A Structural Equation Model on Loan Repayment in Credit Cooperatives in Davao Region

Juris Daniles Perez; Rosalia Taub Gabronino

doi:10.36948/ijfmr.2026.v08i03.78657

A Structural Equation Model on Loan Repayment in Credit Cooperatives in Davao Region

Author(s)	Ms. Juris Daniles Perez, Dr. Rosalia Taub Gabronino
Country	Philippines
Abstract	The ability for credit cooperatives to continue lending in developing countries depends upon the repayment performance of their members. The purpose of this study was to develop a best-fit structural model that explains the loan repayment performance of cooperative members in the Davao Region, Philippines. The research sought to examine the impacts on loan repayment of money attitudes, client literacy and borrower characteristics. The theoretical framework for this research consists of The Theory of Planned Behaviour and The Agency Theory. A quantitative research approach was employed utilizing survey data collected from 468 cooperative members via a modified survey instrument. The analysis was carried out using Partial Least Squares Structural Equation Modelling (PLS-SEM) approach. The results of this study suggest that the amount of money a cooperatives’ members are willing to lend is influenced by their attitude towards money (power prestige; retention time), their level of knowledge about financial products (financial literacy; financial anxiety) and their spouse’s influence on them as borrowers; and all three variables were found to significantly influence how well the cooperative’s members repay their loans. The final model demonstrates strong predictive power and explained many aspects of repayment performance through the use of variables relating to loan size, borrower capacity, duration of loan processing; duration of loan repayment; the extent of follow up by the lender; type of business being financed by the loan and location of the business being financed by the loan. Results indicate there is a strong link between a person’s loan repayment behavior and the four variables that shape that behavior, including (a) their behavioral orientation, (b) financial capacity, (c) household influence, and (d) how loans are designed by lending institutions; therefore, it is recommended that cooperatives improve loan repayment sustainability outcomes through the implementation of literacy programs, behavioral screening for borrowers and improved design and delivery of credit schemes.
Keywords	Loan Repayment, Credit Cooperatives, Borrowers, Members, SEM, Philippines
Field	Business Administration
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-05-17
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.78657

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A Structural Equation Model on Loan Repayment in Credit Cooperatives in Davao Region

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