Santiago Trillana Academy

Mabini St. San Sebastian Hagonoy, Bulacan

“ACCESS TO FINANCING”

Submitted to:

Mr. Aldrin Casyao

Submitted by:

De Leon, Shaira Ann C.

Del Rosario, Crisie Clariese

Perez, Hare Chrisna P.

Torres, Mary Atholyn DR.

(GROUP 7- 12 ABM/GAS/HUMSS)

September 19, 2024

I. IDENTIFY THE PROBLEM

An instance of inadequate access to financing is one in which people, companies, or

organizations find it difficult to secure the funding necessary to meet their objectives or
continue operating. The ability of people or businesses to get financial services, such as credit,
deposits, payments, insurance, and other risk management services, is known as access to
finance. Individuals who unintentionally lack or have restricted access to financial services are
known as underbanked or unbanked, respectively.

The following Issues could result in insufficient access to funding. First, because of
stringent lending guidelines, banks and other financial institutions may find it difficult to
extend credit or lines of credit to particular clientele, such as start-ups, small businesses, and
those with poor credit. Insufficient financial availability is synonymous with a weak credit
history. High interest rates are the second issue. If financing is available, it may come with
conditions that are not suitable for the borrower, such high interest rates that make repayment
difficult and expensive. The last factor is market and economic conditions. During recessions
or financial crises, lenders may tighten their lending standards, which would reduce credit
availability and make funding more difficult to get.

In conclusion, one area where there is an issue due to insufficient strategy is insufficient
access to financing. In order to address insufficient access to financing, regulatory changes,
financial literacy initiatives, enhanced financial services accessibility, and assistance for
marginalized communities are frequently combined to make sure that more individuals and
companies may obtain the funding they need.

II. GATHERING INFORMATION

The Philippines faces a significant obstacle in fostering entrepreneurship: inadequate

access to finance. This challenge hinders the growth of micro, small, and medium-sized
enterprises (MSMEs), which are crucial for the country’s economic progress. While financial
institutions, government programs, and emerging investors are working to improve access,
many entrepreneurs, struggle to secure the capital needed to launch, innovate, and expand their
ventures. Only 39% of MSMEs cited bank loans as source of funding, and personal funds
continue to be a dominant source. This lack of funding is a major barrier to business growth
and development, with many businesses forced to close due to insufficient financial support.
To put things into perspective, more than 80% of business failures are due to a lack of cash,
20% of small businesses fail within a year, and half fail within five years.

A survey by Avon found that lack of finances and confidence were the top reasons
Filipinas held back from starting their own businesses. The survey, which included over 7,000
women across seven countries, revealed that 61% of respondents cited finances as the primary
obstacle to starting their own businesses.

III. ROOT/CAUSES OF THE PROBLEMS

Inadequate access to financing is a financing issue in which a businessman or

entrepreneur cannot provide sufficient funds or resources or cannot achieve financial loans and
services. The many roots or causes would be:

• Financing Illiteracy and Insufficient Financing Awareness: A lack of knowledge

and understanding of various financial services is required to comprehend access to financing
and its importance.

• Low Income Levels: Individuals, particularly small enterprises, have difficulties

since some financial services or institutions consider them unprofitable and unworthy of their
attention.

• Low Self-Confidence: People with low self-confidence are unwilling to take the risk
of obtaining money, which is why they are lacking and could hinder what they are attempting
to initiate in order for their business to grow.

• Social Discrimination: Different ethnic backgrounds, religions, or other

characteristics may result in unequal access to financing.

• Unpaid Bills: Poor creditworthiness may make one unattractive to lenders, banks,
credit unions, and investors.

These various causes of inadequate access to financing could affect meeting basic
necessities (such as utilities, rent, and so on) of a brand, resulting in a business or enterprise’s
inability to grow and expand over time.
IV. BRAINSTORM SOLUTIONS

A multifaceted strategy incorporating several solutions is needed to address the issue

of inadequate access to financing.

1. Social Fundraising

Social fundraising, is the practice of asking friends and family to contribute money to
a cause that matters to them, as opposed to the cause making the direct request. It’s comparable
to a friend requesting that you donate to a cause they strongly believe in. Through social media,
it can reach a larger audience and is more intimate.

Pros:

1. Access to more volunteers. The influence of social media can easily grant
convenience and accessibility to more individuals and secondary groups with the
prevalence of technological advancement today, making communication more
probable and efficient in looking for volunteers and donors.
2. Increased visibility and awareness. Sharing causes and online campaigns through
various social media platforms may reach and then encourage unaware individuals
to participate.
3. Cost-effectiveness. Social fundraising can be inexpensive as it does not need
physical materials and transportation services. Taxes for transmittal fees are also
minimized.
4. Virality and trendy. If the fundraising is successful, the momentum is sustained and
the faster it’ll spread throughout the internet.

Cons:

1. Competition. The plenty of fundraisers online due to the amount of people utilizing
the platform, making it difficult to stand out and get support.
2. Donor Fatigue. The more people donate to certain organizations, the more tired they
become of doing so. This can affect donors by restraining their selves to contribute.
 3. Trust issues and credibility concerns. Scams and fraudulent practices are inevitable
in today’s society, causing them to doubt and worry about where the money is going
or if the organization itself is credible and trustworthy.
4. Limited reach. Not everyone, especially people that are unfamiliar with technology
use social media which may affect the engagement level and awareness of the
fundraising program.
2. Grants

Grants provide initiatives with unrestricted funding, whereas contests give rewards for
winning.

Pros:

1. Provides financial assistance that are non-repayable that can significantly reduce
financial burden and provide debt relief.
2. In favor of projects that deals with debt and financial obligations from lending
institutions.

Cons:

1. Grants can be limited and exclusive depending on eligibility and availability of

funds/slots, making them harder to secure. Some grants are also non-renewable and
do not support long-term funding.
2. Restrictions. Restrictions may be applicable on how the money should be handled
and spent.
3. Bartering

Bartering is the direct exchange of valuable commodities or services for other valuables
without the use of cash.

Pros:

1. Little use of cash as capital. Unused items can be bartered for other valuables and
can be sold after.
2. A direct relationship between traders can be built.
3. Helps with waste management and the environment by reusing and recycling items.
 4. Advocates for the conservation and utilization of unused assets.

Cons:

1. Trades may be unequal especially with how many are available and how popular it
is in the market. These exchanges can also be dependent on the market and
economic conditions. Assessment of the object value can also be objective.
2. Limited tradable assets. Not all items can be traded since values either rise or
decline over time.
3. Angel Investors

Angel investors are those who lend money to new companies in return for convertible
debt or ownership stake.

Pros:

1. Can give early-stage businesses financial support and mentorship.

2. When it comes to terms, angel investors can offer greater flexibility than traditional
lenders.
3. Can provide insightful knowledge and potential investors/collaborators in the
market industry.
4. Can help in the proposal and provision of innovative products, ideas, and strategies.

Cons:

1. Accepting angel funding may involve giving up some control over business
choices.
2. They put more pressure on the company to perform well because they anticipate
large profits on their investment.
3. If the company faces backlash or economic losses, it may damage the relationship
with the angel investor and an end to a contract agreement.
4. Free capital marketing

Inadequate funding can be helped by self-employment if one can make money by

consulting, selling goods or services, or freelancing through free softwares and capital-free
goods like digital products, virtual assistance, templates, and etc. This type of marketing is also
considered entrepreneurial.

Pros:

1. Advocates for independence, freedom, adaptability, and innovativeness.

2. Being self-employed frees people from the restrictive corporate restraints that may
prevent them from pursuing their hobbies, being creative, and exploring new ideas.
3. Entrepreneurs have more flexibility in terms of work-life balance, schedule
flexibility, and work from home opportunities.
4. Makes it possible to directly manage profits and business choices.

Cons:

1. Inconsistency in income, particularly at the beginning.

2. Benefits like health insurance, retirement plans, and paid time off are frequently
unavailable to self-employed people unless they make their own arrangements.
3. It can be daunting and time-consuming for entrepreneurs to handle all facets of their
firm, including operations, marketing, sales, and administrative work.
V. CHOOSE THE BEST SOLUTIONS
1. Creating a Good Business Plan

A well-crafted business plan serves as a comprehensive blueprint that outlines the

company’s vision, strategy, and financial statements. This document is essential for attracting
external resources. By presenting a well-structured and detailed business plan, entrepreneurs
can significantly increase their chances of securing funding from investors and lenders, thereby
gaining greater access to financing.

2. Promote Financing Literacy and Awareness

Being literate in any subject would help someone grow. Creating comprehensive
financing programs to educate people how to manage their finances effectively, understand
credit and loans, and how to utilize financial services wisely. Having comprehensive
information and a deeper understanding of financing will enable an individual to surpass all
possibilities for financing access.
 3. Proper Allocation of Funds

Entrepreneurs can prevent waste by managing and allocating their funds effectively for
certain areas. Business people will be able to think critically and decisively with the help of
this procedure, which will also maximize available finances and progressively improve
financial circumstances.