Main Article Content


This study aimed to assess the perceived credit risk associated with microfinance loans among micro-enterprise businesses. It had three primary objectives: first, to profile the respondents based on their demographics; second, to gauge their perceptions regarding the credit risk and of the microfinance loans. The research employed a descriptive-correlational research design and was conducted in Brgy. Poblacion, Iligan City, involving a random sample of seventy-five business owners who completed an adapted and modified survey questionnaire. The findings revealed that a majority of the business owners were elderly individuals aged 51 years and older, primarily running cafeteria businesses. Many of these business owners had availed of microfinance loans for their enterprises, and a significant portion had recently experienced this process. It is noteworthy that the majority of micro-borrowers have limited incomes and a lack of substantial credit history. Over time, the microfinance sector has adopted risk mitigation strategies like group lending models and accepting specific collateral types.

Moreover, microfinance institutions have expanded their lending to microenterprises, assessing their creditworthiness based on cash flows. In conclusion, this study suggests that factors such as age, business type, prior loan utilization, and loan experience do not significantly influence individuals' perceptions of credit risk associated with microfinance loans. Thus, other unexplored factors may play a more prominent role in shaping how individuals perceive the credit risk in microloans.

Article Details

How to Cite
Juventud, W. M., Matigas, E. A. O., Himongala, J., Galla, M. R., & Abiol, M. J. D. (2023). Perceived Credit Risk of Micro Finance Loans among Micro-enterprises Business in Población Iligan City. International Journal of Multidisciplinary: Applied Business and Education Research, 4(10), 3697-3702.


Aucamp, R.-L. (2014, February 2). The Inci-dental Credit Agreement: A theoretical and practical perspective (1). SSRN. Re-trieved June 19, 2022, from
Chun, O. M., Dionne, G., & François, P. (2014, September 4). Credit spread changes within switching regimes. Journal of Banking & Finance. Retrieved June 1, 2022, from
Dowla, A. U. (2016, November 27). A study on credit risk management and performance of Private Bank in Bangladesh. Retrieved June 1, 2022, from
Grippa, P., & Gornicka, L. (2016, August). Measuring concentration risk - a partial portfolio approach. Google Books. Re-trieved June 1, 2022, from
Hudon, M., & Sandberg, J. (2015, January 23). Business Ethics Quarterly. Cambridge Core. Retrieved June 1, 2022, from
Kang, M. (2021, October 29). Suitable for managers, bad for society? Causal. - Wiley online library. Retrieved June 1, 2022, from
Khavul, S., Susanna Khavul () is an Assistant Professor of Strategic Management and Entrepreneurship in the Department of Management, P., A., C., A., J., A., D., A., B., A. de A., N., A., A., B., J., B., T., B., S., B. G., P., B., P., B., D., B. G., A., C., M., C., A., C., G., C., … Neal, M. (2017, November 30). Mi-crofinance: Creating opportunities for people with low incomes? Academy of Management Perspectives. Retrieved June 1, 2022, from
Miled, K. B. H., & Rejeb, J.-E. B. (2015, July 26). Microfinance and poverty reduction: A re-view and synthesis of empirical evidence. Procedia - Social and Behavioral Scienc-es. Retrieved June 1, 2022, from
Monetary policy and credit spread: A new risk-taking channel. (2018, December). Re-trieved June 1, 2022, from
Namvar, A., Siami, M., Rabhi, F., & Naderpour, M. (2018, April 28). Credit risk prediction in an imbalanced social lending environ-ment. Retrieved June 1, 2022, from
Olobo, M., Karyeija, G., Sande, P., & Koch, S. (2021, August 2). Credit risk management practices and performance of commercial banks in South Sudan. Journal of Finan-cial Risk Management. Retrieved June 1, 2022, from
Prem, C. (2022, January). The theory of credit contracts: With a focus on group lending. Retrieved June 19, 2022, from
Sidhu, G. (n.d.). Questionnaire FRO Micro Fi-nance Survey. Scribd. Retrieved January 17, 2023, from
Wang, S. (2020). Ohiolink. Retrieved June 1, 2022, from