Predicting Overseas Filipino Workers' (OFWs) Decision in Obtaining Bank Loan Using Binary Logistic Regression Analysis

Abstract

The objective of the present study is to ascertain the factors influencing an OFW in availing of bank loans. Furthermore, it aims to evaluate whether the perception of the identified factors predicts their decision to seek a loan from a bank. The study is quantitative research utilizing a descriptive-evaluative design. It used self-constructed questionnaires in the data gathering which underwent and passed validation and reliability test. The obtained sample size (n=157) was computed using EPV and was further validated by the “a priori” result of the G-Power analysis.  The obtained computation was then complied with by randomly sending the research instrument to the population of the OFWs across the regions of the Kingdom of Saudi Arabia (KSA) using a combination of stratified sampling and exponential non-discriminative snowball sampling technique. Distribution of questionnaires was administered using an online platform survey – Qualtrics™. It used frequency counting, weighted mean, and z-test through binary logistic regression in the analysis of data. Findings revealed that interest, collateral, loan size, payment scheme, requirements, service attitude, promotion, advertisement, convenience, and loan procedure influenced the decision of OFW to obtain a bank loan. However, when these data were regressed to a dichotomous dependent variable, it revealed that only the variable collateral and loan procedure significantly predicted their decision to obtain a loan from the bank.