Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

The influx of investment and investment scheme is rampant and people are lured to

invest due to the promises of 30%, 400%, 500% etc. return of investment every month.

However, some contested that these investment schemes are not legally operated leaving

people as victims at the end of the day. Lack of opportunities and jobs will cause

individuals to invest their money. Individuals are used to it that they become lazy, they are

just relying on the return of the money they invest.

Investment is a way of gaining money to grow more financial benefit. Individuals

can be easily attracted to invest money for businesses and some uses the investment money

for capital. Saving money is an important part of every financial plan. Putting money aside

each month will help you prepare for emergencies, stay out of debt and reach your financial

goals. Investing is the act of allocating funds to an asset or committing capital to an

endeavor (a business, project, real estate, etc.), with the expectation of generating an

income or profit (Picardo, 2019). Investment is the employment of funds with the aim of

getting return on it. In general terms, investment means the use of money for hope of

making more money. Investment refers to the concept of differed consumption, which

involve purchasing of an asset, giving a loan or keeping funds in a bank account with the

aim of generating future returns. Investment is the commitment of funds which have been

saved from current consumption with the hope that some benefits will be received in the
future. Thus, it is a reward for waiting for money. Investment is putting money into an asset

with the expectation of capital appreciation, dividends, or interest earnings.

When current income exceeds current consumption desires, people tend to save the

excess. They can do any of several things with these savings. One possibility is to put the

money under a mattress or bury it in the backyard until some future time when consumption

desires exceed current income.

The investor can be an individual, a government, a pension fund, or a corporation

in all cases, the investor is trading a known rupee amount today for some expected future

space stream of payments that will be greater than the current outlay.

Investors invest money for financial purposes. Investment is an asset or item

acquired with goal of generating income sense, an investment is the purchase of goods that

are not consumed today but are used in the future to create wealth. In finance, an investment

is a monetary asset purchased with the idea that the asset will provide income in the future

or will later be sold at a higher price for a profit (Chen, 2019). What benefits of investment

scheme will the investors gain after investing? For most of the investors nowadays, they

will earn and spend money. Rarely, investor’s current money income exactly balances with

their consumption desires.

According to Azwadi Ali, research on behaviours of individual investors has shown

that their trading decisions are often psychologically biased. Despite having evaluated the

financial position of a company, many individual investors are still subject to a certain

emotional elements such as attitudes and brand familiarity. In addition, many individual

investors are not well equipped to handle financial matters and make quality investment

decision.
 An investment is made when money is tied up in an asset with the purpose of

generating future earnings or savings over multiple periods. Because of the time involved,

the company needs to consider the potential interest which alternative investments could

earn or the interest that will have to be paid on a loan. Thus, this study will be beneficial to

those who wants to study some accounts of willing victims in investing scheme.

In the Islands of Mindanao, there are some investment scheme that are present. The

Almamico, Rigen, and Kabus Padatuon or also known as KAPA, are some examples and

are most trending investment scheme nowadays. Individuals are donating money and they

will receive a so called “blessings” every month, every year, or even every 15th day of the

month as a return of the money that the willing victims donated. The KAPA community

investment scheme is considered to be the biggest investment scheme in the Philippines as

the president of the Philippines describe it as a large-scale estafa. Individuals are aware in

entering in this kind of investment scheme as they pursue on donating money according to

their will. This investment scheme came out with more the a million members.

According to the news of June 13, 2019 by Virgil Lopez, President Rodrigo Roa

Duterte apologized to people victimized by KAPA Community Ministry International Inc.

which is allegedly involved in a fraudulent investment scheme, but insisted the company

will still have to be shut down. This willing victims are disappointed of the decision of the

President as they do different activities like prayer rallies but still the President stated that

“I’m sorry. The operation will be stopped or shall stop immediately,” The president said

that the investment scheme was “too good to be true” since the amount of earnings being

promised was too huge that even local or international banks cannot afford to give. At first,

the investment schemes are good at giving what the people needs and that is earning a lot
of money. The victims are blinded by money as they donate a lot in different investment

schemes. To this end, this study will examine the intentions to invest of the willing victims

to the investment scheme.

Research Questions

The purpose of this qualitative study is to analyze and discover the accounts of the

willing victims of investment scheme.

Specifically, it will seek to answer the following:

1. What are the intentions of the willing victims in joining investment schemes?

2. What are the benefits they gained in joining investment schemes?

Theoretical Lens

This study is seen through the lens of Theory of Planned Behavior

According to Aizen’s (1991) Theory of Planned Behavior (TPB), people act in

accordance with their intentions and perceptions of control over a particular behaviour,

while intentions in turn are influenced by attitudes towards the behaviour, subjective norm

and perceptions of behavioral controls. In mapping the TPB to the context of the current

study, individual investors’ attitudes towards stock trading may be strong as they are

making decisions to achieve a desired level of financial stability, whereas family and peers’

recommendations and behaviours in stock trading may form the ‘subjective norm’ variable.

In addition, the ‘perceived behavioural control’ conceptualized as an antecedent to

‘intention’ within the TPB is defined as an individual’s perception of the easiness of

performing a particular behaviour. In the context of this study, investors may be interested
in investing in a particular company only when they have time and skill to evaluate the

company and have money to invest. Therefore, when forming an intention to invest,

individual investors normally begin with evaluations of companies’ financial positions

based on some objective measures such as return on equity, dividend pay-out ratio and

beta. Next, their emotional perceptions of such evaluations may come into effect as they

are trying to justify their investing decisions in the companies’ stocks. In summary, the

theory of planned behavior is applicable to this study as it changes the behavior of the

willing victims in investing money to the investment schemes. The people easily get

attracted and swayed to the offers of the investment schemes. Thus, making them invest to

the investment schemes without visualizing possible risks.

Scope and Limitations

This study will only focus on the intentions and benefits of investment schemes of

the willing victims in the Municipality of Midsayap. Moreover, the data will be analyzed

qualitatively using phenomenological approach. In addition, this study will be conducted

in September 2019.

Significance of the study

This study is deemed beneficial to the following:

Investors. The result of the study may help the investors in identifying the different reasons

why people invest and how investment is beneficial for them.

Investment Company. The result of this study may help the investment company to be

aware of the different intentions of the investors. It would help the company strengthen

their ideas and produce various techniques that would increase investors and profit.

Financial Analyst. The result of this study may help the professionals to gain more

knowledge about the investment scheme.

Community. The result of the study may help the people to broaden their knowledge about

investment schemes and to become literate in dealing with their finances.

Government. The result of the study may help to provide analysis and awareness towards

investment schemes that would bring possible notion of the topic.

Future Researchers. The result of the study may benefit future researchers for them to

have a wider scope of knowledge about investment schemes. Moreover, it may also serve

as a reference to those who want to study about investment and investment schemes.