AMA ACLC MALOLOS

Feliza Jazz Bldg. Brgy. Sumapang Matanda, MacArthur Highway

City of Malolos, Bulacan

The Investigation on the Effect of Financial Illiteracy on Street Vendors in Malolos City

Bulacan

In Partial Fulfilment of the Requirements for

RESEARCH 2111 INQUIRIES, INVESTIGATION, AND IMMERSION

Submitted by:

Baulo, Sheila R.

Calma. Gian Timothy D.

Guinto, James R,

Santiago, Rhian Abegail S.

Submitted to

Ferdie Zander R. Omaña, LPT

Research Adviser
 CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

INTRODUCTION

Financial literacy helps people make smart choices with money. It includes basic skills

like saving, budgeting, borrowing, and spending wisely. For street vendors, it is very important

because they earn daily and often do not have access to banks or financial services. In Malolos

City, Bulacan, street vendors are part of the local economy, but many of them may not know

how to manage their money properly. A study by Kim, Lee, and DeVaney (2022), people with

low financial literacy are more likely to face financial problems, especially when unexpected

expenses come up. This shows that knowing how to handle money is not just useful, it is

necessary.

Financial literacy includes financial knowledge, financial behavior, and financial attitude.

Every individual needs financial skills and understanding to make decisions and manage money

in daily life. Adetunji and David West (2017) found that young women in rural areas were more

vulnerable and financially excluded than other groups. They recommended that low-cost

financial services be provided to vulnerable groups, along with financial literacy programs and

support from government and donor agencies.

Aside from knowing facts about money, how people see their own financial knowledge

also matters. According to Xin et al. (2024) some people think they know more than they

actually do. This is called subjective versus objective financial literacy. Their study showed that

people with low financial skills may not notice their own mistakes, which is related to the

Dunning Kruger effect. Even though this issue is common in many places, there are not many

studies that focus on street vendors in developing countries.

 Financial literacy is the ability to make informed judgments and effective decisions

regarding the use and management of money. It involves a combination of skills, knowledge,

attitudes, and behaviors related to financial matters. Street vendors are unskilled, self-employed

workers in the unorganized sector of the economy. Bhowmik and Saha (2011) defined a street

vendor as a person who offers goods for sale to the public without having a permanent built-up

structure from which to sell. According to the Street Vendors Act (2014), a street vendor is a

person engaged in vending articles, goods, wares, food items, or merchandise of everyday use, or

offering services to the general public in a street, lane, sidewalk, footpath, pavement, public park,

or any other public place or private area, from a temporary built-up structure or by moving from

place to place. This includes hawkers, peddlers, squatters, and other similar terms that may be

local or region-specific.

Street vendors sell goods to the public without permanent stalls and are considered part of

the weaker section of society. Their income is often low and uncertain. Bhowmik and Saha

(2013) concluded that most street vendors rely on borrowing from moneylenders. Baliyan and

Srivastava (2016) found that women street vendors face more challenges than their male

counterparts in accessing financial services. They also experience difficulties related to child

care and sanitation in their workplaces. Their study revealed that many street vendors live below

the poverty line and have low levels of education. To address these issues, self-empowerment

and access to better education for their children are needed. Awareness of financial services is

also essential so that street vendors can access these services and overcome the financial

challenges they face.

To achieve financial goals, individuals must possess basic financial skills, awareness,

knowledge, and a positive attitude, and demonstrate good financial behavior. Agarwal, Kureel,
and Yadav (2017) argued that educating youth about financial literacy benefits not only

individuals but also the wider community. They suggested that development programs should

follow basic principles such as having a clear mission and vision, improving living standards,

and integrating financial literacy into educational curricula. Dash and Das (2017) emphasized the

need to raise financial literacy awareness among women entrepreneurs. Their study revealed that

age is positively related to monthly expenditure due to increased financial skills and awareness.

They also found that financial literacy helps individuals focus on personal savings, reinvestment,

and business expansion, which leads to long-term profit growth.

The study is undertaken to find out the level of financial literacy among the street

vendors and to identify the relationship between financial literacy and demographic factors of the

street vendors in Malolos city. This study aims to examine the financial literacy of street vendors

to understand how they manage their income and expenses to sustain and grow their livelihood.

It seeks to explore how street vendors budget, the importance they place on saving, and how they

handle debt.

The study also investigates how they record income and expenses, their knowledge of

investments, and their pricing strategies. Additionally, it looks into how they set financial goals

to expand their businesses and improve earnings. By analyzing these aspects, the research aims

to provide a deeper understanding of the role of financial knowledge in supporting small-scale

[Link] study looks into the financial literacy of street vendors in Malolos City,

Bulacan. It will check both what they know and what they think they know about money. The

goal is to find out if there is a gap and to help create financial education programs that fit their

needs.
REFERENCES:

Kim, K. T., Lee, J. M., & DeVaney, S. A. (2024). Financial Knowledge and Financial

Fragility: a consideration of the neighborhood effect. [Link]

Lalenkawli, H., & Singh, B. (2022). Financial Literacy among Street Vendors in

Lunglei District of Mizoram.

[Link]

[Link]/scholar?q=cache:BgmiLEI7GT4J:[Link]/

&hl=en&as_sdt=0,5&scioq=Financial+Literacy+among+Street+Vendors+in+Lunglei+

+District+of+Mizoram++

Xin, Z., Xiao, B., Wang, L., & Xiao, H. (2022). Individuals’ Differences in Self-

Assessment: The Relationship between Subjective and Objective Financial Literacy.

[Link]
A. Statement of the Problem

1. What is the demographic background of vendors?

1.1 Type of business

1.2 Knowledge

1.3 Expected amount of income

2. What is the extent of street vendors regarding basic financial concepts?

2.1 Budgeting

2.2 Saving

2.3 Debt Management

2.4 Investing

2.5 Marketing

3. How do street vendors in Malolos City manage their daily income?

3.1 Profit

3.2 Expences

4. What is the impact of Financial Illiteracy on business growth?

HYPOTHESIS

(Ho): Financial illiteracy does not significantly affect the budgeting, saving, or investment

practices of street vendors.

There is no significant relationship between the financial illiteracy level of street vendors

and the management of their business in Malolos City, Bulacan.

There is no significant difference in the level of financial illiteracy between male and

female street vendors in Malolos City, Bulacan.

(Ha): Financial literacy significantly affects the budgeting, saving, or investment practices of

street vendors.

There is a significant relationship between the financial literacy level of street vendors

and the management of their business in Malolos City, Bulacan.

There is a significant difference in the level of financial literacy between male and female

street vendors in Malolos City, Bulacan.

SCOPE AND DELIMITATION

This study investigates the level of financial literacy among street vendors operating

within Malolos City, Bulacan, based on 50 responses. It aims to examine how vendors

understand and apply basic financial concepts such as budgeting, saving, debt management, and

informal lending practices in their daily operations. The research also explores how financial

illiteracy influences their economic resilience, decision-making, and long-term sustainability as

micro-entrepreneurs.

The study is limited to registered and unregistered street vendors actively engaged in

selling goods or services in public spaces across Malolos City during the calendar year 2025. It

does not include vendors operating in formal establishments, online platforms, or those outside

the territorial boundaries of Malolos. Furthermore, while the study highlights financial illiteracy

as a key factor in economic empowerment, it does not extend to evaluating larger problems in

the system such as government policy, taxation, or access to formal banking institutions.

Data will be collected through surveys from 50 respondents, focusing only on the

vendors' personal financial habits and views. The study will not evaluate financial literacy

programs from outside organizations nor will it assess the effects of digital financial tools that

may not be available to the target group. Limitations include differences in educational

backgrounds, inconsistent record-keeping, and the informal nature of street vending, which could

influence the applicability of the findings.

SIGNIFICANCE OF THE STUDY

This study is significant because it addresses the pressing issue of financial illiteracy

among street vendors in Malolos City, Bulacan, based on the responses of 50 participants. Street

vending remains one of the most common forms of livelihood for many individuals and families,

yet vendors often face daily financial struggles due to limited knowledge of budgeting, saving,

and debt management. Financial illiteracy contributes to their reliance on informal loans,

unstable income handling, and inability to prepare for emergencies. By analyzing how financial

illiteracy affects their economic resilience and decision-making, this study highlights the barriers

that prevent micro-entrepreneurs from achieving long-term financial stability.

For street vendors, the research underscores the importance of financial knowledge in

sustaining their businesses and securing their personal welfare. Understanding the risks of

financial illiteracy may encourage them to adopt simple financial practices, such as tracking

daily earnings, setting aside emergency funds, and reducing dependence on high-interest lending.

This knowledge is crucial not only for their survival but also for the growth of their micro-

enterprises.

For the local government of Malolos City, the findings can serve as a reference in

designing targeted programs that address financial illiteracy among informal workers. Practical

initiatives such as community-based workshops, barangay-level seminars, and partnerships with

cooperatives could help strengthen the financial capacity of street vendors. Addressing financial
illiteracy at the grassroots level also benefits the local economy, as more financially stable

vendors contribute to consistent economic activity within the city.

For non-government organizations (NGOs) and financial institutions, the study provides

evidence on the urgent need for inclusive and accessible financial services. Microfinance

opportunities, low-interest loan programs, and financial literacy campaigns could be developed

specifically to reduce the negative effects of financial illiteracy. Such interventions not only

empower small-scale entrepreneurs but also promote financial inclusion, bridging the gap

between the formal financial system and the informal economy.

Finally, for academic institutions and future researchers, this study contributes to the

growing literature on financial illiteracy among marginalized groups. It provides baseline data on

the experiences of street vendors in Malolos City, which can be compared with other studies

conducted in different cities or sectors. Future researchers may build on these findings to explore

related issues, such as the role of education, cultural practices, or digital tools in shaping

financial literacy.

Overall, this study is significant because it demonstrates that addressing financial

illiteracy is not just about teaching numbers or formulas—it is about equipping vulnerable

workers with the knowledge and confidence to make better financial choices, improve their

livelihoods, and contribute to broader economic development.

DEFINITION OF TERMS

1. Financial Illiteracy - is the lack of the necessary financial knowledge and skills to manage

money effectively, make informed financial decisions, and achieve personal financial goals. This

deficiency can result in poor financial outcomes such as unsustainable debt, inadequate savings,

and negative impacts on long-term financial well-being, such as failing to save for retirement or

qualifying for a mortgage.

2. Financial Literacy – knowledge and skills needed to manage money effectively (budgeting,

saving, spending, borrowing, investing).

3. Demographic Factors – characteristics of people such as age, gender, income, education, or

type of work.

4. Economic Resilience – the ability to cope with financial problems and recover quickly from

money-related difficulties.

5. Micro-entrepreneurs – small-scale business owners, like street vendors, who earn from small

businesses.

6. Informal Lending Practices – borrowing money from sources outside banks, such as

moneylenders or “5-6” loans with high interest.

7. Vulnerable Groups – people who are at risk of financial or social problems because of their

situation (e.g., women, poor households, informal workers).

8. Subjective vs. Objective Financial Literacy – subjective means what a person thinks they

know about money, objective means what they actually know.

9. Dunning–Kruger Effect – a psychological effect where people with little knowledge think

they know more than they really do.\

10. Informal Sector – part of the economy that is not regulated by the government (like street

vending, tricycle driving, home-based selling).

11. Financial Inclusion – making sure everyone, including the poor, has access to financial

services like savings, credit, and insurance.

12. Microfinance – small loans or financial services given to low-income individuals who

cannot access banks.

13. Self-Empowerment – helping yourself improve your life by learning skills or gaining

knowledge.

14. Barangay-Level Seminars – training sessions conducted in barangays (the smallest

administrative units in the Philippines).

15. Baseline Data – the first set of information collected, which can be used for comparison in

future studies.

SIGNIFICANCE OF THE STUDY

The Investigation on the Effect of Financial Illiteracy of Street Vendors in Malolos City Bulacan

The aim of studying the effect of financial illiteracy among street vendors in Malolos City,

Bulacan, is to evaluate, understand, and improve their financial well-being and business

practices.

Understanding Financial Practices

The study contributes by evaluating the current state of financial literacy among street vendors,

which includes assessing their knowledge, skills, and practices related to.

THE IMPACT OF THE STUDY IN SOCIETY

The study on the financial literacy of street vendors can have a significant impact on society by

improving financial well-being, promoting economic growth, and fostering social inclusion.

CONTRIBUTION

This research contributes to the public by improving the financial literacy of street vendors,

leading to better business and personal finance management. It also provides valuable insights

for policymakers to create more effective programs and regulations supporting vendors.

Ultimately, the study promotes economic growth at the local level, fosters social inclusion of

marginalized groups, and encourages community development by empowering vendors to

become more financially stable.