OUR LADY OF

LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

CHAPTER I

THE PROBLEM AND ITS BACKGROUND

INTRODUCTION

The idea of cooperation is not new to man. It is as old as man

himself. Cooperatives are an almost universal form of organization

today found in practically all countries and used by people in many ways.

The cooperatives are formed to secure low cost credit, to purchase

supplies and equipment for farming and household needs, to market

products, even to secure many services, like electric power, irrigation,

health, and insurance. Cooperatives can be used in many ways to

benefit people in the everyday needs of life.

It is one of the outstanding and awarded cooperatives in Metro

Manila located at Marulas, Valenzuela City . It has lasted for about thirty

one years since it was founded in 1985 by Bishop Deogracias Enuiguez

with only 34 members but as of 2018 they are already 4, 127.

According to Hayati et. al (2008), credit cooperatives are currently

receiving vast competition from the financial institutions. There are

various credit products in the market with different features. As various

credit products grow in the market, this has given a challenge to the

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

credit cooperatives which are still operated in a small scale operation.

In the National Cooperative Policy Plan 2011- 2020, financial services

cooperatives are encouraged to offer various financial products such as

credit financing and also other financing services as to support the

business development in the country.

A cooperative needs to realize good quality of service, in order to

keep members and maximize profitability. It is important that

employees realize a common cooperatives goal and to work on

implementation of strategies to achieve the goal. Service quality is one

of the most effective means of establishing a competitive position and

improving efficiency and profit performance. To establish a competitive

position, cooperative must measure and determine their level of service

quality, if they desire to keep their members and satisfy their needs.

The rapid growth and increasingly complex market in the service

sector has provided an opportunity for researchers to study on

behaviour and the importance of issues related to service quality. Most

experts agree service quality is the most effective form of market and

competitive business strategy nowadays. This study examines the

"Service Quality of Our Lady of Fatima Credit Cooperative in Marulas,

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Valenzuela City As Perceived by the Members". Members are the main

clients who are responsible to subscribe on the products and services

which their cooperative offered.

CONCEPTUAL FRAMEWORK OF THE STUDY

1. What is the profile of - Giving of informed IMPROVED

the members- consent form to the
respondents. SERVICE
respondents of Our
Lady of Fatima Credit QUALITY OF
-The researchers will
Cooperative in terms collect data and OUR LADY OF
of information through FATIMA
a. Gender the use of a survey CREDIT
b. Age questionnaire to the
participants from
COOPERATIVE
c. Civil Status;
d. Number of years Our Lady of Fatima
Cooperative
of membership
2. How effective is the -The respondents’ SATISFIED
service rendered by total population is CUSTOMERS
the employees and 120 and when
Slovin’s formula is
OF THE OUR
the cooperative itself
in terms of; used, it becomes 92 LADY OF
a. Reliability samples. This FATIMA
number of sample is
b. Tangibility;
to be used in our
COOPERATIVE
c. Responsiveness; analysis since we
d. Assurance, and used simple random
e. Empathy; sampling.
3. Is there a significant
difference between -The researchers will
the perception of the compute, analyze,
members and the interpret and will
work on the collected
number of years of
data thoroughly.
membership they
are?

INPUT PROCESS OUTPUT

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Figure 1.1: Paradigm of the study

RELIABILITY

As the researchers, we want to know the reliability of the credit

cooperative that we are going through. We also want to know if the

service of the cooperative or the cooperative itself is very reliable for

the customers inside that cooperative.

TANGIBILITY

As the researchers, we want to give information for the customers

for them to be more knowledgeable and wise for getting into a credit

cooperative, not just in words but also in action for them to be more

tangible for the customers or members in that cooperative.

RESPONSIVENESS

As the researchers, we want to make sure that the credit

cooperative itself is very responsive in may ways. We also want to know

if the service they provide are responsive enough for their members.

ASSURANCE

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

As the researchers, we want to know if assurance is present in

their cooperative,because we all know that assurance is the most

important in the five aspects because it serves as the foundation of the

credit cooperative.

EMPATHY

As the researchers, we want to further know what is happening

inside that credit cooperative for us to be more knowledgeable about it.

We also want to put ourselves there to know the different perceptions

of the members that are inside that cooperative.

THEORETICAL FRAMEWORK OF THE STUDY

A theoretical framework is a collection of interrelated concepts,

like a theory but not necessarily so well worked-out. A theoretical

framework guides the researcher; determine what things they will

measure, and what statistical relationships they will look for. It

introduces and describes the theory that explains why the research

problem under study exists.

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Service quality model adapted in this study was developed by

Parasuraman which is divided into five (5) components, namely: (i)

Reliability; (ii) Tangibility; (iii) Responsiveness (iv) Assurance; and (v)

Empathy;. Reliability refers to the ability of the firm to provide services

guaranteed to be accurate and reliable. Tangibility refers to the state of

the physical assets of the firm such as buildings, vehicles, property and

staff.

Responsiveness refers to the willingness of the firm to help their

customers by providing quick service and ultimate satisfaction to their

customers. Assurance refers to the knowledge and attention of the firm

in providing the services and their ability to convey trust and confidence

towards customers. Empathy refers to the level of attention given to

every individual customers dealing with the firm.

The author presented a situation that service quality is a focused

evaluation that reflects the member's perception of, reliability,

tangibility, responsiveness, assurance, and empathy.

STATEMENT OF THE PROBLEM

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

The purpose of this survey research is to determine the service

quality of Our Lady of Fatima Credit Cooperatives as perceived by the

members.

This study seeks to answer the following questions:

1. What is the profile of the members-respondents of Our Lady of

Fatima Credit Cooperative in terms of

a. Gender

b. Age

c. Civil Status; and

d. Number of years of membership

2. How effective is the service rendered by the employees and the

cooperative itself in terms of;

a. Reliability

b. Tangibility;

c. Responsiveness;

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

d. Assurance, and

e. Empathy;

3. Is there a significant difference between the perception of the

members and the number of years of membership they are?

HYPOTHESES

This study aimed to answer the effectiveness of Service Quality of

Our Lady of Fatima Credit Cooperative as perceived by the embers.

Ho. There is no significant difference between the perception of the

members and the number of years of membership they are.

Ha. There is a significant difference between the perception of the

members and the number of years of membership they are

SIGNIFICANCE OF THE STUDY

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

This study aimed to determine the level of effectiveness of Service

Quality of Our Lady of Fatima Credit Cooperative in Marulas, Valenzuela

City as Perceived by the Members:

This study was conducted to collect information on where and

when the cooperative became popular since then. The study would be

able to benefit the members in joining cooperatives that will also help

the Our Lady of Fatima Credit Cooperative OLOFCCO in Marulas,

Valenzuela City through their services and managing their organization.

First, the Management. The management can use the

information that the researchers will provide when they have finished

this study in order for the management to improve or maintain the

service quality of their organization.

Second, the Community. People can go to the nearest

cooperative which is Our Lady of Fatima Credit Cooperative when they

want to invest, save, and even acquire money for their needs.

Third, the Members. Members can reach out to the cooperative

anytime, generally, investors and savers

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Lastly, the Future Researchers. This study can also help other

future researchers who will be conducting a similar study by providing

them with basic knowledge about the Service Quality of Our Lady of

Fatima Credit Cooperatives.

SCOPE AND DELIMITATIONS OF THE STUDY

This research entitled "Service Quality of Our Lady of Fatima

Credit Cooperative in Marulas, Valenzuela City as Perceived by the

Members" focuses on the service rendered of the cooperative.

This was limited to 120 or more respondents who were invited to

participate in the survey questionnaire, related to the service quality of

cooperatives as perceived by the members.

DEFINITION OF TERMS

The following terms are defined to give clearer meaning to the

reader of the study.

Ambiance. It is the "artificial environment" or the tangibility for

it includes physical aspects connected with service such as instruments

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

and equipment, persons, physical facilities like buildings and nice

decoration and other observable service facilities which influence both

clients and workers in the Cooperative.

Capital. It is that part of the wealth of a country which, is

employed in production it consists of food, clothing, tools, raw materials,

machinery, etc., necessary to give effect to labour.

Cleanliness. Both the abstract state of being clean and free from

dirt, and the process of achieving and maintaining that state.

Cooperation. The association of a number of persons for their

common benefit, collective action in the pursuit of common well-being,

especially in some industrial or business process.

Effectiveness. It is the extent to which an activity fulfil its

intended purpose or function.

Investment. It refers to spending on Capital goods, which are

capable of aiding the productive process to augment future production

of goods.

Performance. It is a process which contributes to the effective

management of individuals and teams in order to achieve high levels of

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

organizational performance. As such, it establishes shared

understanding about what is to be achieved and an approach to leading

and developing people which will ensure that it is achieved.

Quality. The degree to which performance meets expectation.

Good quality means a predictable degree of uniformity and

dependability with the quality standard suited to the customer.

Savings. It refers to left-over income after spending on

consumption goods, which satisfy our wants directly.

Service. It refers to "any tangible act or performance that one

party offers to another that does not result in the ownership of

anything."

CHAPTER II

REVIEW OF RELATED LITERATURE AND RELATED STUDIES

In this chapter, researchers will introduce the collected

information about the service quality of Fatima credit Cooperative. This

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

literature analysis includes articles, journals and thesis that explain what

is the service quality of Fatima credit Cooperative.

REVIEW OF RELATED LITERATURE

The data suggest that MFI households represent only a small

fraction of households in this community. Among MFI households, the

incidence of multiple borrowing is large, if by multiple borrowing we

mean borrowing from all possible sources of credit. If by multiple

borrowing we mean borrowing from other MFIs, not a single MFI

household in the sample report themselves to be borrowing from

multiple MFI sources. This could be due to sampling error or households

could be deliberately providing false information. Data from the other

data collection effort – branch client data – can serve to validate this

finding.

The MFI clients employ systems to avoid excessive debt burden.

If they have to get into multiple borrowing, they only borrow small

amounts or they try to borrow loans with terms that make repayment

affordable and at lower cost. Not all members of the target group

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

exercise prudent money management however. This calls for MFIs to

adopt strategies to protect clients, from over indebtedness for instance,

while at the same time offering an array of products and services to

meet their needs.

According to Kumar (2011) on his study on Understanding

Customer Behavior of Multiple Borrowing Through Prospect Theory, The

phenomena of multiple borrowing in micro finance clients are widely

prevalent so much so that it has become a major cause of concern and

challenge for the micro finance industry. The researches have been

sparse to create an understanding of why would micro finance clients

take out multiple loans. Some of the empirical researches attempted to

delve into the potential causes and it includes a mismatch between the

size of the loan and the business/personal needs of the clients, a lack of

financial sense or the clients’ oversight, among many other reasons. The

lack of research work to create theoretical understanding on the subject

motivates the present research. The present research aims at

understanding the client behavior which leads to multiple borrowing

through widely applicable theories on behavioral finance “Prospect

Theory”. To achieve the objective, the research is designed to explain

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

the theory and then inference of the theory is drawn to identify the

underlying causes prompting the risk seeking behavior of the person

that result into the situation of multiple borrowing. The future research

can seek to validate the findings with the research experiments on the

micro finance borrowers. The understanding has important implications

to design an appropriate mechanism to control multiple borrowing to

the micro finance clients and also to make more reliable assessment of

credit risk of the customers. The multiple micro finance agencies are

acting as a catalyst in encouraging risk seeking approach of the

borrower.

According to Ghate (2009), 92% of poor households in Andhra

Pradesh had been covered by March 2005 by the state SHG programme

(Velugu), with plans to reach 100% by 2005 end. Surveys by APMAS

found that in Guntur, dual membership was as high as 67%, and that

32% of the respondents had multiplememberships with Velugu,

Spandana and SHARE in 2005. In 2006, the Krishna survey found that

multiple memberships in the three had increased to 82%. Despite the

presence in the area, of two large fast expanding MFIs, new local MFIs

were starting up.

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Stated by, Swamy (2010), an eminent economist, revealed that

27 per cent of multiple borrowings by micro borrowers were used for

repaying loans of other MFIs and SHGs and to smoothen business cash

flows. 'Big' enough loans to meet requirements of growing micro

businesses are preferred by borrowers despite comparatively higher

rate of mark up which is less than higher transaction cost involved in

borrowing from more than one source.

In the last three decades, the micro finance industry has

witnessed a substantial growth accompanied by a high incidence of

multiple borrowing among its clients in developing and emerging market

economies. On one hand, multiple borrowing, simply defined as taking

multiple loans from multiple sources simultaneously, is considered to be

a common and optimal cash flow management strategy of low-income

households in developing countries. Low-income households take

multiple loans from multiple sources to smoothen their cash flow on

regular bases acquire larger loans than a micro-lender offers when

creditworthy, manage inflexible loan repayment schedules of micro

finance institutions when faced with unexpected adverse shocks (Chen

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

et al., 2010; Schicks and Rosenberg, 2011; Guérin,2012 and

Wampfleret. al., 2014).

On the other hand, multiple borrowing is becoming increasingly

perceived as a symptom of household’s over-indebtedness. Through

multiple borrowing, households can (1) increase the amount of loan that

they can borrow and accumulate more debt than they can repay, (2)

simply refinance or turn-over existing loans that are ultimately un

payable and enter into a vicious circle of debt and dependency, (3) easily

default on a loan from one micro-lender while still keeping their

borrowing relationship with other micro-lenders and meeting their

financial needs elsewhere (Chen et al., 2010 and Schicks and

Rosenberg, 2011).

Cooperatives and other financial services providers are

increasingly developing service quality initiatives. In the article of Lei

(2012) that entitled "Service Quality: Recent Development in Financial

Services," revealed some of the research literature on service quality

was considered to include definitions, determinants and measurement

of quality. Attention was also given to research applications which focus

on management, employee and customer perspectives. In addition, a

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

number of continuing service quality concerns are highlighted, relating

to changing customer expectations, the need for an integrated approach

to service quality and the development of service quality measurement

tools was shown. As financial institutions grow, there was a tendency

for service to give way to volume delivery to enhance profitability. Those

large banks appeared to have mistakenly felt that quality service caused

profits to erode. But, the researcher was of the opinion that service

quality could make a difference as it leads to reduced costs, increased

profitability, and other beneficial elements.

Based on the study of Bahia and Nantel (2011) in their article

described the study performed in Canada to develop a reliable and valid

scale for the measurement of the perceived service quality of

cooperative services. A sample of cooperative customers was

questioned. The proposed scale is called cooperative service quality and

comprises 31 items which span six dimensions: effectiveness and

assurance; access; price; tangibles; services portfolio and reliability.

They disregarded responsiveness in their research, claiming a lack of

reliability even though they recognized SERVQUAL and all of its

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

dimensions as the best known, most universally accepted scale to

measure perceived service quality.

According to Boulding, 1 et al., (2013) developed a behavioral

process model of perceived service quality, relying on a Bayesian-like

framework. Perceptions of the dimensions of service quality are viewed

to be a function of a customer's prior expectations of what will and what

should transpire during a service encounter, as well as the customer's

most recent contact with the service delivery system. These perceptions

of quality dimensions form the basis for a person's overall quality

perception, which in turn predicts the person's intended behaviors. he

authors first tested their model with data from a longitudinal laboratory

experiment. Then they developed a method for estimating the model

with one-time survey data, and re-estimated the model using such data

collected in a field study. Empirical findings from the two tests of the

model indicated, among other things, that the two different types of

expectations have opposing effects on perceptions of service quality and

that service quality positively affect intended behavior.

Based on Zeithaml, Parasuraman and Berry (2015), they noted

that customer focus groups universally found good service quality as

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

meeting the expectations of the customer. They also noted that firms

not only have a difficult time delivering a consistent level of quality

service even though it improves the profit level for firms providing

services, but also understanding specifically what service quality really

entails. The authors determined modified SERVQUAL dimensions to be

the best determinants for measuring service quality. Tangibles,

reliability, responsiveness were the original dimensions for evaluating

service quality; however, assurance replaced competence, courtesy,

credibility, and security; while, empathy replaced access,

communication, and understanding the customer in the original ten

dimensions for evaluating service quality.

On a study conducted by Briones (2012), he found out that most

of their respondents identified tangibility as the most important factor

in determining satisfaction. It includes the personality and appearance

of the establishment. Cleanliness of uniform and appearance of staff

both received high ranking. When front office staffs are well dressed and

wear smart uniforms, their appearance impresses customers who feel

more confident with hotel services. They found that service quality was

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

related to the tangible behavior and appearance of employees. The best

predictor of overall service quality was the tangibility dimension.

As stated by De Castro (2017), he noted that the time it takes for

an employee to response to a customer's request is same as the

promptness of the employee in entertaining request or help. Moreover,

Perdigon (2011) indicates that in putting up any food service or lodging

facility, one of the major factors to be considered is the safety and

welfare of not only the guests and customers but also of the employees

working in that establishment. People should be made aware of

emergency procedures and safety measures to prevent accidents and

worse, death. Lastly, concern for the environment should be very much

prioritized because the well-being of the people would not mean

anything if the environment that they live in is in poor condition.

Moreover, Marasigan, et al., (2010) encouraged the employees of

the cooperative to be more consistent in their behavior, attitude, and

performance in dealing with customers. They also encouraged giving

suggestions to the management that they think could help to enhance

the training program. Further, the researcher also encouraged the

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

management to have a regular evaluation regarding the customer

service training program to maintain its effectiveness.

On the other hand, Aguba et al. (2012) indicated that efficient

and constant supervision of the employee must be observed to maintain

the good impression of the customer. Further, it indicated that

customer's evaluation should be considered to obtain service

improvement. Cooperative may encourage their employees to be more

productive and motivate them to attend to customer's need, request,

and complaints.

Based on the study conducted by to Chua and Tiongson (2010) on

their study on multiple borrowing in the Philippines, represents a pilot

effort to understand the incidence of multiple borrowing and its

correlates in a particular community. It complements other data

sources, reflecting different notions of multiple borrowing and strengths

and weakness in the quality of information collected.

Based on (Diaz et.al., 2011), on their study on Multiple Borrowing

in the Philippines (February 2011), found strong evidence of the

occurrence of multiple borrowing among urban-based women micro

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

entrepreneurs. Close to half (65 women) of the sample acknowledged

having current loans with two lenders (65% of the multiple borrowers)

or with three or more lenders (35%).Most of the multiple borrowers

obtain their extra credit from non-bank financial institutions (43.94%)

like MFIs, followed by family members and relatives (30.30%), and

individual moneylenders at 24%.This indicates that the availability of

many MFIs in the urban area do facilitate the incidence of multiple

borrowing. The average loan principal for all respondents is P10,423

while multiple borrowers register a higher average of nearly P17,000.

This data suggests incremental loan/s falling within the average loan

size range of the total sample. This may indicate some form of control

exercised by multiple borrowers or by the lenders. Multiple borrowers

are quick to point out the many advantages of having access to loans.

In particular, having money when you need it has been found to help

sustain business operations, keep children in school, and provide

support to families in distress due to medical emergencies, for example.

For all its advantages, multiple borrowers do acknowledge the stress

and mental burden that go with multiple borrowing when money is tight

and there is not enough to go around to meet the needs of the family,

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

business and lenders. Thus, only a small 20% among them would

endorse getting into multiple borrowing, offering a further advice of only

doing so if money will be put to good use.

REVIEW OF RELATED STUDIES

According to Porter (2010; 2011) cost leadership and

differentiation are directly connected with profitability and ultimately

superior performance of firms. Accordingly; research on generic

strategies has identified strong links between Porter generic strategy

types and performance. Some studies have found support for a single-

strategy performance benefit (Allen and Helms, 2006; Hahn and Powers,

2004, 2010); while others studies have shown that it is possible to

pursue a strategy that includes both cost and differentiation competitive

methods. In a service industry, Allen and Helms, (2009) found that

hospitals follow generic strategies and conclude that a focused cost

leadership strategy is the best route to superior performance. Similarly,

in their research on the UK wine industry, Richardson and Dennis (2013)

found the hybrid focused differentiation approach was best for niche

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

segments. Spanos, Zaralis and Lioukas (2014) studied the Greek

manufacturing and found hybrid strategies were preferable to pure

strategies. Additionally, Hahn and Powers, (2010) identified distribution,

technology, segmentation, pricing, product development, branding,

service quality, and relationship banking as areas where financial

institutions pursue differentiation strategies. In Kenyan, various studies

on the adoption of competitive strategies have been undertaken on local

firms, for instance, Karanja (2012) looked at competitive strategies in

real estates’ using Porter’s framework and Murage (2011) investigated

the competitive strategies adopted by members of The Independent

Petroleum Dealers Association. Both studies found that competitive

strategies lead to superior performance.

The study by Karanja (2012) found that the strategies pursued by

Real Estates conform to Porters Generic Strategy types and since Real

Estates serve customers from different income groups, all the three

generic strategies were found to be significantly related to performance.

The more these strategies were pursued, the more the performance of

real estates improved leading to superior performance.

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Also, Murage (2011) found generic strategies to have positive

effects on the superior performance of Petroleum companies and

recommended increased pursuit of these strategies by all Petroleum

Dealers in Kenya.

Likewise, Abdullahi (2010), examined strategies adopted by

Kenyan Insurance companies and found that most do not have clearly

defined competitive strategies.

As stated by Muturi (2010) analyzed strategies by firms facing

changed competitive conditions on East Africa Breweries and Mutura

(2016) examined factors influencing the effectiveness of guarantor ship

in loan recovery on Mwalimu Sacco society limited. Both studies found

that the firms adopt generic strategies to enhance performance.

According to Simanowitz and Brody (2009), microcredit

refers to small loans, whereas micro finance is appropriate where NGOs

and Micro finance institutions supplement the loans with other financial

services (savings, insurance, etc.). Therefore micro credit is a

component of micro finance in that it involves providing credit to the

poor, but micro finance also involves additional non-credit financial

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

services such as savings, insurance, pensions and payment services.

Littlefield, Murduch

According to Meyer (2010) reached a similar conclusion.

Surveying available evidence for Asian countries, he concluded that

while access to micro credit seems to have an overall positive effect on

income and education, results differ substantially across countries and

programs both in magnitude and statistical significance and robustness.

This study, therefore, analysed the incidences of multiple

borrowing, reasons for multiple borrowing, and effects of multiple

borrowing on loan repayment at Iringa municipality in Tanzania.

Currently, Iringa municipality is estimated to have a population size of

about 120,000 people (NBS, 2007) with over 10 microfinance providers

excluding Savings and Credit Cooperative Societies (SACCOS) (MBF,

2010).

Service can be defined in many ways depending on which area the

term is being used. An author defines service as "any tangible act or

performance that one party offers to another that does not result in the

ownership of anything", while quality can be defined as the totality of

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

features and characteristics of a product or services that bear on its

ability to satisfy stated or implied needs. Kotler (2009).

According to the study of Bursohn a cooperative society is an

organization formed by a group of people who come together voluntarily

to fulfill their economic and social needs through democratically

controlled systems. This provides opportunity for cooperatives to

address members’ well-being.

Cooperators are based on the values of community, people before

capital, self-help, mutuality, democracy, quality services, and

stewardship and social responsibility that lead to economic power and

better environment worldwide. The absence of cooperative

organizations in communities becomes challenging which creates

constraints that debar development. The present study examined the

relationship between cooperative governance and social performance in

cooperative societies to enhance development. It showed that social

performance promotes trust, dependability, and loyalty with interaction

between members and executive management and among the general

membership. Therefore, low economic levels can be minimized, quality

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LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

education could be acquired, and general welfare could be achieved

which reflect a developing world.(Harch & Johnson, 2009)

SYNTHESIS OF RELATED LITERATURES AND RELATED STUDIES

The literature and study cited in this chapter of our research tackle

about the service quality of Fatima credit cooperative. More

understanding and ideas or information that serves as foundation of our

proposed research study. The literature and studies may also include

different authors that may involve in this particular study.

It is often seen that many people are members of this type of

organization. This has been going for more generations and it’s very

convenient to the people nowadays. It is one of the many ways on how

Filipino people survive in their daily expenses and daily needs.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

CHAPTER III

RESEARCH DESIGN AND RESEARCH METHODOLOGY

In this chapter presents the detailed idea on how the research was

conducted. It includes the Research Design, Research Locale,

Respondents of the Study, Research Instrument, Procedure of Gathering

Data, and Statistical Treatment of Data that used in study. This is

following the quality standard of research.

RESEARCH DESIGN

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

This study uses survey research design because the researchers

are going to get the opinions and point of view of the respondents

regarding the topic about service quality of Our Lady of Fatima

Cooperative.

This study will be using Survey method because we will be using

or we will the researchers use it because it needs the use of interview,

observation, and questionnaire.

RESEARCH LOCALE

This study was conducted at Our Lady of Fatima Credit

Cooperative, with Tel. no:945-5810 and 443-4021 Telefax: 293-4094

Cell phone no: 09237459111 Emailfatimacreditcoop@yahoo.com.ph.

This place was selected known the efficiency of the said study among

professionals and non-professionals in the cooperative. This study has

tested the effectiveness of Service Quality offered by Our Lady of Fatima

Credit Cooperative.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

SAMPLES AND SAMPLING METHOD USED

The respondents of this study are the members of Our Lady of

Fatima Credit Cooperative in Marulas, Valenzuela City.

There are 120 respondents for the members of Our Lady of Fatima

Credit Cooperative. The researcher used the survey method to interview

the members of the cooperative.

The researchers used the simple random sampling method. It

refers to pure chance selection of participants. Each member of the

subset has an equal probability of being chosen. To use this, we use the

fishball method to get the samples.

We will be using simple random sampling because it is the one

needed to our research. This is a sampling design wherein each element

in the population has an equal and independent chance of selection in

the sample. The concept of independence means that the choice of one

element is not dependent upon the choice of another element in the

sampling or the selection or rejection of the element does not affect the

inclusion or exclusion of another.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

To get the number of samples to be used in our study, we will use

the Slovin’s formula here and it comes up that our samples to be used

is 92 samples out of 120 total population.

The formula for Slovin’s formula are as follows:

n=

where: n = sample size

N = population size

e = margin of error (0.05)

THE INSTRUMENTS

The questionnaire Check List Form is used to know the

demographic profile of the members: the gender, age, civil status, and

numbers of years of membership categorized in the list to determine the

profile of the members as respondents.

This instrument shows the indicators found if there is a problem

encountered in terms of Service Quality of Our Lady of Fatima Credit

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Cooperative in Marulas, Valenzuela City as Perceived by the Members.

It also justified whether the service rendered by the staff and the

cooperative itself is efficient or not.

The results of these factors particularly on the service quality will

have the most certain effect on the interest of the members to returnrn

to the Our Lady of Fatima Credit Cooperative OLOFCCo. Failure to have

these attributes does not seem fatal but certainly lowers the potentials

for the members to return. The questionnaire was designed for the

respondent to be able to answer easily. In this type of questionnaire,

the respondents were given a choice to evaluate the questionnaire.

DATA GATHERING PROCEDURE

The researchers presented a letter of request of permission to the

manager to conduct a research study.

The researchers distributed the questionnaires to the respondents

of the study at Our Lady of Fatima Credit Cooperative in Marulas,

Valenzuela City. Along with this, we also give them an informed consent

form to check if they want to participate or not.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

120 respondents were given a copy of survey questionnaire for

evaluation. After they answer our survey questionnaire, retrieval

process follows and we analyze and interpret the data using the

appropriate statistical tool.

STATISTICAL TREATMENT OF DATA

The data from the questionnaire were summarized, tallied,

tabulated, and analyzed through manual computation in order to draw

conclusion and recommendation. Statistical tables were made with the

use of frequency distribution percentage weighted mean and the Likert

Scale.

The data analysis tool pack software was used to compute the T-

value and Person r-value.

Five Point Likert Scale

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Service Quality of Our Lady of Fatima ad Credit Cooperative in

Marulas, Valenzuela City as Perceived by the Members used five (5)

point Likert Scale indicated as follows Legend:

1-Very Ineffective 4- Effective

2- Ineffective 5- Very Effective

3- Moderately Effective

The use of percentage frequency distribution, which is an

organized tabulation/graphical representation of the number of

individuals in each category on the scale of measurement. It allows the

researcher to have a glance at the entire data conveniently

(Manikandan, 2011). The percentage frequency of distribution will

evaluate the profile of the students.

%= x 100

Where: % = Percentage

f = frequency of number of observation

s = number of samples
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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Another statistical tool, the weighted mean it is a type of mean

that is calculated by multiplying the weight (or probability) associated

with a particular event or outcome with its associated quantitative

outcome and then summing all the products together (CFI Education,

2015). The observation in the data set is

WM

Where: ∑fx=Summation of the product of frequency

N=Total number of respondents

Lastly, Analysis of Variance (ANOVA) is a collection of methods

for comparing multiple means across different groups (Khan Academy,

2019).

Total df= N-1

Group df= k-1

Error df= N-k

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Where: Df= Degrees of freedom

N= Total number of population

K= Total number of Groups

To calculate the correction factor, the formula is

CF =

Where: CF = correction factor

Σx = summation of X

N = total population

To calculate Sum of Squares Total Value (SS total), the formula

is

SS Total = Σx2 – CF

Where: Σx2 = summation of x2

CF = correction factor

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

To calculate SS Group Value, the formula is:

SS Group = Σ – CF

Where: SS Group = sum of squares group value

n = number of panelists

Σx = summation of x

CF = correction factor

The formula for calculating SS Error value is

SS Error = SS Total – SS Group

Where: SS Error = sum of squares error value

SS Total = sum of squares total value

SS Group = sum of squares group value

The value of MS Group is calculated as follows

MS Error =

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Where: MS = mean square of error

SS Error = sum of square error value

df error = number of factors error

The formula for V.R. is

V.R =

Where: V.R. = variance ratio

MS Group = mean square of group

MS Error = mean square of error

Every statistical tools will help the researcher to evaluate the data

gathered and will provide table to interpret the data.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

CHAPTER IV

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

This chapter represents the summary of the data that researchers

got from the respondents. This study what to know what can the Our

Lady of Fatima Cooperatives can give in their members in terms of

service quality through their Responsiveness, Tangibility, Reliability,

Assurance and Empathy. The data gain from the questionnaire through

respondents will be having three parts.

The first part are the demographic profile of the respondents and

that includes the gender, age, civil status and the numbers of years

membership. The second part will show how effective is the service

quality rendered by the company to the members in terms of; Reliability,

Tangibility, Responsiveness, Assurance and Empathy. And lastly, the

third part will be showing if there is difference between the perception

of the members and the number of years membership.

1. PROFILE OF THE RESPONDENTS

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

TABLE 1

Gender Distribution of the Respondents

Gender Frequency Percentage

Male 38 41.30%

Female 54 58.70%

TOTAL 92 100%

Table 1 shows the percentage of the genders, which is the percentage

of the male is 41 percent or in number is 38, while the females

percentage is 58 percent or 54 which is the over total of 92 respondents.

The table shows that the female is greater than the male who answered

the research questionnaires.

TABLE 2

Age Distribution of the Respondents

Age Frequency Percentage

24 1 1.09%

27 1 1.09%

28 1 1.09%

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

29 1 1.09%

30 2 2.17%

31 1 1.09

32 1 1.09

33 3 3.26

34 3 3.26

35 2 2.17

36 4 3.35

37 3 3.26

38 4 3.35

39 6 6.52

40 4 3.35

41 5 5.43

42 3 3.26

43 4 3.35

44 2 2.17

45 4 4.35

46 5 5.43

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

47 3 3.26

48 4 3.35

49 2 2.17

50 1 1.09

51 3 3.26

52 3 3.26

53 3 3.26

55 3 3.26

56 1 1.09

57 1 1.09

58 2 2.17

61 2 2.17

62 1 1.09

63 1 1.09

TOTAL 92 100%

Table 2 shows that the age of the members in Our Lady of Fatima

Cooperative through the help of questionnaire is almost old enough to

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

manage their money and also the age having the most is in 33 years of

age to the age of 55.

TABLE 3

Civil Status of the Respondents

Civil Status Frequency Percentage

Married 66 71.74%

Single 26 28.26%

TOTAL 92 100%

Table 3 shows that the civil status of the 92 respondents is that

the married has the greater because it has 71% percentage or in

frequency is 66 and the single is having a 28% and garnering a

frequency of 26.

Table 4

Number of Membership by the Respondents

No. of Years Frequency Percentage

Membership

1 14 15.22%

2 19 20.65%

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

3 27 29.35%

4 13 14.13%

5 7 7.61%

6 7 7.61%

7 3 3.26%

8 2 2.17&

TOTAL 92 100%

Table 4 shows that the 92 respondents we gather is some of them

are new in saving in Our Lady of Fatima Cooperative, it indicates that

14 of our respondents is just having a year in OLFCOO garnering the

percentage of 15, the 19 of our respondents is just 2 years in saving

and garnering the percentage of 20, the 27 of our respondents is just 3

years of membership and gathering a percentage of 29%, the 13 of our

respondents is in 4 years of membership and garnering a percentage of

14%, the 7 of our respondents is in 5 years of membership and that is

having a percentage of 7%, another 7 of our respondents is a member

of it in 6 years and garnering a percentage of 7%, the 3 of our

respondents is a member of it in 7 years and having a percentage of 3%

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

and for the last 2 of our respondents is a member of it in 8 years and it

is just having a 2%.

2. How effective is the service quality rendered by the

company to the members in terms of; Reliability, Tangibility,

Responsiveness, Assurance and Empathy.

TABLE 1

I. Reliability

Indicators W. M Liker Scale

Perform service at right time 4.93 Very Effective

Maintaining error free records 4.76 Very Effective

Wide range of products and services provided 4.64 Very Effective

Insured for every transaction 4.66 Very Effective

Overdraft privilege on current accounts 4.63 Very Effective

OVERALL TOTAL OF WIEGHTED MEAN 4.72 Very Effective

Table 1 show that the indicator 1 “Perform service at right time” in

reliability got the highest weighted mean of 4.93 and a descriptive rating

of Very Effective while indicator 2 “Maintaining error free records”

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Obtained a weighted mean of 4.76 and having a descriptive rating of

Very Effective. Indicator 4 “Insured for every transaction” got a

weighted mean of 4.66 and a descriptive rating of Very Effective, next,

Indicator 3 “ Wide range of products and services provided” obtained a

weighted mean of 4.64 and a descriptive rating of Very Effective and

indicator 5 “Overdraft privilege on current accounts” got a lowest

weighted mean of 4.63 and still have a descriptive rating of Very

Effective. The over total weighted mean in Reliability is 4.72 and a

descriptive rate of Very Effective.

TABLE 2

II. Tangibility

Indicators W.M Liker Scale

Area is accessible 4.86 Very Effective

Lighting in the cooperative improves the 5.16 Very Effective

place

Modern looking equipment 4.24 Very Effective

Physical facilities are usually properly 4.73 Very Effective

maintained

Employees are well groomed 4.78 Very Effective

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Speed and efficiency in transactions 4.73 Very Effective

Cleanliness and orderliness of the place is 4.75 Very Effective

evident

OVERALL TOTAL OF WIEGHTED MEAN 4.75 Very Effective

Table 2 show that the indicator 2 “Lighting in the cooperative improves

the place” got the highest weighted mean of 5.16 and having a

descriptive rating of Very Effective while the indicator 1 “Area is

accessible” obtained a weighted mean of 4.86 and a descriptive rating

of Very Effective. The indicator 5 “Employees are well groomed“

obtained a 4.78 weighted mean and a descriptive rating of Very

Effective. Indicator 7 “Cleanliness and orderliness of the place is

evident” Obtained a weighted mean of 4. 75 and a descriptive rating of

Very Effective ,next, indicator 4 and 6 same obtained a 4.73 of weighted

mean and a descriptive rating of Very Effective, lastly the indicator 3

“Modern looking equipment” Obtained a 4.24 weighted mean and a

descriptive rating of Very Effective. The over total weighted mean in

Tangibility is 4.75 and a descriptive rate of Very Effective.

TABLE 3

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

III. Responsiveness

Indicators W.M Liker Scale

Availability of credits and favorable credits 4.39 Very Effective

Always willing to help 4.76 Very Effective

Satisfaction of quality service 4.24 Very Effective

Fast and efficient counter services 4.65 Very Effective

Dependability and handling member’s 4.25 Very Effective

service problems

Readiness respond to member’s request 4.77 Very Effective

OVERALL TOTAL OF WIEGHTED MEAN 4.51 Very Effective

Table 3 shows that the indicator 6 “Readiness respond to member’s

request” obtained a highest weighted mean of 4.77 and a descriptive

rating of Very Effective. Indicator 2 “ Always willing to help” obtained a

weighted mean of 4.76 and a descriptive rating of Very Effective while

the indicator 4 “Fast and efficient counter services “ obtained a weighted

mean of 4.65 and a descriptive rating of Very Effective. Indicator 1

“Availability of credits and favorable credits” Obtained a weighted mean

of 4.39 and a descriptive rating of Very Effective. Indicator 5

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

“Dependability and handling member’s service problems” Obtained a

4.25 weighted mean and a descriptive rating Very Effective. Lastly

indicators 3 “Satisfaction of quality service “ obtained a weighted mean

of 4.24 and a descriptive rating of Very Effective. The over total

weighted mean in Responsiveness is and a descriptive rate of Very

Effective.

TABLE 4

IV. Assurance

Indicators W.M Liker Scale

Have the knowledge to answer the 4.31 Very Effective

question

There is the provision of CCTV 4.39 Very Effective

surveillance camera.

The security and safety of the cooperative 4.07 Effective

is evident

OVERALL TOTAL OF WIEGHTED MEAN 4.26 Very Effective

Table 4 shows that the indicator 2 ”There is the provision of CCTV

surveillance camera.” Obtaining 4.31 weighted mean and a descriptive

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

rating of Very Effective while indicator 1 “Have the knowledge to answer

the question” obtained a weighted mean of 3.31 and a descriptive rating

of Very Effective. Lastly, indicator 3 “The security and safety of the

cooperative is evident” obtained a weighted mean of 4.07 and a

descriptive rating of Effective. The over total weighted mean in

Assurance is 4.26 and a descriptive rate of Very Effective.

TABLE 5

V. Empathy

Indicators M. W Liker Scale

Convenient operating hours to all its 4.41 Very Effective

member

Understand specific needs 4.39 Very Effective

Lower service charge 4.43 Very Effective

Confidentiality of cooperative 4.10 Effective

OVERALL TOTAL OF WIEGHTED MEAN 4.33 Very Effective

Table 5 shows that the indicator 3 “Lower service charge” obtained a

weighted mean of 4.43 and a descriptive rating of Very Effective. The

indicator 1 “Convenient operating hours to all its member” obtained a

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

weighted mean of 4.41 and a descriptive rating of Very Effective. The

indicator 2 “ Understand specific needs” obtaining a weighted mean of

4.39 and a descriptive rating of Very Effective. Last, indicator 4

“Confidentiality of cooperative” obtained a weighted mean of 4.33 and

a descriptive rating of VERY Effective

3. Significant Difference

Significant difference between the perception of the members

and the number of years of membership?

Anova: Single
Factor

SUMMARY

Groups Count Sum Average Variance

Column 1 92 410.96 4.466956522 0.043757668

Column 2 92 1692.23 18.39380435 74.08763482

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 8922.026157 1 8922.026157 240.7084464 3.87782E-35 3.893060776

Within Groups 6745.956716 182 37.06569624

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

Total 15667.98287 183

The following data indicates the results of computing the

perceptions of the members and the number of years of membership.
In the table shown above f value is 240.7084464 and the f critical
value is 3.893060776, making that the f value is greater than f critical
value

Overall, the null hypothesis is rejected and the alternative

hypothesis is accepted.

LEGEND OF LIKERT SCALE

Rate Interpretation Symbol

4.21-5.0 Very Effective 5

3.41-4.20 Effective 4

2.61-3.40 Moderately Effective 3

1.81-2.60 Ineffective 2

1.0-1.80 Very Ineffective 1

CHAPTER V

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

In this chapter, the researchers presents their insights and

interpretation based on the outcome produced. The following discusses

the major findings, the conclusions drawn and recommendations made

to include in our study.

SUMMARY OF FINDINGS

The following are the important findings to the study:

1. The Profile of the Respondents

Students who answer the questionnaire is mostly female

which is 54 or 58 percent while the male percentage is 41

or 38 percent in population and their age is ranging to 24 to

63 years old. Most of the respondents are married were the

frequency is 66 and a percentage of 71 while the single are

26 in frequency and 28 percent in percentage. The Number

of years of membership on what we gather is that it is 1 to

8 years

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

CONCLUSIONS

Base on the findings, conclusion were drawn majority of members

are females who belonged to 30 years old and above age bracket, are

married and were already members for 3 to 8 years above

The level of effectiveness on the quality dimension was more in

tangibility, followed by the reliability, responsiveness, assurance and

less is empathy but it was all generally rated as very effective.

RECOMMENDATIONS

1. Our Lady of Fatima Credit Cooperative ( OLOFOCCo ) in Marulas,

Valenzuela City should maintain good quality service to satisfy the

members continuously.

2. The management needs to have a regular evaluation regarding the

costumer service training program to maintain it’s effectiveness.

3. The management should observe the efficient and constant

supervision of the employee to maintain the good impression of the

customer.

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 OUR LADY OF
LOURDES COLLEGE
5031 GEN T. DE LEON,
VALENZUELA CITY

4. The researchers recommend that the management should provide a

promotional advertisement to become a well known cooperative not only

in Valenzuela but also in nearby places.

5. There should be an implementation of feed backs from the members

and customers for improvement. The researchers recommend that the

management should provide a suggestion box.

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