Personal Debt and Mental Health: A Correlational Study among Sole Proprietors of MSMEs

Abstract

Debt is associated with various physical health issues, including inflammation, high blood pressure, and a high body mass index. This study examines the relationship between personal debt and mental health among sole proprietors of micro, small, and medium-sized enterprises (MSMEs) in Cateel, Davao Oriental. Utilising a quantitative descriptive-correlational design, data were gathered from sole proprietors registered under 163 DTI through adapted survey questionnaires. The research focused on three dimensions of personal debt—self-control, overconfidence, and peer influence—and three aspects of mental health—resilience, social support, and stress levels. Results indicate that respondents demonstrated a high prevalence of debt-related behaviour alongside generally positive mental health outcomes. Resilience plays a significant role in mental health, especially under adverse circumstances. Notably, there was a significant relationship health. Specifically, overconfidence and peer influence were found to have moderate correlations with mental health, while an overall debt level exhibited a strong positive correlation (r = 0.786) with mental health. These findings underscore the crucial role of financial literacy and psychological resilience in fostering the well-being of local entrepreneurs, indicating that targeted interventions could improve both financial management and mental health support within this community. The mental health of sole proprietors was generally assessed as "Good," with the following indicators: resilience was strong, indicating the ability to cope with adversity; social support from friends and family was high, reinforcing emotional well-being; and stress levels were present, particularly regarding financial challenges such as bills, medical expenses, and food affordability, though still within manageable levels. These results confirmed that how sole proprietors managed their personal debt played a significant role in their emotional stability and psychological resilience.