The history of mankind, in a large part, is the struggle for security against poverty.In many parts of AFRICA ASIA it is a battle against debt or credit.
Ancient writings show that credit and interest have been mankind’s problems for more than 4, 000 years. Interest is considered rent paid for use of otherpeople’s money. However, the poor have always toreckon with excessive rates and harsh term of interestin their times of need. They have always been thevictims since earliest times.
Hammurabi as Kingof Babylon includedSome laws on credit to promote the welfare of thecommon people against high interest rates by few money-lenders.
In England, concern for the miserable conditions of theworkers associated with the industrial revolution led to twoknown experiments on cooperatives. Robert Owen of Wales in his New Lanark Mill community and William King of Brighton in his writings maintained that “individual competition is an evil which does not benefit the people.”
They advocated that cooperation is needed to achieveresults that will benefit all. The other experimentwhich reached more people and had more success andlasting influence was theRochdale Cooperative Store in 1844.
Rochdale Equitable Pioneers Society - Theindustrial Revolution completely changed thelives of people living in Europe. Together withprogress, it brought misery. Many left thecountryside to work in factories for long hourswith little pay. There was no state help, nosickness benefit and no free education. Amongthese exploited were children who worked longhours in the factories instead of going toschool. Soon there was famine. In history thiswas often referred to as theHungry Forties(1840’s).
It was at this time that a group of 28 people met together todiscuss what they could do to ease their suffering. It wasSaturday afternoon in 1843 in the town of Rochdale, England.One member of the group, Charles Howarth, suggested thateach of them save two dimes a week and use their savings tostart a little store of their own. They could buy their goodscheaper at whole sale prices. Someone objected by pointingout that it had been tried but failed. Further analysing theproblem, they discovered that previous ventures failedbecause customers were allowed to buy goods on credit. Mostoften they could not pay their debts so that time came whenthe store had to close for lack of money to pay whole sale forgoods ordered. To solve the problem, there was a suggestionto make a rule of paying cash for everything bought. Then theywill always have cash to pay the wholesale.
After defeating Spain in 1898, the United Statesacquired the Philippines as a colonial territory. Inintroducing western civilization to the country, theUnited States included the idea of credit unions.In the fact, Edward Filene’s first thought afterobserving Credit Unions in India in 1907, was tointroduce it to the Philippines which was a newlyacquired Asian territory of the USA. Later,missionaries to the by succeeded in introducingthe movement.
The Vigan Credit Unionwhich was organized in1938 by Rev. Allen Huber,a Protestant missionary,was a proof of this. Heorganized over 30 CreditUnions before he and hiswife were taken prisonersby the Japanese in WorldWar II.
Even before the advent ofmissionaries in the Philippinesseveral attempts were made bythe Filipinos to introduce CreditUnions to their fellowmen.Among them was Dr. Jose Rizalwho must have seen them workduring his travel in Europe. Hetried to introduce it in Dapitanwhen he was exiled by theSpanish government.
In 1907, Governor Teodoro Sandiko of Bulacan drafted a bill to organize Credit Unions patterned after those of Raiffeisen’s.Presented 1908 by Rep. Alberto Baretto of Zambales
it was approved by the Philippine Assembly (LowerHouse of the Legislature) but failed to get theapproval of the Philippine Commission (Upperbody of the Legislature).The second attempt to institutionalize rural creditcooperatives was through Act. No. 2508 it metsuccess for it was passed in both Houses of thePhilippine Legislature. However, lack ofcooperative education and training resulted in itspoor implementation.
In 1952, the Agricultural Credit andCooperative Financing Administration(ACCFA) were created by Republic Act821 to the Agricultural CreditAdministration (ACA) in taking overACCFA’s functions reported that as of700 Farmers Cooperative MarketingAssociations (FACOMAS) that ACCFAorganized, only 120 were operating.Republic Act No. 2023 enacted in 1957sought to promote, organize andsupervise all types of non-agriculturalcooperatives. Records, however, showedthat in 1971, of the total registered 4673cooperatives only 633 were reportedactive.
All the sad experiences oncooperatives were due to a largeextent to insufficient cooperativeeducation and experience andthe lower standard of livingcaused by the war. The advent ofMartial Law in the country inSeptember, 1972 sought toremedy the situation.
Presidential Decree 175 entitled “Strengthening theCooperative Movement’ provided the basis for a “soundand systematic program’. It sought to make cooperative ameans of affecting income redistribution so that they weretied up with the land reform program. It requiredattitudinal change by emphasizing learning, discipline, andsaving. Believing that cooperatives should be started bythe mass base, the then Bureau of Cooperativesintroduced the Samahang Nayon Stage. Only aftermeeting the requirements of at least 250 members andpooled savings in shares worth at least P25 000 000.00 canthe Samahang Nayon be registered as a Kilusang Bayan ora full-fledged cooperative.
As of December, 1974, the cooperatives developmentprogram had reached 71 out of the 73 target provinces. Itcovered 22, 808 barrios with a total collection in sharesand savings of P23 803 251. 05. The average membershipper Samahang Nayon was 46 with an average collection ofp1 952.67.The cooperatives program included the establishment ofthe following development projects.• Cooperative Insurance System of the Philippine (CISP)•Area Marketing Cooperatives (AMC)•National Publishing Cooperative (NPC)•Cooperative Rural Bank (CRB)• Cooperative Marketing System of the Philippines (CMSP)
Since 1915 (Republic Act 2508 providing for AgriculturalCredit Cooperative Associations), many laws have beenpassed including P.D. 175 in 1973. On March 10, 1990,Pres. Corazon C. Aquino signed into law R.A. 6938 – theNew Cooperative Code of the Philippines and R.A. 6939 –The Act Creating the Cooperative Development Authority(CDA).It was hoped that the enactment of these new laws wouldpave the way for the accelerated growth and developmentof Cooperatives in the Philippines. The new laws simplifiedand synchronized the registration and administration ofcooperatives of all types.
Credit Unions were born of adversityamidst an atmosphere of extreme povertyin Europe. Just who started them is vague.It is believed that in France, Buchez,Proudhon, and Louis Blanc as early as1796, in their discussion first evolved thecooperative idea.
A cooperative federation is formedprimarily to engage in businessneeded by its member cooperatives.Membership in a federation requiresprimary cooperatives to invest or givecapital contribution to be used by thefederation in its business operations.Members of a federation equitablyreceive share of the net surplus basedon their transactions or economicparticipation.
A cooperative union engages in nonbusiness or non-surplusgenerating services that are neededto build the institutional capability ofcooperatives and to strengthen themovement in general. Examples ofthese services are representation ofmembers in various for a, advocacywork, information dissemination,research, education, publication andnetworking. A union may raise fundsfrom private and government donors.
COOPERATIVE A CO-OPERATIVE is anautonomous association of personsunited voluntarily to meet theircommon economic, social, andcultural needs and aspirationsthrough a jointly-owed anddemocratically-controlled enterprise.
Biblical Foundation ofCooperativesActs 4:32-34“All the believers were one in heart andmind. No one claimed that any of hispossessions was his own, but they sharedeverything they had. 33 with great powerand apostles continued to testify to theresurrection of the Lord Jesus and muchgrace was upon them all. 34 There were noneedy persons among upon them. From ttime to time those who owned lands orhouses sold them, brought the money fromthe sales and put it at the apostle’s feetand it was distributed to anyone as he hadneed”
Main characteristics of Coop EnterpriseOwned and controlledby members who useits services(identity of owner &user)Has both economicand social purpose
DISTINGUISHING COOPS FROM OTHER BUSINESSCOOPS OTHER BUSINESSMain purpose is to provide Main purpose is to makeservice & savings to profit for investorsmembers. Essentially a union of capitalEssentially union of persons. Control is based onControl is democratic; each number of voting sharesmember has one vote Ownership in the handsOwnership in the hands of of investorsmembers who use the service Surplus allocated inSurplus refunded to proportion to investmentmembers in proportion to Shares may be freely traded & fluctuate in value
PHILOSOPHY“Not for PROFIT not forCHARITY but for SERVICE”
Section 12Constitution andBy-Laws Services over and above profit shall be overriding consideration of the cooperative in the pursuit of its goals and in the operation of its business.
ANCHORS OF DECISION IN MAKING COOPERATIVES International Coop-Alliance Principles and Practices RA 6938 Government Regulations CDA/DOF Manual of Regulations •Dole •SSS/PhilhealthArt of Cooperation/Constitution and •LGU-Permits •HDMF By-Laws •BIR-Taxation Coop Policies and Procedures Rules and Regulations
Membership Control. Subject toprovisions of RA 6938 and therules and regulations prescribed bythe authority, the final decision in themanagement and administration ofthe affairs of the cooperative is vestedin the General Assembly. GENERAL ASSEMBLY. The General Assembly of the cooperative is composed of all the members entitled to vote duly assembled and constituting a quorum. In the case of cooperatives with numerous and dispersed membership, the general assembly may be composed of delegates elected by each sector, chapter or district of the cooperative in accordance with the rules and regulations of the authority.
Subject to RA 6938, relevant rules GENERAL and regulations, the GA is the ASSEMBLY supreme body where all authorities emanate from ETHICS MEDIATIO/ BOARD OF ELECTION CREDIT AUDIT CONCILIATIONCOMMITTEE COMMITTEE DIRECTORS Sets the COMMITTEE COMMITTEEConducts Prepares for Decide intra- strategic Processes andfinancial, and facilitates decides on loanmanagement, cooperative direction and the conduct of application*property and disputes, sets formulates Applicable for coups electionsocial audit policies with credit services*Prepares minutes In-charge of overalland safe keeps of financial SECRETARY TREASURER management of the official documents coop and acts as chief financial officer Performs study EDUCATION AND SPECIAL Plans and function for the MEMBERSHIP BOD Ad Hoc COMMITTEE COMMITTEE implement s education and training programs Manages the day- GENERAL to-day operations MANAGER Performs specific MANAGEMENT tasks related to the STAFF day-to-day operations
UNIQUENESS OF COOP AS BUSINESS ENTERPRISE1. Big Business Those Who Own Those Who Those Who Use Control Investors Management Costumers2. Small Scale Business Those Who Own and Those Who Use Control3. Cooperatives The same body of people who own, control and use the service
• Illustrative Examples Owners Controllers CostumersCorporatione.g. San Stockholders Management General PublicMiguelCorporationVariety Storee.g. Nanas Owner [Nena] Owner [Nena] General PublicSari-sari store Member thru the GA elect BOD andCooperative Member Committees who Member manages the coop
Coops Do All Types of Economic ActivitiesFinancial services retail, insurance, agricultural production & marketing, industrial production, fisheries, dairy, housing, transport, utilities (electricity, water, gas, etc.), travel, other services.
New generation coops medical, child, care, social care, funeral, tourism, sports, schools, orchestras, etc.
TYPES OF COOPERATIVESCredit Cooperative isone which promote thriftamong its members andcreates funds in order togrant loan for productiveand provident purposes; Consumers cooperative is one of the primary purpose of which is to procure and distribute commodities to members and non members;
Producers Cooperative is one that undertakes joint production whether agricultural or industrial. Marketing Cooperative is one which engages in the supply of production inputs to members and markets their products;Service Cooperative is one whichengages in medical and dental care,hospitalization, transportation, insurance,housing, labor, electric light and power,communication and other services;
Multipurpose Cooperativeis one which combines two ormore of the businessactivities of these differenttypes of cooperatives. Workers Cooperative is a type of cooperative which creates work through collective self-employment
PRINCIPLES AND PRACTICES PRINCIPLES an embodiment ofideas that determinate the essential characteristics of an organization,distinguishing it from all other organizations.
PRACTICES a specific and practical application of a principle developed and agreed on among co-operators of a given country.Practices are in accordancewith unique conditions andcircumstances, and thusmay vary as to both timeand space. In no situationhowever should a practicerun counter to the essenceof a given principle.
CO-OP VALUESCo-operatives are based on the values ofself-help, self-responsibility, democracy,equality, equity, and solidarity.In the tradition of their founders, co-operative members believe in the ethicalvalues of honesty, openness, socialresponsibility and caring for others:
1.Self-help- the act of helping of improving yourself without relying on anyone else-All people can and should striveto control their own destiny -Full individual development can take place only in association with others . -Members need to help themselves
2. Self-responsibility(fact of being responsible)Members haveresponsibility :-for the establishment andcontinuing vitality their co-operative-for ensuring that their co-operative remainsindependent-of promoting their co-operative among theirfamilies, friends andacquaintances
3. Democracy(rule by-for-of the people or political authority) -includes considerations of rights and responsibilities of members -participation in the decision-making in the general assembly, members/ ownership meeting
4. Equality 5. Equity (likeness or (the state, quality, orsameness in quality, ideal of being just, power, status or degree) impartial, and fair)-members have rights ofparticipation, information, -Members should bea right to be heard, and equitably rewardedmaking decisions. for their participation in the co-operative, through: -Patronage dividends -allocations to capital reserves in their name -reduction in charges
6. Solidarity (a union of interests or purposes or sympathies among members of a group, interdependence)- means that co-operators and co-operatives stand together -members have the responsibility to ensure that all members are treated as fairly as possible
7. Honesty (quality of being honest; integrity)-Honest dealings with members suchas honest measurements, highquality, fair prices and calculation ofinterest payments.-coops are distinguished in themarket-place partly because theyinsist on honest measurements, highquality, and fair prices.-co-operatives have aspired honestdealings with their members, whichin turn has led to honest dealingswith non-members
8. Openness (an attitude of ready accessibility, not secretive)-reports to the General -regularly reveals to their membership, the publicAssembly and government-conducts consultation important information-accepts suggestions on their operations
9. Social Responsibility (the idea that businesses should not function immorally, but instead should contribute to the welfare of their communities)-they are open to the members of the community, andthey have commitment to assist individuals in helpingthemselves -concerned about the health of individuals within the community. -they therefore, have an obligation to strive to be socially responsible “in all their activities”
10. Caring for others (assisting/helping other coops)-within their financialcapacity to do so, manycooperatives have madesignificant contributions ofhuman and financialresources to theircommunities.-big coops have providedextensive assistance to thegrowth of cooperativesthroughout the developingworld.
PRINCIPLES1. Voluntary and Open Membership2. Democratic Member Control3. Member Economic Participation4. Autonomy and Independence5. Education, Training and Information6. Co-operation Among Co-operatives7. Concern for Community
First Principle: Open and Voluntary MembershipCooperatives are voluntary organizations,open to all persons able to use their servicesand willing to accept the responsibilities ofmembership, without gender, social, racial,political or religious discrimination.Practices:-No compulsory membership-No discrimination against any person onaccount of religion, race or political belief.
Second Principle:Co-operatives are democratic organizationscontrolled by their members, who actively participate in setting theirpolicies and making decisions. Men and women serving as electedrepresentatives are accountable to the membership. In primary Co-operatives members have equal voting rights ( one member, one vote)and Co-operatives at other levels are organized in a democraticmanner.Practices:-One man, one vote & No proxy voting-General assembly as supreme authority-Decision-making by majority vote-Direct or indirect participation of all members in the control of theorganization (i.e. through the election of officers, board of directors, auditcommittee, other committees).
Third Principle: Member Economic ParticipationMembers contribute equitability to, anddemocratically control, the capital of their Co-operative. At least part of that capital is usually thecommon property of the co-operative. They usuallyreceive limited compensation, if any, on capitalsubscribed as a condition of membership. Membersallocate surpluses for any or all of the followingpurposes; developingthe co-operative, possibly by setting up reserves , partof which at least would be indivisible; benefitingmembers in proportion to their transactions with theco-operative, and supporting other activities approvedby the membership.
Practices:-Limited interest on share capital-Limitation of individual sharecontribution, not more than 20% oftotal capital-Provision of reserve funds-Provision of reserves for thedevelopment of the coop-Distribution of interest on Capitaland Patronage refund
Fourth Principle Autonomy and IndependenceCo-operatives are autonomous, self-help organizationscontrolled by their members. If they enter intoagreement with other organizations, includinggovernments, or raise capital from external sources,they do so on terms that ensure democratic control oftheir members and maintain their co-opreativeautonomy.
Practices:-The General Assembly is the coop’s supremeauthority.-Leadership is confined to the coop members.-The control and leadership is through membersdemocratically -elected to high responsibilities andthe independence of the coop remains even whenthe coop becomes involved with other organizationssuch as funding agencies.
Fifth Principle: Education, Training and InformationCo-operatives provideeducation and training fortheir members, electedrepresentatives, managersand employees so that theycan contribute effectively tothe development of their co-operatives. They inform thegeneral public- particularlyyoung people and opinionleaders- about the natureand benefits of co-operation.
Practices:-Appointment of an education committee-Provision of an education fund out of netincome or from gross income-Requirements of pre-membership educationbefore admission-Ownership or membership meetings-Continuous training of officers and staff.
Sixth Principle: Cooperation Among CooperativesCooperatives serve their members most effectively andstrengthen the co-operative movement by workingtogether through local, national, regional andinternational structures. Practices:-Membership in secondary and tertiary organization-Participation in economic integration projects, likecentral fund, inter-coop trade, cooperative insurance,local, national, regional and international linkages.
Seventh Principle:Co-operatives work for the sustainabledevelopment of their communities throughpolicies accepted by their members. Practice:Members ensure that the policies they makewill benefit the whole cooperative community(work towards improving their livingstandards based on their social values withoutcompromising the resources available forfuture generations)
Koop Aralan (overview) There is one reality in cooperatives that many of us already know but which is not given much importance: Many rank and file staffs have no or very little training on cooperatives.This often results in low morale, low commitment of the staffwhile performing their jobs in the cooperative. To address this, theCoop Institute has developed the KoopAralan program. This projectaims to provide training to the coops’ rank and file, who are mostlyleft out of training programs (most programs are directed tomanagers and elected officers). These training programs will bedelivered through distance education, reaching a wide audiencesimultaneously across the country.The education materials of KoopAralan are in the form of easy-to-read booklets. Organized in a series, these booklets are meant toincrease and broaden the staff’s knowledge of the coop enterpriseand address work-related issues.
Specifically, the KoopAralan:Equips enrolees with working knowledge incoop. Modules are divided into sub-modules:Time and reader friendlyCan be completed on weekly basisInstitutionalizes staff training with meritsystem Is part of staff development programIs short-term, ladderized system of educationIs evidenced by a certificate of Completion tobe issued by Coop Institute
Features-A distance education course designed toimbue the staff with coop knowledge neededto make them appreciate and value their workin the cooperative.-This is a program designed to institutionalizestaff training at the coop level, involving theHuman Resource staff and the coop TrainingCoordinator as the lead mentors.-This can be considered a foundation for a long-term staff development program in the coop.-It is short-term, ladderized system ofeducation.
-Modules are divided into sub-modules which istime friendly to enrolees as they can beread/absorbed on a weekly basis.-The modules can be completed within two tothree months depending on the pace of students.-After each module, a test will be given to theenrollee to ascertain if the enrollee is ready toproceed to the next module; passers shall begiven a certificate of module completion issued bythe Coop Institute.-The certificate of course completion can be usedas basis for staff evaluation as it can carryadditional merits for career advancement,personal growth, promotion and salary increase.-The Coop Institute will provide the participatingcoop with the grades of its enrollees.