Trapped in the Cycle: Lived Experiences of Nano-Entrepreneurs Borrowing from Loan Sharks in Cebu City

Abstract

Loan sharks—popularly known as 5-6 lenders in the Philippines—remain deeply embedded in the everyday financial survival of nano-entrepreneurs who operate the smallest and most vulnerable businesses. Despite government efforts to expand financial inclusion, many nano-entrepreneurs continue to depend on informal lenders due to structural barriers, urgent cash needs, and limited financial literacy. This phenomenological study explores the lived experiences of ten nano-entrepreneurs in Cebu City who rely on loan sharks for day-to-day capital and household needs. Guided by Husserlian phenomenology and Colaizzi’s seven-step method, the study uncovers how borrowing becomes a normalized, cyclical, and emotionally burdensome practice—one driven by economic necessity rather than business growth. Participants describe their financial realities as precarious, shaped by irregular income, mounting repayment pressure, and fear of collectors. Themes emerging from the narratives reveal deep-seated financial strain, intergenerational vulnerabilities, limited access to formal credit systems, and a cultural pattern of endurance in the face of debt. While borrowers appreciate the convenience and immediacy of loan shark transactions, they also express feelings of entrapment, anxiety, and resignation. The findings highlight the urgent need for structural interventions: accessible microfinance, localized financial education, and community-based support mechanisms. This study contributes to the cultural and social analysis of informal finance in urban Philippine contexts, underscoring how marginalized entrepreneurs negotiate survival within an unequal financial landscape