CHAPTER 4

PRESENTATION OF RESULTS AND DISCUSSION

MARKET STUDY

This chapter provides quantitative information that will reflect the status

of the market in the area of the projected business. It includes the products

and services to be offered, the market research analysis, which explains the

target market, the market size and trends, the competition, estimated market

share, and the marketing strategies, which include the sales and production,

the pricing strategy, and the promotion strategy.

A. Industry Analysis

The Five Forces Model by Michael Porter was used to analyze the

cooperative business in Saint Louis College.

1. Threats of New Entrants. According to the By Laws of a credit

cooperative, it shall be composed of fifteen (15) cooperators with a

minimum paid up capital of fifteen thousand pesos. It is then deemed

that the barriers to entry are high and threats to new entrants are low

because the application of establishing a cooperative in Saint Louis

College is subject to the approval of the school’s President.

2. Bargaining Power of Suppliers. There is no bargaining power of

suppliers since the loan capital will come from the cooperators.
3. Bargaining Power of Buyers. Buyers have limited negotiating power

because borrowers are unable to impact the predetermined interest rate

and service charge for the micro-loans they intend to obtain.

4. Threats to Substitute. The potential for substitute options is high

because students have various alternatives for obtaining loans. These

alternatives include lending institutions, microfinance organizations,

cooperatives, individual lenders, family and friends, pawnshops, banks,

and other financial institutions.

5. Rivalry among Existing Competitors. The competition among existing

competitors would be considered moderate as there is no direct

competitor and there are only few indirect competitors.

Figure 1
Porter’s Five Forces Analysis
 B. Competitor Analysis

The proposed business caters Business Administration Students in

Saint Louis College and currently do not have any direct competitors.

C. Customer Analysis

The target market of Kaagapay sa Edukasyon Credit Cooperative are

students enrolled in Bachelor of Science in Business Administration (BSBA)

program in Saint Louis College, who need financial assistance in their

personal and academic needs. Most of the students depend only on their

allowance provided by their parents or guardians and some of them lacks

the capability to access the services of common financial institution. Based

on the results of the survey, most of the respondents save money in banks

and borrow money from their relatives, friends, and neighbors.

Furthermore, 58.82% are willing to be a member of the cooperative to avail

its services while 41.18% are not willing to join the cooperative. The high

percentage of willingness over the unwilling respondents indicates an

advantage for the business.

D. Service Description

a. Name of the Business

Kaagapay sa Edukasyon Credit Cooperative is the name of the

cooperative that offers financial assistance by lending money at low interest

rate to students who are struggling from academic expenses. The word

“kaagapay” is a tagalog word which means support or assistance, and

“edukasyon” which is the main purpose of establishing credit cooperative

and which also pertains to students.

The logo was made with the name of the proposed business,

Kaagapay sa Edukasyon Credit Cooperative, as agreed upon by the

proponents. “Kaagapay” is a Filipino word meaning support or someone that

helps in difficult situation and “Edukasyon” is the Filipino term for

education. These terms will be manifested on the services to be offered for

this cooperative will ease the financial burden of every student that needs

assistance on the matters concerning their monetary undertakings.

Figure 2

Business Logo

b. Name of the Service

The credit cooperative will offer depository activities such as fixed

deposit savings and withdrawable savings, and cash loan to the students of

Saint Louis College enrolled in Business Administration.

c. Major Users of the Service

Kaagapay sa Edukasyon Credit Cooperative will be offered to the

Bachelor of Science in Business Administration (BSBA) students under the

College of Commerce, Secretarial and Accountancy (CCSA) at Saint Louis

College, City of San Fernando, La union. The major users will be the BSBA

students of Saint Louis College.

d. Uses and Benefits of the Service

Savings and credit are essential aspect of personal finance. It

promotes independency in financial aspect and dependency during trying

times. The cooperative will offer these two services in which students can

acquire to help them on their financial needs.

Kaagapay sa Edukasyon Credit Cooperative will provide financial

assistance to its members. The members can borrow money from the

cooperative and they will be able to save through their profits from the

cooperative. In addition, the cooperative offers loans with a 5% interest per

3-month term on the principal amount, to help them with their finances at

school and to avoid loan seekers from borrowing money to money lenders

who charges 10-15% weekly or monthly interest on the loan which is very

high. Moreover, this will become the first student cooperative established in

the Province of La Union thus, it will serve as the pioneer of such

organization and an underlying solution to the aging population of

cooperative officials. This business will encourage youth involvement since it

 will be managed by students who give importance to the prevailing problems

in the community. It is not only a matter of providing privilege to them

rather they will be the key driver in resonating success and inclusivity in

the society.

e. Geographical Area of Dispersion

The credit cooperative will be offered to the Business Administration

Students of Saint Louis College. Kaagapay sa Edukasyon Credit Cooperative

(KECC) will be located inside the campus of Saint Louis College because it is

where the target market is situated.

E. Demand Analysis

The main market of the proposed cooperative shall be the students of

Saint Louis College taking up Business Administration program which will be

the members of the cooperative.

Table 2 shows the historical population of students enrolled during

short-term in Saint Louis College. (See Appendix A1 to see the breakdown of

short-term enrollees in SLC).

Table 2

Historical Population of Short-Term Enrollees in Saint Louis College

School Year Total Enrollees

2019 188
2020 129
2021 253
 2022 230
2023 186
Source: Office of the Registrar, Saint Louis College-City of San Fernando

Table 3 shows the projected population of short-term enrollees in Saint

Louis College. It is computed through the four Mathematical Methods. Based

on the historical population, the projected demand is derived using the

Statistical Parabolic Method. Moreover, it shows a declining number of

enrollees during the short-term period that stems from the possible changes of

academic curriculum on the next five years. (See Appendix C for the supporting

computations of the following values.)

Table 3

Projected Population of Short-term Enrollees in Saint Louis College

Year Projected Population

2024 108
2025 20
2026 -95
2027 -235
2028 -402

Table 4 shows the projected members of the cooperative. The value in the

first year was derived from the projected population of short-term and the

willingness of the students to become a member which is the item under

Question number 13 in the survey questionnaire. The data gathered shows

that ninety (90) out of one hundred fifty-three (153) or 58.82% wants to become
a part of the association. KECC will cater the whole Business Administration

program not just the enrollees of the short-term period. In this regard, the

researchers only considered the projected population for the year 2024 and

multiply it from the willingness of the respondents prior to their voluntary

membership. For the succeeding years, a constant increase of 20% from the

beginning year shall be appropriated because the cooperators will strive to

encourage the students, especially those enrolled in the regular terms, through

their marketing efforts in order to widen the reach of the proposed cooperative.

(See Appendix C.5 for the computations of the projected members)

Table 4

Projected Members of the Cooperative

Year Projected Members

2024 64
2025 77
2026 92
2027 110
2028 132

Table 5 shows an increasing demand for the different services of the

cooperative in the next five (5) years. It is computed by multiplying the

projected members and the respective percentage of individuals patronizing the

following services similar to the plans of the cooperative to offer. There was

ninety-nine (99) or 64.71% of the respondents who saves money while fifty-five

(55) or 35.95% among them are borrowing money from different sources.
Moreover, the availments are derived from the product of average annual

consumption for both services and the projected members of the cooperative.

(See appendix B.2 to B.6 for the computations of consumption rate and average

annual consumption for both services). However, the fixed deposit shall be

mandatory for all the members because their payments will form part of their

capital.

Table 5

Projected Demand for Cooperative Services

Projected Projected Projected

Withdrawable
Year Demand of Demand of
Savings
Demand Cash Loan
Fixed Withdrawable of Cash Availments
Availments
Deposit Savings Loan
2024 64 41 2228 23 92
2025 77 50 2674 28 110
2026 92 59 3208 33 132
2027 110 71 3850 40 158
2028 132 86 4620 48 190

F. Supply Analysis
There is a cooperative of the institution named Saint Louis Credit

Cooperative however; they are more focused in providing services to the

employees of the school. KECC is exclusively, in the meantime, for the students

of Business Administration department. Thus, the competition will not be stiff

because there will be no direct competition from other credit cooperatives.

Nevertheless, banks, loan sharks, e-wallets, and the relatives, friends, and
neighbors of the students will be considered as indirect competitors of the

cooperative.

G. Demand-Supply Analysis
The interplay of demand and supply in the market influences the process

of achieving business growth. This will provide the data regarding the

unsatisfied demand in the market.

Table 6 and 7 shows the market share of the proposed cooperative

considering its depository activity and cash loan. To get the following values,

the projected values for both services will be multiplied to the percentage of

market share. It shows the members that will be catered by the cooperative.

Table 6

Market Share for Withdrawable Savings

Projected Projected Estimated Market Share

Demand of Supply of Market Share for
Unsatisfied
Year Withdrawabl Withdrawable for Withdrawable
Demand
e Savings Savings Withdrawable Savings
(availment) (availment) Savings (availment)
2024 2228 0 2228 100% 2228
2025 2674 0 2674 100% 2674
2026 3208 0 3208 100% 3208
2027 3850 0 3850 100% 3850
2028 4620 0 4620 100% 4620

Table 7
Market Share for Cash Loan
Year Projected Projected Unsatisfie Estimated Market
Demand of Supply of d Demand Market Share for
 Share for
Cash Loan (availment Cash Loan
Cash Loan Cash
(availment) ) (availment)
Loan
2024 92 0 92 100% 92
2025 110 0 110 100% 110
2026 132 0 132 100% 132
2027 158 0 158 100% 158
2028 190 0 190 100% 190

H. Price Study

The researchers interviewed the indirect competitor to know their

interest rates and service charge. Table 8 and 9 shows the similar services

offered by the indirect competitor of the proposed business.

Table 8

Indirect Competitor for Withdrawable Savings

Minimum Savings
Who can
Name of Business Deposit Interest Rate
Avail
(Withdrawable)
Faculty and
Saint Louis College
Staff of Saint Php 10,000 1% (quarterly)
Credit Cooperative
Louis College

Table 9

Indirect Competitor for Cash Loan Service

Initial
Name of Interest Service
Who can Avail Fixed
Business Rate Charge
Deposit
Saint Louis Faculty and 2% of the
Php 500 (5 1%
College Credit Staff in Saint principal
shares) (monthly)
Cooperative Louis College amount
 Table 10 shows the suggested deposit amount and interest rate of the

savings services of KECC.

Table 10

Withdrawable Savings of Kaagapay sa Edukasyon Credit Cooperative

Minimum Savings
Name of Who Can
Deposit Interest Rate
Business Avail
(Withdrawable)
BSBA
Kaagapay sa 1% annually (if
students in
Edukasyon Credit Php 100 the savings is not
Saint Louis
Cooperative below Php 1,000)
College

Table 11 contains the interest rate and service charge of Kaagapay sa

Edukasyon Credit Cooperative.

Table 11

Cash Loan of Kaagapay sa Edukasyon Credit Cooperative

Who Initial Price

Name of Interest Service
Can Fixed per
Business Rate Charge
Avail Deposit Share
BSBA
Kaagapay sa student
2% of the
Edukasyon s in Php 500 5% per 3-
Php 100 principal
Credit Saint (5 shares) month term
amount
Cooperative Louis
College

I. Factors Affecting the Market

a. Demand

1. Number of Cooperative

An organization that solely caters students is a growing demand

since most of the established cooperative focuses on income-earner

individuals. The vicinity where the proposed cooperative will be

established has no existing student-centered credit cooperative. A

growing population of learners can be associated to a larger pool of

membership since it will be the first cooperative catering these group of

individuals.

b. Loan Terms, Conditions, and Charges

The service will provide customers with loan terms and conditions that

offer flexibility, which may be perceived as more favorable compared to other

credit cooperative. This factor has the potential to affect the demand for the

proposed business. The business will provide lower interest rate than its

indirect competitor that can be a factor of a high demand. However, if interest

charges increase, it will decrease the demand. In addition, if there is a new

entrant that would offer lower interest rate that could lead to lower market

share of the business.

c. Supply

1. Presence of Indirect Competitor

 In Saint Louis College, there are other cooperative services that

can be considered as competitors to the proposed business. However,

since the proposed business specializes in credit cooperative exclusively

for BSBA students, it provides uses and benefits that can be

advantageous for customers. Consequently, this could have an impact on

the demand for the service.

2. Profitability

The supply of the proposed business will be influenced by its

profitability and its capacity to generate sufficient income. An increase in

profits and retained earnings will also enhance the availability of funds

for credit cooperative.

3. Repayments of Loans

The consistency of customers in borrowing money and penalties

from delayed payments of their loans will have an impact on the supply.

This factor ensures the continuous flow of funds that can be lend out

again.

4. Economic Conditions

Economic factors, including GDP growth, inflation, and market

stability, can significantly affect the supply market. During economic

downturns or periods of instability, the availability of funds for credit

cooperative will be influenced.

J. Marketing Program

Marketing program is an essential aspect necessary for the growth of the

business venture. It helps in achieving the objectives of the business for this is

a way of establishing an image and position in the market because the sole

purpose of it is to attract the prospective customers.

a. Service

The cooperative offers two major services to its members; short-

term cash loans and depository services. The cooperatives’ depository

service is a money placed for safekeeping which earns a 1% interest

annually and can be withdrawn anytime. However, the money saved

will only earn from the 1% interest if the savings is not below Php

1,000. Moreover, the proposed business will provide reasonable and

favorable rates on both deposits and credit operation.

1. Cash Loan

Cash loan will be offered through a three-month loan term and

a 5% interest per term will be imposed.

Policies for credit loan:

I. Who can avail?

The cooperative aims to provide credit services to Business

Administration students in Saint Louis College to address their

financial needs. However, to protect the capital, this service will

 only be offered to members with good credit-worthiness and shall

also be based on the member’s paid-up capital or his or her fixed

deposit. Provided below are the requirements needed to avail the

service:

1. The applicant must be a student enrolled in the Business

Administration Department and must be of legal age.

2. The borrower has fully paid the minimum share of Php

500 (5 shares).

3. The borrower has not violated any provision of the by-

laws.

II. Loan Limits

The members are entitled to borrow a minimum amount of

Php1,000 and a maximum amount of Php3,000 per term.

III. Interest, Charges, and Penalties

The cooperative shall collect a service fee of 2% of the principal

amount. The interest rate is 5% per term of the principal amount.

Additionally, if the member does not meet the due date of the loan, a

penalty of 1% from the remaining balance shall be imposed.

IV. Renewal of Loan

Loan may be renewed if the previous loaned amount has been paid

or at least 75% of the loan has already been paid.

V. Security

Mandatorily, a member pledges his or her deposit and share

capital to secure their loan.

VI. Approval of Loan

As an initial process, the application will undergo certain

procedures such as assessment and verification by the assigned officer.

The manager will approve the loan and it will be released a day

after the application if only all the necessary requirements were

submitted and verified.

2. Savings

The cooperative offers two kinds of savings: the share capital

and the savings deposit.

a. Fixed Deposit Savings

The initial investment serves as the savings deposit of every

member. It will earn dividends every year to be distributed among

the members who subscribed the share capital required. The

applicant must pay the minimum shares required to become a

member which is Php500.00 (5 shares, Php100 each). A fixed

deposit amounting to Php100 (1 share) can be paid every month

until the member reaches the maximum share capital allotted for

him or her to be subscribed. This type of savings, particularly the

 percentage of share capital subscribed, will be the basis of the

dividend to be distributed annually.

b. Regular Savings Deposit (Withdrawable)

The savings deposit is a money placed for safekeeping. This

type of savings deposit can be withdrawn anytime. It will earn

interest annually based on the money saved by the member.

However, it can only earn an interest if the money deposited is

above Php 1,000.

Policies for Regular Savings Deposit (Withdrawable)

1. The applicant must be a student enrolled in the Business

Administration Department and must be of legal age.

2. The applicant must be a member of the cooperative.

3. The member must deposit a minimum amount of savings

amounting to Php 100.

4. The member can earn 1% interest annually based on the savings of

the member.

5. It can only earn 1% interest if it does not fall below Php 1,000.

b. Place

Kaagapay sa Edukasyon Credit Cooperative will be located inside

the campus of Saint Louis College. It is within the school premises

because the target market is the BSBA students wherein the accessibility

and convenience on their part are guaranteed.

 c. Promotion and Advertising

Kaagapay sa Edukasyon Credit Cooperative will be the first organization

catering solely the Business Administration students of the institution. Since

this is a way of helping the cooperative achieve their goals, values, vision, and

mission, it is imperative that advertisement must be incorporated to establish

their desired market position. Combination of the traditional and modern way

of advertisement will be employed to maximize the marketing and sales of the

propose cooperative and ensure awareness of its prospect members. Print

advertisement such as tarpaulin and flyers will be used in congruence with

social media and word of mouth. In addition, seminars will be scheduled prior

to the acceptance of new members and in collaboration with the different clubs

under the business administration program.