Financing of Computer Shops in Selected Barangay of Indang in Philippines

Financing of Computer Shops in Selected Barangay of Indang

CHAPTER I
INTRODUCTION

Computer industry has taken a great stride from the simple abacus, a manually operated calculating device which originated in the Middle and Far East more than 5000 years ago. The computer has grown from analytical engines to the punched cards of later to complex device that performs word processing, calculation, process information with impressive speed and utmost precision and break down the barriers that separate people in time and space through its enhanced multimedia capabilities. (Villafuerte, 1997). The increasing uses and benefits from computers are some of the reasons why computerization has become a significant factor in our lives. (Alcera, 1990).
The computer ranks as one of the major technological developments of the 20th century. Beginning about 1950, it took the computer less than two decades to revolutionize the method of business, industry, and government; to greatly advance work in science; and to find wide application in such diverse fields as accounting, education, medicine and publishing. In 2003, the computer industry which includes the manufacturing of computers and computer equipment, the development and marketing of computer programs and the provision of computer – related service – is among the most important in the world. (New Standard Encyclopedia vol. 4). In United States, the computer industry has grown into one of the biggest and most profitable industries. It now comprises thousands of companies, making everything from multimillion-dollar high-speed super computers printout paper and floppy disks. It employs millions of people and generates tens of billions of dollars in sales every year. (Grolier International Encyclopedia vol. 3).
The Philippine government, recognizing the importance of Information Technology, is helping to fund IT investments with in the country. The government’s budget for Information Technology spending is increasing as of 1997. The national government had an average annual operating budget on Information Technology of Php643 million. At that time, about Php7 billion worth of Information Technology asset had already been put in place by the national government. Information Technology sector is still a healthy one in the country, regardless the economic troubles. Major Information Technology projects of investments continue to exist. Within the last year, there has been a definite increase in the number of computerization projects in the government and elsewhere. Much of the government has now moved online, especially with the strong encouragement from the President and National Information Technology council. In 1998, 73 government agencies were already connected to the internet, with many of them having an Internet presence through their own websites.
Local governments are also expected to spend and provide a budget for Information Technology investment, the national government has projected a substantial increase is the annual budget for information technology. The government is also encouraging and looking towards the participation of private companies and investments in Information Technology as developing country cannot take all the weight of the costly upgrades in technology. (www.Yahoo.com, 2012).
In the era of globalization, computer center business is very important. Computer center in a place where there are more computer units where people can rent especially for those who cannot afford to buy a computer unit for their own use. That’s why computer center business is more attractive.

Background of the Study
In today’s world, all people are referring to the technology. It’s easy to work with technology especially to the computers. There are many computer shops established in different places. Computers are in demand especially to the students who do projects, homework’s, researches and also entertainment.
A computer is a general purpose device that can be programmed to carry out a finite set of arithmetic or logical operations. Since a sequence of operations can be readily changed, the computer can solve more than one kind of problem.
This study wants to determine the sources of initial capital and current capital of computer shop operators; the money to be used as part of the capital comes from the financing source; how the computer shop operators repay the fund obtained from their financing source; the requirements of the creditors in giving loans.

Statement of the Problem
Computer shops in selected barangay of Indang have been increasing through the years. People are now greatly dependent on computers in accomplishing their paper works, home works and other activities that is connected to computers. Reasons for computer shop owners to seek financial support to cope with increasing demand for computer services.
This research will conduct to know the following specific problems:
1. What are the business characteristics of the computer shops and owners in selected barangay of Indang?
2. What are the reasons of the owners for establishing the computer shops?
3. What are the sources of financing among computer shops?
4. To what extent of the capital comes from different sources?
5. What are the modes of payment from non personal sources of
6. Is there a significant relationship between business characteristics and sources of financing?
7. Is there a significant relationship between business characteristics and extent of exposure to different sources of financing?

Hypotheses of the Study Internet surfing and LAN gaming is a big hit on the Philippines and because of Filipinos' addiction to internet and gaming, internet cafe is a good business opportunity. (Small Business Opportunities in the Philippines, 2011) Nowadays, computer shop business has a very large impact especially to the students so many businessmen has established computer rentals. For this reason, the study had formulated the following alternative hypotheses: Ha1: Business characteristics have significant relationship to sources of financing?
In other words, before acquiring money in source of funds there must have a good business characteristic. Because business characteristic is one of the major need to make some loan to the financial institutions or in friends. This characteristics ensuring that the owner can repay the debt that is purchase. Ha2: Business characteristics have significant relationship to extent of exposure to different sources of financing?
Business characteristics affect the source of financing. There will be an extent or limit because of the characteristics. If there is an incomplete characteristic, there will be a limit on the amount that can purchase.

Conceptual Framework A computer is a programmable machine. The two principal characteristics of a computer are: it responds to a specific set of instructions in a well-defined manner and it can execute a prerecorded list of instructions (a program). This conceptual framework, as illustrated in Figure 1, will suffice as the connive of the study that focus in financing of the computer shop business in Indang. This study will analyze the business characteristics of computer shop and owners such as age, gender, civil status, education, monthly income, business address, floor area and years in operation. In this framework it will tackle about the relationship between business characteristics and sources of financing and the relationship between business characteristics and extent of exposure to different sources of financing.

Figure1. Financing model of computer shop business and owner’s

Objectives of the Study
This research aim to identify the sources of financing the computer business in selected barangay of Indang. The specific objectives of the study are as follows:
1. To describe the business characteristics of the computer shops and owners in selected barangay of Indang.
2. To determine the reasons of the owners for establishing the computer shops.
3. To find out the sources of financing among computer shops.
4. To determine the extent of the capital comes from different sources.
5. To identify the modes of payment from non personal sources of financing.
6. To find out significant relationship between business characteristics and sources of financing
7. To arbitrate the significant relationship between business characteristics and extent of exposure to different sources of financing.

Significance of the Study Financing of computer shop is the actual acquisition of funds with when to start the computer shop business. Financing institutions in the country were not so available to the people who want to engage in computer business. If the owners do not have enough money to finance their computer shop business, they often borrow from banks, non-banks institutions or sources and from private individuals who often charge higher rates of interest.
This study is primarily concerned with how computer shop owners in selected barangay of Indang finance their computer shop business. It tried to gather some information on why the owners enter in computer shop business. Findings of the study could provide useful information to people who wish to enter into this kind of business. Furthermore, the facts that contained in this study may also be used as a reference material for students and researchers who would be interested in conducting studies related to this.

Scope and Limitations of the Study
The study dealt primarily with the financing of computer shops in selected barangay of Indang. The respondents in this study include those who are registered in this computer business in selected barangay of Indang.
There were two hundred fifty (250) respondents who will participate in the study. These respondents are located in selected barangay of Indang such as Poblacion I, Poblacion II, Poblacion IV, Bancod, Alulod, Buna Cerca, Kaytapos, Kayquit, Buna Lejos, Calumpang Cerca, Agusos, Banaba Cerca, Tambo Malaki, Tambo Kulit, and Kaytambog.