Clients' preference for a salary loan provider : a conjoint analysis

Abstract

The study aimed to determine the clients’ preference for a salary loan provider in Digos City. A quantitative non-experimental causal method was used in the study with 200 existing and 200 prospective salary loan clients as the respondents. Conjoint analysis was the statistical tool used for the data treatment. Results showed interest rate is the most important attribute with regards to relative importance. Individually and aggregately, the study revealed that the most important attribute for existing and prospective salary loan clients is still the interest rate. Furthermore, the most preferred attribute combination for both existing and prospective salary loan clients is a salary loan provided by a bank with one-month payslip required, processes loan application within the day, charges 0.5 to 1% interest rate and payable within 24 months. The least preferred combination for existing clients is a salary loan offered by a government fiduciary institution that requires three months of payslip, processes loan application within 10 to 15 working days, charges 2% interest rate and payable within 24 months. For prospective salary loan clients, the least preferred combination is a salary loan provided by a bank, with one-month payslip required, processes loans within a week, charges 2% interest rate and can be paid within six months. Keywords: business administration, salary loan, preference, conjoint analysis, Philippines