THE IMPACT OF INTEREST RATES ON LENDING AGENCIES AND COOPERATIVES IN NAVAL, BILIRAN

The study investigates the impact of interest rates on the operational strategies and financial management practices of lending agencies and cooperatives within the municipality of Naval. Using a quantitative descriptive research design, the study gathered data from 31 local lending institutions and cooperatives to assess how fluctuations in interest rates influence areas such as profitability, capital adequacy, interest income, credit policy, risk management, lending criteria, repayment structures, pricing strategies, product diversification, cost control, and client communication. Survey instruments were employed to collect responses across several thematic variables, which were analyzed using weighted mean computations and reliability testing. The findings revealed that most institutions strongly agree on the importance of client communication and education, particularly in maintaining trust and loan performance during rate fluctuations. Additionally, strategies such as financial product diversification, adaptive pricing, and operational efficiency were seen as vital in sustaining institutional resilience. These results underscore the proactive measures taken by lending agencies and cooperatives to navigate changing economic conditions. It is recommended that institutions further enhance their financial literacy programs for clients to improve decision-making and repayment behavior during both low and high-interest rate periods.