THE IMPORTANCE OF FINANCIAL LITERACY BY: BRYAN L. TAN NERY
Since time immemorial, credit risk has been one of the major risk that can possibly rise up in a lending institution and in businesses. Even from small scale lenders such as individuals, credit risk can also become a problem. Nevertheless, one must find ways, techniques, and strategies to manage possible effects that may arise thatâ€™ll surely affect the expected result from a given investment of a business. As stated by Pandey, 2015, lending institutions provides credit to borrowers who are left out of the sophisticated formal financial statement. Borrowing is common to households in Bukidnon. People borrow small amounts for food and other household items. People also borrow in times of emergency, such as for medical care, childrenâ€™s school fees, and celebrations like weddings. Since Malaybalay City is part of Bukidnon, this rising problem can also affect the growth of its economy. Borrowing money has been a usual attitude of Filipinos. They borrow money to finance their daily needs in order to survive. As observed in Malaybalay City, lending institutions, neighborhoods, and relatives has been their common lending option. Thereafter, borrowers approach recognized community loan providers, such as
professional moneylenders, especially if they have borrowed from these sources in the past. Before, the value of a peso is already big that can already buy enough needs for families living in this simple society. In the present day, the value of peso has decreased which resulted to the idea of lending money to those people thatâ€™s in need. The phenomenon has grown popular all over the country. Due to this rising phenomenon, the risk troubling the business has also been in line. Credit risk is identified by most of the individual and other institution as well. According to financial expert the need for financial literacy is the best solution in this problem. The status of life is not an issue but it is how we handle our wealth in accordance to our needs, we should know our needs and wants in order to set our priorities.
The importance of financial literacy