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The use of conjoint analysis in determining preferred attributes of salary loans among employees

Angelle Maye Carnecer and John Vianne Murcia
Professional Schools, University of Mindanao, Davao City, Philippines



When viewed by industries, knowing how clients behave leads to better business decisions. Specific tools are utilized to determine how market behaves – one of such is conjoint model. This tool was utilized in this study to model preferences for salary loans and explore utilities of attributes and their levels. A quantitative non-experimental causal method was used and involved N=200 respondents. Results showed interest rate is the most important attribute with regards to relative importance. Individually and aggregately, interest rate remains as the most important attribute for existing clients. Conjoint analysis’ additive model revealed a salary loan provided by a bank with one-month payslip required, processes loan application within the day, charges 0.5 to 1% interest rate and payable within 24 months is the most preferred. The least preferred combination for existing clients is a salary loan offered by a government fiduciary institution that requires three months of payslip, processes loan application within 10 to 15 working days, charges 2% interest rate and payable within 24 months, while the least preferred combination is a salary loan provided by a bank, with one-month payslip required, processes loans within a week, charges 2% interest rate and can be paid within six months. Implications are discussed.

Keywords: business administration, salary loan, preference, conjoint analysis, Philippines