Debt Burden from Loan Sharks: Impacts on The Sustainabiltiy of Sari-Sari Store In Digos City

Abstract

Many sari-sari store owners continue to rely on loan sharks due to the simplicity and speed of the borrowing process. However, reliance on loan sharks can be challenging, as the burden of high-interest debt often strains both household finances and day-to-day business operations. This financial difficulty can threaten the well-being of owners and the sustainability of the business. Thus, this study aimed to evaluate the debt burden from loan sharks and its effect on the sustainability of sari-sari stores. This study employed a descriptive-quantitative research design using an adapted standardized questionnaire, which was distributed to 350 sari-sari store owners who had taken loans from loan sharks. Stratified sampling was employed when selecting participants from different barangays within Digos City. The findings revealed that the overall level of sacrifices experienced by sari-sari store owners due to debt burdens from loan sharks was moderate, indicating that respondents could manage loan repayment obligations but with necessary adjustments in their daily living and financial priorities. Meanwhile, sustainability challenges were deemed high in inventory- and customer related challenges. The correlation analysis revealed a weak relationship between debt burden and business sustainability, with a small but significant relationship in customer-related challenges. The researchers recommend improving access to financing, enhancing financial management, and addressing customer-related challenges.