Analyzing the effects of home credit application adoption on credit utilization of millennials in Manila: as basis to enhancing home credit service provision / Calantuan, Allaine Juleane K., Cometa, Maria Lorraine E., Natividad, Reiven Julianne C., Polintan, Pamela Marie A., Raspado, Kylla Nicole R., Tabuzo, Orfea Jeena C., Tayag, Jaira Jane C. 6

Business Research: (BSBA major in Financial Management) - Pamantasan ng Lungsod ng Maynila, 2024. 56

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Abstract This study entitled, Analyzing the Effects of Home Credit Application Adoption on Credit Utilization of Millennials in Manila: As Basis to Enhancing Home Credit Service Provision was prepared by Allaine Juleane K. Calantuan, Maria Lorraine E. Cometa, Reiven Julianne C. Natividad, Pamela Marie A. Polintan, Kylla Nicole R. Raspado, Orfea Jeena C. Tabuzo, and Jaira Jane C. Tayag, in partial fulfillment of the requirements for the subject Business Research. This was prepared under the supervision of Dr. Marivic F. Flores. This study examined how the adoption of the Home Credit application impacts the credit utilization behaviors of millennials, with the primary goal of improving the provision of home credit services. Specifically, this study sought to address key questions regarding changes in credit utilization patterns, comparisons between pre-application and post-application behaviors, types of transactions using the application, and perceptions regarding the effectiveness of the Home Credit application in facilitating financial decision-making. This study also aimed to delve into the demographic profile of the respondents. The researchers utilized a comparative quantitative research design to comprehensively understand the impact of Home Credit application adoption on individual financial behaviors. Utilizing purposive sampling, millennials in Manila who have embraced the Home Credit application were specifically targeted to ensure the collection of relevant and extensive data. There were a total of 171 respondents residing in the City of Manila. The data were analyzed using the frequency, percentage, weighted average, and Z-test. Based on the findings, it was discovered that millennials aged 28 to 31 years old, residing in District 4 of Manila, and earning an annual income of less than P250,000, were the ones most likely to have adopted the Home Credit application for credit utilization. Before adopting the app, majority of the respondents had low credit transaction volumes (0 to 2) and spent less than P5,000, exhibiting conservative spending habits. After adopting the app, there was a notable increase in both monthly credit transactions (3 to 5) and spending level (P5,001 to P10,000), although still in moderation. Consistent timely repayment was observed both before and after the Home Credit app adoption. Furthermore, product loans were the most prominent type of loan usually applied for. Most users noticed changes in their credit utilization, primarily an increase in purchasing items. While those with decreased credit utilization cited limited credit transactions as the primary reason. In addition, Z-tests confirmed the significant differences in credit transactions and spending before and after using the Home Credit app. In terms of effectivity, the app was deemed highly effective, particularly in managing outstanding debts and credit balances, with payment reminders and budgeting tools being the most valued features. Overall, the Home Credit app has facilitated increased and more frequent credit use while helping users manage their credit effectively. The study found that millennials in Manila increased their credit transactions and monthly spending after using the Home Credit application. To improve the app, it is recommended to display the amount due on the home screen, benefiting both users and Home Credit by encouraging on-time payments and reducing defaults. This change also ensures better awareness of credit balances for users. Additionally, it is suggested for Home Credit to integrate a reward system in their app's gamification features. This would allow users to earn points while playing, which can be redeemed for discounts and incentives. This benefits both users, who gain rewards through gameplay, and Home Credit, by boosting engagement and promoting familiarity with the app. Furthermore, it is also recommended that Home Credit expands its product offerings to include items like motor vehicles and cars, as product loans are popular among millennials. Despite many users have lower annual income, the affordability of Home Credit's installment plans make repayment feasible and manageable. Adding these products could also significantly boost their service output. In essence, these recommendations collectively aim to optimize Home Credit app user experience, increase engagement, and broaden the app's appeal to potential customers.

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