Sustainability of Card Incorporated in the Philippines

Abstract

Microfinance is a vital economic services afforded to financially struggling individuals to increase tier income and enhancing their financial security, thereby improving their standard of living. It is a sustainable means of poverty alleviation designed to empower entrepreneurs’ to start and operate business, encouraging self-reliance and become a productive citizen to meet the challenges of the times. The CARD (Center for Agricultural and Rural Development) Inc. is a non-government organization, acknowledged to be the leader in microfinance industry in the Philippines and has evolved as an outstanding Microfinance Institution (MFI) with a near perfect repayment rate, which contributed to its financial viability as per global microfinance standards. The study sought to determine the financial sustainability of Card Incorporated as influenced by 1) Return on Assets (ROA), 2) Return on Equity (ROE), and 3) Debt to Equity Ratio (DTER), which are the independent variables of the study. On the other hand, the financial self-sufficiency ratio, a measure of an institution’s ability to generate sufficient revenue to cover its costs, which.is widely regarded as the best measure of the institutions’ financial performance serves as the dependent variable of the study. Needed data for this study were sourced from the website of the Card Incorporated and covered the periods 2007- 2016. Linear Regression Analysis was used to estimate and quantify the relationship between dependent and independent variable of the study. The statistical software GRETL (Gnu Regression Econometrics Time Series Library) was made use of to facilitate data management and computations of regression coefficients thru the OLS (Ordinary Least Squares) method.