DIMENSIONS OF FINANCIAL WELLBEING: AN ALTERNATIVE SCALE FOR MICROFINANCE BORROWERS IN DIGOS CITY, PHILIPPINES

Abstract

The aim of this study is to establish the dimensions of financial wellbeing of microfinance borrowers in Digos City. A sequential-exploratory mixed methods research design was used as the approach of the study, and data were gathered from N=10 key informant interviews which then became the basis in the development of the preliminary 30-item financial wellbeing scale. A total of N=377 lenders of microfinance institutions in Digos City participated in the cross-sectional online and face-to-face survey. Descriptive statistics and multivariate analysis via exploratory factor analysis were used as statistical tools, all carried in IBM-SPSS 20. Results revealed that 26 of the 28 items were found to have passed the +0.40-coefficient requirement. These 26 items clustered in five extracted dimensions. Thematic analysis of the item loadings revealed three valid dimensions – freedom from debt, investment and financial discipline, and financial resilience – all with acceptable Cronbach’s α and McDonald’s ω values. Implications of the utility of this alternative scale of financial wellbeing are discussed. JEL : D01; D31 Article visualizations: