How To Reinvent Cooperative Sector
Business Option
By TEODORO P. ESTACIO
September 12, 2012, 5:34pm
MANILA, Philippines — Section 5 of Rule 27 under Republic Act 9520 otherwise known as “The Philippine Cooperative Code of 2008,” prescribes the kind of training Cooperative Officers must undergo for the Cooperative to be given a certificate of good standing. The training include among other things topics like Basic Cooperative Principles, Governance, Accounting and Audit, Finance, Leadership, Policy Development and other important development subject matter.
One of the topics deal with Financial Management which we feel is not only timely but a must for the present setting as Cooperative Operations become more and more complex from a simple “community bank” to a more formal quasi banking operations.
Thirty years ago, Cooperatives, specifically those involve in Credit has an easy life of building their initial capital, making a savings campaign among members and extend credit to members who are in need of these services. If the demand exceeds the available funds, the loans are scheduled and members are asked to wait. Some loans are released within an average of 30 days depending on the collections of the Coop. If delinquencies reaches a high of 30% of the total Loans Portfolio, expect members to get their loan proceeds within two to three months.
That was 30 years ago.
Today, with the knowledge of Financial Management, Cooperative leaders realize that there are many ways to make their operations more effective and services more efficient.
Tools like Cash Forecasting and Cash Budget are now being employed even by Cooperatives in the countryside as these are among the basic financial concepts being taught the Cooperatives.
Cooperative leaders now have an idea about the various sources of funds and how to efficiently allocate them to various Cooperative projects.
Today also, leaving excess funds with a savings account in a commercial bank or a rural bank and being satisfied with the meager rates of interest they receive have become an eye opener for most leaders. Today, they understand a lot more about investments, investment products allowed by law and banking procedures that they don’t mind 30 years ago.
With the initiative of Bangko Sentral ng Pilipinas, Cooperatives can evaluate their operations through standards called C.O.O.P. P.E.S.O.S. which is an acronym for the various quantitative and qualitative evaluation of operations.
Philippine Institute of Certified Public Accountants (PICPA), the national organization of CPAs, has also contributed to the establishment of the Cooperatives Chart of Accounts.
These two moves, have now allowed many cooperatives to operate with uniformity and effectiveness. And with the support of the present leadership of the Cooperatives Development Authority, we see a more functional and professionally managed cooperatives in the years to come.
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