THE LENDER OF LAST RESORT: UNDERSTANDING THE DEBT DEPENDENCY OF HAGONOY RICE FARMERS ON LOAN SHARKS FOR CAPITALIZATION
Abstract
In the agricultural sector, rice farmers face financial distress due to volatile market conditions and high operational costs, leading them to borrow from high-interest sources like loan sharks frequently. This study aimed to explore the pivotal moment that led to their dependence on loan sharks, their struggles, and coping mechanisms and to attain a thorough understanding of their lived experiences. This study used a phenomenological approach to assess the perceptions and experiences of an individual. The 12 participants are selected using snowball sampling and undergo an in-depth individual interview. Moreover, the thematic analysis was utilized to identify participant similarities and differences. This study determines that rice farmers in Hagonoy, Davao del Sur, have financial difficulties due to the lack of cash, prompting them to resort to loan sharks for unsecured loans since they are easy to access, emphasizing their financial exclusion. The rice farmers face high interest rates, financial struggles, debt burdens, constant debt cycles, dependency, limited options, emotional stress, and uncertainty. Gradually, they established coping techniques based on resilience and hard work, persistence and determination, financial management and planning, and community and government support. Hence, this study implies that the government may establish accessible financing organizations with obtainable terms to support farmers while also ensuring the transparent distribution of financial assistance, fair pricing, and fostering of agriculture's role in economic development.
JEL: Q14, Q15, D14, G51, G23, O17
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DOI: http://dx.doi.org/10.46827/ejefr.v8i7.1869
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