MOTORCYCLE CREDIT SYSTEM

IN BANGUED, ABRA

A Baby Thesis Presented to the Faculty of the

Business Education Department of the
Divine Word College of Bangued,
Bangued, Abra

As Partial Fulfillment of the Requirements

for the Degree Bachelor of
Science in Business
Administration

Rey M. Sario
Kristine R. Bolante
Angelica O. Azarcon
Kenneth Kristel Donne V. Beleno
Geramy R.Terredaño
Criselda O.Ortega

April 2010
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CERTIFICATION

The baby thesis entitled “MOTORCYCLE CREDIT SYSTEM IN BANGUED, ABRA”

prepared and submitted by REY M. SARIO, KRISTINE R. BOLANTE, ANGELICA O.

AZARCON, KENNETH KRISTEL DONNE V. BELENO, GERAMY R. TERREDAÑO,

and CRISELDA O. ORTEGA as partial fulfillment of the requirements for the degree

Bachelor of Science in Business Administration.

VICTORIA B. VALEROS, DPA

Adviser
 iii

APPROVAL SHEET

The Baby Thesis entitled: “MOTORCYCLE CREDIT SYSTEM IN BANGUED,

ABRA” prepared and submitted by REY M. SARIO, KRISTINE R. BOLANTE,

ANGELICA O. AZARCON, KENNETH KRISTEL DONNE V. BELENO, CRISELDA O.

ORTEGA, and GERAMY R. TERREDAŇO as partial fulfillment of the requirement for the

degree Bachelor of Science in Business Administration is hereby approved and accepted by

the Panel of Examiners on Oral Examination with a grade of ___________.

NELLIE JANE M. ASTUDILLO, MBA ROLANDO A. MILLARE, MBA

Member Member

RODELMA T. BRINGAS, DBA

Chairman

Accepted and approved in partial fulfillment for the degree Bachelor of Science in

Business Administration.

LETICIA P. MADRIAGA, Ed.D

Dean of Academic Affairs

Date
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ACKNOWLEDGEMENT

This study was done successfully because of the love, support, care, understanding and

guidance from different persons and the researchers would like to convey their heartfelt thanks

to:

-their research adviser, Dr. Victoria B. Valeros, for her unending patience and valuable

time in giving assistance and sharing her knowledge needed for the accomplishment of this

study.

-their respondents especially the owner and manager of DPMC, KSERVICO,

MOTORSTAR, MOTORTRADE, NORKIS, ROPALI and U_EXCEL for their patience,

kindness, and willingness to impart their knowledge by answering the questionnaires,

-their parents who gave them full support

-their friends and classmates who gave their pieces of advice and extend their helping

hands whenever needed

-Above all, the Almighty God who made all these possible.

Rey M. Sario
Kristine R. Bolante
Angelica O. Azarcon
Kenneth Kristel Donne V.
Beleno
Geramy R.Terredaño
Criselda O.Ortega
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DEDICATION

This research is heartily and lovingly dedicated to our loving parents, brothers, sisters,

relatives and friends. Most specially dedicated to our energetic professor, Dr. Victoria B.

Valeros, who guided and inspired us in the fulfillment of this research.

Above all, this research is dedicated to the Almighty God for his continuous guidance,

protection and blessings to us.

Rey M. Sario
Kristine R. Bolante
Angelica O. Azarcon
Kenneth Kristel Donne V.
Beleno
Geramy R.Terredaño
Criselda O.Ortega
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TABLE OF CONTENTS

PAGE

Title Page ………………………………………………………………….................... i

Certification ...…………………………………………………………….................... ii

Approval Sheet ………………………………………………………........................... iii

Acknowledgement ………………………………………………………...................... iv

Dedication …………………………………………………………………................... v

Table of Contents ………………………………………………………....................... vi

List of Tables ….............................................................................................................. viii

List of Appendices ......................................................................................................... ix

Abstract............................................................................................................................ x

Chapter I THE PROBLEM

Introduction........................................................................................................... 1

Theoretical Framework.......................................................................................... 3

Conceptual Framework of the Study..................................................................... 5

Statement of the Problem........................................................................................ 7

Scope and Delimitations ........................................................................................ 7

Significance of the Study....................................................................................... 8

Operational Definition of Terms ............................................................................ 9

Chapter II RESEARCH METHODOLOGY

Research Design and Methodology.................................................................... 13

Population and Locale of the Study.................................................................... 13

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Data Gathering Tool............................................................................................ 14

Data Gathering Procedures ................................................................................. 14

Statistical Treatment of Data ............................................................................... 15

Chapter III PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

Profile of Motorcycle Companies in Bangued, Abra ......................................... 13

Policies of the Motorcycle Companies ................................................................ 16

Number of Clients and Client Defaults in a month ............................................. 19

Chapter IV SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

Summary of Findings ........................................................................................... 34
Conclusions .......................................................................................................... 36
Recommendations ................................................................................................. 37

REFERENCES ............................................................................................................... 25
APPENDICES
CURRICULUM VITAE
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LIST OF TABLES

Table Title Page

1 Distribution of Respondents 10

2 Profile of Motorcycle Companies in Bangued, Abra 14

3 Policies of the Motorcycle Companies 16

4 Number of Clients and Client Defaults in a month ` 20

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LIST OF FIGURE

Figure Title Page

1 The Research Paradigm 6

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ABSTRACT

The study seeks to understand the application of credit in motorcycle business, including

the factors relating to the credit system such us the profile of the business in terms of location,

capitalization, ownership type, models/brand of motorcycles for sale, client per month, defaults,

their marketing strategies. The researchers focused on the 7 motorcycle business in Bangued

which are existing 1 year in beyond. The respondents’ shared data and information is assumed

reliable which will provide the researchers an equitable analysis and interpretation of data,

conclusion and recommendations. The study helps the people in managing their finances and

investment decisions. For the researchers and students, they would be informed in the actual

application of what they are studying in their classrooms in the motorcycle business. Time

minimizing and for factual information to gather, a formulated questionnaire was used sustained

by a follow-up interview for some clarifications. The data or information gathered is analyzed

and interpreted using the frequency distribution and percentage distribution method.

Most of the motorcycle firms reside in Zone 7 and Zone 5 wherein most of business

establishment in Bangued can be found. There are 5 corporation and 2 sole proprietorship on the

respondents where in majority on\f them has an initial capitalization of 1.5M – 2.5M and has

been existing in the market 3 to 5 years and beyond. Majority of motorcycle companies are

having 16 – 25 clients per month but defaults is also ranging from 4 – 6 clients respectively.

100% of the firms are offering their customers a monthly basis of payment, at 36 months as

maximum term with 1 to 3 months grace period for default. Two of the motorcycle firms could
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offer a minimum down payment for as low as 3,000 below. The Motortrade companies are

offering their customers 1 – 10% interest compounded monthly.

The Honda brand is the most available in 7 identified brands of motorcycles the

different companies sold. To attract customers the establishments are giving warranty service to

engine and other parts of their product at 6 -12 months maximum period to avail. All of the

businesses are also doing an investigation to their client and requiring a guarantor or co-signee to

their installment contracts.

The motorcycle companies maintain their performance in the market at a high level

despite of limited capitalization. The branch that offers the lowest down payment interest has a

great number of clients on credit basis. Most of the motorcycles, the business are selling the

Japanese and Chinese brands.

The researchers strongly recommend the following: (1) the firms should increase their

capital to accommodate longer term credit. (2) Offer the lowest possible interest at the lowest

down payment and longer term of installment. (3) Some companies should lessen their credit

requirements.