Subject : Reflections during the Study Tour to Cooperatives
Date : December 3-4, 2010
Location: Panabo Multi-Purpose Cooperative
Agdao Multi-Purpose Cooperative
United Sugarcane Planters of Davao MPC/ Savings & Credit
Foreword
The “I love my Coop Program” is an intervention program that came out as a result, after the operational diagnosis regarding the present situation of MAGROW COOPERATIVE was conducted. (Rolando I. Mesias, I Love my Coop Program). This program aspired to regenerate the stability and to align the advancement of the cooperative’s businesses and the people working in it.
The Program consists of several Phases namely; Phase I- The Preparatory Phase, Phase II- Program of Engagement, Phase III- The Aggressive Collection Alternatives, Phase IV-The Educational Tour, Phase V- Monitoring and Evaluation System. (Rolando I. Mesias, I Love my Coop Program)
As part of the Phase IV of the program, the team which consists of the Board of Directors, Loans Operation and Head Office Staff, have joined the Educational Tour to three (3) of the big and leading cooperatives in Region XI (or Mindanao). This activity aimed to learn and gather information from other cooperatives specifically in the management of credit collection, management structure, information technology and other trends as practice by other cooperatives. MAGROW MPC may opt to adapt strategies that may strengthen the financial condition and management performance of the cooperative.
The Tour
Panabo Multi-Purpose Cooperative
December 3, 2010; 11:00a.m.
The team first visited Panabo MPC which is a FOCCUS cooperative with an asset of more than 400Million Pesos. PMPC is a 45-year old open type cooperative with 25,000 members. Its Head Office or Central Office is a separate department and is a support group to the Main Office and other Coop Branches. Most loan borrowers of PMPC are barangay officials. One strategy established by the cooperative is partnering with bank institutions like One Network Bank, DBP, LBP and other banking agencies. They are also strengthening the cooperative’s corporate social responsibility through giving and initiating projects to barangays. One criterion to be recipients of such projects is the paying performance of the barangay officials to the coop. Like most FOCCUS branded coops, PMPC adapts the Tutok, Dikit, Kulit approach in loan collection.
Agdao Multi-Purpose Cooperative
December 3, 2010; 3:00 p.m.
The team’s next stop was the Agdao Multi-Purpose Cooperative with its Main office located at San Pedro, Davao City. Like PMPC, AMPC is also branded as a FOCCUS Cooperative and has an asset of more than 400Million Pesos. Agdao MPC has also established a Head Office as a support group. AMPC as an open-type coop has extended its membership to the different levels in the society but majority of their members are vendors who are recipient of the Microfinance- loans. Agdao MPC has several branches within the Davao Region.
United Sugarcane Planters of Davao Multi-Purpose Cooperative
United Sugarcane Planters of Davao Savings and Credit Cooperative
December 4, 2010 10:00 a.m.
The USPD is split up into two cooperatives: the USPD Multi-Purpose Cooperative which is a closed-type cooperative exclusive to Sugar Cane Planters within Davao Del Sur; and the USPD Savings and Credit Cooperative which is an open type coop. The two coops have different set of Board of Directors; but however, are managed by one General Manager only (which is quite indistinct since a person cannot be employed full time to two separate employers). USPD Savings and Credit Coop have also several branches within Davao Del Sur. This coop was split up from the Main coop, the USPD MPC, last year 2003. After the separation of USPD Savings and Credit from USPD MPC, the loan delinquency of the USPD Savings and Credit lowered from 35% down to 3% (and there were years that the delinquency rate was below 1%, WOW!). The coop focuses in a Capacity based lending and follows the standard of PEARLS. The two coops also shared the same building.
The Learning
PMPC and USPD have well-arranged offices (except for AMPC since their building is still under construction). People seemed very professional and welcoming in dealing with visitors like us (*wink). (One thing Sally has observed was that they don’t treat us heavy meals, they only offered “light snacks” which is quite different to Magrow since we, most of the time, always provide meals and sometimes even lodging accommodation [whew!] – We’re quite more generous eh? Or spendthrift rather? J).
Key Staffs (who entertained us) seemed well trained and knew their forte in the business. I wonder how often they were send to trainings (hmmm which made me think to immediately complete the Training Needs Assessment for the staff).
As we are told, the visited coops extend loans to members through capacity based lending and conducted thorough credit and background investigation. In the case of AMPC, they have assigned collectors who will collect from at least 300 loan borrowers whose mode of payment are in daily basis. These coops have already established ‘solid’ approaches in lending through meticulous procedures and firm decision making (which I presumed) since they have low delinquency rate, in which if compared to MAGROW, we still have more painstaking effort to do in order to lessen bad debts. (Though, at present; through the collection effort of the GM and Loans Department and the loan amnesty program, MAGROW’s loan delinquency has decreased). In one conversation with the Branch Manager at AMPC, he told us that they have one loan case in which they have appealed to the Small Claim Court but he discouraged us to put forward uncollected debt cases to SSC since, as experienced, the judge also had claimed his ‘share’ of the collected amount aside from the legal and court fees which eventually made the coop spend more and collect less. He however egg on collections through collecting agencies.
USPD Savings and Credit Coop, on the other hand, have strong encouragement in the Savings Deposit Retention of members, through specialized Savings products like Christmas Savings. This product encourages members to deposit certain amount of money to be withdrawn every December only. But in order to dissuade the members to withdraw their savings, they offered items with equivalent points to their savings deposits to be given to members instead of releasing their deposited amount. Example, a member with a savings deposit of P58, 000.00 will be given a television set which is equivalent to 5,800 points thus 1 point is given for every P10.00 deposit.
Like this oh:
The TV set may have cost only less than P15, 000.00 which is more or less 25% of the total deposits of the member. In this way, the coop may use the remaining 75% of the deposits for another year.
MAGROW may adapt this strategy to encourage our members to generate savings deposits. The Trade Center may also apply this to promote cash purchases; re: in every P100.00 cash purchase, any item worth P10.00 may be given.
MAGROW may also embrace USPD’s system in which they split up the coop into two different organizations. Like MAGROW, USPD is also a closed-type coop exclusive to sugarcane planters only but since the market of services and membership is limited, the USPD Savings and Credit Coop was created to extend its membership to all interested. If this system will be adapted by MAGROW, we may also be split into two organizations: Banana Growers and Associates members in whom the latter will eventually be regular members of the then new coop organization. The risk of this system is that when the associate’s organization will completely separate from the original coop. The original coop may be left behind by the associates; since the Grower’s share holdings as of present is less than half of the total Paid-up share capital compared to the Associates. Moreover, the number of associate members increases every month since the coop is recruiting associates from different sectors in the society. Compared to the associate members, our coop’s regular members have a dragging growth of share capital and savings deposits. Because it is exclusive to banana growers only, its membership also suffered a very slow increase and is more or less 13% of the total membership of MAGROW only.
Conclusion:
The Educational Tour is a great tool for the officers and staff to gather information, compare and adapt developmental trends in running the coop’s business. This knowledge will be used in the coop’s endeavor to strengthen its sustainability in the business competition and its advancement to ensure complete social responsibilities among its members and the society. All of these however will only be realized when both the officers and staff will develop full articulation of each of their responsibility in ascertaining that the mission, vision and objectives of the cooperative will be fulfilled. J
***
PHOTOS
"mga gipang-gutom!"
"sarap ng chicken.. !"
This is where we're staying for the night.
______________________________________________________________________________
