used.

Survey is the most extensively used method for data collection. In order to

efficiently use the survey method, the researchers developed questionnaires.

The five point scale scoring was used to quantify the assessment of the

respondents. The questionnaire was chosen due to its feasibility, convenience

and speed in term of gathering information necessary in the accomplishment of

this study. It is composed of two parts: the profile of the business and main

problem that is divided into four parts. Included in the second part are the

questions needed to answer the problems stated in the study.

Data Gathering Procedure

The first step undertaken by the researchers was to ask for the adviser’s

approval of the research topic they proposed. Afterwards, the researchers

gathered information from books and other research materials to obtain essential

and accurate data about the problem being investigated. The same materials

were also used to arrive at a conceptual framework and to develop the survey

questionnaire for the study. The researchers visited and gathered information

from the library and they also used the undergraduate thesis, which served as a
guide for the construction of the research. The researchers then obtain a list of

lending institutions in Lipa City from the Business Permit and Licenses Office

(BPLO). The drafting of the questionnaire was immediately followed and checked

by the adviser.

Statistical Treatment of Data

The data gathered were tallied, tabulated, analyzed and statistically treated to

facilitate the analysis and in arrive at certain conclusions.