JONES ATIN TO CREDIT COOPERATIVE

2nd Pre-
Membership
Seminar
April 17, 2022 via Google Meet at 6 o’clock in the Evening
 IMPORTANCE OF PMES
1. To create awareness and motivate the members.
2. For participants to gather information that can guide them in deciding to join or not to join the
cooperative.
3. To know the duties and responsibilities of members, officers and management staff of the
cooperative.
4. To know the existing rules and regulations of the cooperative.
5. To understand the importance of cooperativism.
6. To know the sources of funds in the cooperative.
7. To be aware of the cooperative principles and practices.
8. To know the different types of cooperative as guide on what type of business activities to
undertake.
9. To make the participants become responsible members and effective leaders and staff of the
cooperative.
10. It is a requirement before one is accepted as member of the cooperative.
11. It is a requirement of cooperative registration with CDA.


 COOPERATIVE

A SOCIO-ECONOMIC ENTERPRISE CATERING TO THE

REQUIREMENTS OF ITS MEMBERS AND INTERACTING
WITH THE COMMUNITY. IT EVOLVES AROUND ITS
MEMBERS AND THE COMMUNITY THEY SERVE.

 IT HAS…..
Clear definition
Strong foundation (binding principles)
Distinguishing features
Unifying character

 IN ESSENCE…..

C - Capitalized by its members

O - Owned by the members
O - Operated by the members
P - Patronized by its members

COOPERATIVE

An autonomous and duly registered association of persons with

a common bond of interest who have voluntarily joined together
to achieve their social, economic and cultural needs and
aspiration by making equitable contribution to the capital
requirement, patronizing their products and services and
accepting a fair share of the risk and benefits of the undertaking
in accordance with internationally accepted cooperative
principles.
ELEMENTS
Autonomous - Independent
Duly registered - Juridical personality
Common bond - Unifying features
Voluntary join - Own accord/ free will
To attain needs .. - reason for being
Equitable capital - Members’ stake contribution
Patronage - Members business Participation
• Sharing the risk and benefits
• Cooperative Principles
 THE PRIMARY OBJECTIVE OF EVERY
COOPERATIVE IS TO HELP IMPROVE THE
QUALITY OF LIFE OF ITS MEMBERS. TOWARDS
THIS END, THE COOPERATIVE SHALL AIM TO:

 GOALS AND OBJECTIVES OF COOPERATIVE

1. To attain increase income, savings, investments, productivity, and
purchasing power, and promote among themselves equitable
distribution of net surplus through maximum utilization of
economies of scale, cost-sharing and risk-sharing.
2. To provide optimum social and economic benefits to its members.
3. To teach members efficient ways of doing things in a cooperative
manner.
 GOALS AND OBJECTIVES OF COOPERATIVE
4. To propagate cooperative practices and new ideas in business and
management.
5. To allow the lower income and less privileged groups to increase
their ownership in the wealth of the nation.
6. To actively support the government, other cooperatives and people
oriented organizations, both local and foreign, in promoting
cooperatives as a practical means towards sustainable socio-economic
development under a truly just and democratic society.
7.
GOALS AND OBJECTIVES OF COOPERATIVE
7. To institutionalize a dynamic saving mobilization and capital build-
up schemes to sustain its developmental activities and long term
investments, thereby ensuring optimum economic benefits to the
members, their families and the general public.
8. To implement policy guidelines that will ensure transparency,
equitable access to its resources and services, and promote the interest
of the members.
9. To adopt such other plans as may help foster the welfare of the
members, their families and the community.
Residential

Institutional

Associational

Occupational

 COOPERATIVES PRINCIPLE
Open and Voluntary Membership
Democratic Members Control
Members Economic Participation
Autonomy and Independence
Education, Training and Information
Cooperation Among Cooperatives
Concern for the Community
 PURPOSE AND OBJECTIVES
Define the reason for its existence
Specify the business activity to be undertaken
Define the intention they want to pursue
Identify the kind/type of cooperative they are
2. You can receive equitable share from
cooperative business profits in a form
of interest on Capital (dividend) and
Patronage Refund.
3. Free from exploitation of other loan
sharks and other unscrupulous
service providers.
4. Provide opportunity to increase your
income and savings through livelihood
projects and business ventures.
5. You will have lesser worries for any
eventualities in life.
Types and Categories of Cooperatives
In terms of membership:
Primary
Secondary
Tertiary

In terms of organization:
Federation
Cooperative Union
Power and Capacities of Cooperatives
Exclusive use of its registered name
To sue and be sued
Right of succession
Adapt and/or amend its own Articles of Cooperation
and its By-Laws
To accept and/or bestow grants, donation,
subsidies, legacies etc,
The right to own properties and build its assets
and to dispose them when needed
Power and Capacities of Cooperatives
Right to borrow or access funds
Avail of the preferential rights given
to cooperative under RA 7160
To organize and operate schools in
accordance with RA 9155
To have an official postal/business address
To keep certain books and records pertaining to cooperative
and to make the same available and open to its members and
the representative of the Authority.
To keep and maintain records of accounts reflecting true
and correct condition of the result of operation.
To prepare and publish annual report of the affairs of the
cooperative at the end of the year
Bonding of accountable officers
Keep and maintain members’ registry book
Composition of General Assembly
The general assembly shall be
composed of such members who are
entitled to vote under the articles of
cooperation and bylaws of the
cooperative.
 Mode of General Assembly
Full membership Assembly–shall refer to a duly
assembled membership for the purpose of
exercising all the rights and performing all the
obligations pertaining to cooperatives, as
provided by this Code, its Cooperation and By-
laws.
 Mode of General Assembly
Representative Assembly- shall refer to the full
membership of the body of representatives elected
by each of the sectors, chapters or districts of the
cooperative duly assembled for the purpose of
exercising such powers lawfully delegated unto them
by the general assembly in accordance with its By-
laws.
 Powers of General Assembly
The general assembly shall be the highest policy-making body of the cooperative and shall
exercise such powers as are stated in the Code, in the articles of cooperation and in the
bylaws of the cooperative. The general assembly shall have the following exclusive powers
which cannot be delegated:

(1) To determine and approve amendments to the articles of cooperation and bylaws;

(2) To elect or appoint the members of the board of directors, and to remove them for
cause. However, in the case of the electric cooperatives registered under this Code,
election of the member of the board shall be held in accordance with its bylaws or election
guideline of such electric c operative; and

(3) To approve developmental plans of the cooperative.

 MEETINGS
A Regular meeting shall be held annually by the general assembly on a date fixed in
the bylaws, or if not so fixed, on any dated within ninety (90) days after the close of
each fiscal year: Provided, That notice of regular meetings shall be sent in writing,
by posting or publication, or through other electronic means to all members of
record.
Special meeting of the general assembly may be called at any time by a majority vote
of the board of directors or as provided for in the bylaws: Provided, That a notice in
writing shall be sent one (1) week prior to the meeting to all members who are
entitled to vote. However, a special meeting shall be called by the board of directors
after compliance with the required notice within from at least ten per centum (10%)
of the total members who re entitled to vote to transact specific business covered by
the call.
 MEETINGS
In the case of a newly approved cooperative, a special general assembly shall
be called, as far as practicable, within ninety (90) days from such approval;

The Authority may call a special meeting of the cooperative for the purpose of
reporting to the members the result of any examination or other
investigation of the cooperative affairs; and

Notice of any meeting may be waived, expressly or impliedly, by any

member.
 QUORUM
A quorum shall consist of at
least twenty-five per centum
(25%) of all the members
entitled to vote.


. Kinds of Members
A cooperative may have two (2) kinds of members, to wit:
(1) regular member- one who has complied with all the membership
requirements and entitled to all the rights and privileges of membership.

(2) associate member - is one who has no right to vote nor be voted upon and
shall be entitled only to such rights and privileges as the bylaws may provide:

Provided, That an associate who meets the minimum requirements of regular

membership, continues to patronize the cooperative for two (2) years, and
signifies his/her intention to remain a member shall be considered a regular
member.
Every member who is entitled to vote has the following rights:
Participate in the deliberation during membership meetings;
Vote on all matters brought before such meetings
Seek any elective position, subject to the provisions of the by-laws
Avail himself of the services of the cooperative without any
discrimination whatsoever, upon compliance with the conditions
and requirements thereof;
Inspect and examine the books of accounts, the book of minutes of
meetings, the share register, and other records of the cooperative
during office hours and to exercise other rights and privileges of
membership.


BOARD OF DIRECTORS
Unless otherwise provided in the bylaws, the direction and
management of the affairs of a cooperative shall be vested in a board
of directors which shall be composed of not less than five (5) nor more
than fifteen (15) members elected by the general assembly for a term
fixed in the by-laws but not exceeding a term of two (2) years and shall
hold office until their successors are duly elected and qualified, or
until duly removed for cause.


POWER OF THE BOARD OF DIRECTORS

The board of directors shall be responsible for the
strategic planning, direction-setting and policy
formulation activities of the cooperatives.

The members of the board of directors shall not hold any other
position directly involved in the day to day operation and
management of the cooperative.
 MEETINGS AND QUORUM
(1)In the case of primary cooperatives, regular meetings of the board of directors shall be held at
least once a month.

"(2) Special meetings of the board of directors may be held at any time upon the call of the
chairperson or a majority of the members of the board: Provided, That written notices of the
meeting specifying the agenda of the special meeting shall be given to all members of the board at
least one (1) week before the said meeting.

"(3) A majority of the members of the Board shall constitute a quorum or the conduct of business,
unless the bylaws proved otherwise.

"(4) Directors cannot attend or vote by proxy at board meetings.

 COMMITTEES OF COOPERATIVE
The bylaws shall provide for the creation of an audit, election, mediation and
conciliation, ethics, and such other committees as may be necessary for the
conduct of the affairs of the cooperative. The members of both the audit and
election committee shall be elected by the general assembly and the rest shall
be appointed by the board. The audit committee shall be directly accountable
and responsible to the general assembly. It shall have the power and duty to
continuously monitor the adequacy and effectiveness of the cooperative’s
management control system and audit the performance of the cooperative
and its various responsibility centers
 Capital Sources of Funds
Capital Sources - Cooperatives may derive their capital from
any or all of the following sources:

"(1) Member’s share capital;

"(2) Loans and borrowings including deposits;
"(3) Revolving capital which consists of the deferred payment
of patronage refunds, or interest on share capital; and
 Capital Sources of Funds
(4) Subsidies, donations, legacies, grants, aids and such other
assistance from any local or foreign institution whether public or
private: Provided, That capital coming from such subsides,
donations, legacies, grants, aids and other assistance shall not be
divided into individual share capital holdings at any time but shall
instead form part of the donated capital or fund of the cooperative.

Upon dissolution, such donated capital shall be

subject to escheat.
 Capital Sources of Funds
“ART. 73. Limitation on Share Capital Holdings.- No
member of primary cooperative other than cooperative
itself shall own or hold more than ten per centum (10%)
of the share capital of the cooperative.
 Capital Sources of Funds
"ART.75. Capital Build-Up.- The bylaws of every cooperative
shall be provided for a reasonable and realistic member capital
build-up program to allow the continuing growth of the
members’ investment in their cooperative as their economic
conditions continue to improve.
 Sources of Funds
" INTERNAL SOURCES

•Share Capital
Initial Subscription
Continuous Capital Build-up
 Sources of Funds
INTERNAL SOURCES

Deposits - time
-savings
Revolving Capital
Interest on Share Capital
Patronage Refund } Retention
 Sources of Funds
External Sources
•Loan/s
•Borrowing/s
•Subsidies/Grants/Aids/Donations
 DOING BUSINESS
REVENUES:
Lending (credit)
Sales (consumers; marketing)
Service (service contract; management fee; etc)
OTHER REVENUES (MEMBERSHIP FEES; ETC.)
COST:
COST TO SELL
COST OF SERVICE
Others
 DOING BUSINESS
Income:
Interest on Loan 100,000
Membership fee 5,000
Other Income 3,000
Total 108,000

Less Expenses:
Salaries and wages 12,000
Organizational expenses 20,000
Taxes and Licenses. 1,000
Bond of Account Officers 2,000
Total 35,000
Net Surplus 73,000
 DOING BUSINESS
Net Surplus – shall not be construed as profit but
as excess of payments made by the members for
the loans borrowed, or the goods and services
bought by them.
 ALLOCATION AND DISTRIBUTION
NET SURPLUS

LESS: STATUTORY FUNDS

RESERVE FUND
COOPERATIVE EDUCATION & TRAINING FUND
COMMUNITY DEVELOPMENT FUND
OPTIONAL FUND

NET SURPUS FOR DISTRIBUTION RETURN TO MEMBERS

 ALLOCATION AND DISTRIBUTION OF NET
Order of Distribution: SURPLUS
Not less than 10% for General Reserve Fund
Not more than 10% for Coop Education and Training Fund
Not more than 7% for Optional fund
Not less than 3% for Community Development fund
 ALLOCATION AND DISTRIBUTION OF NET SURPLUS
General Reserve Fund -shall be used for the stability of the coop. An amount
for the reserve fund which shall be at least ten per centum (10%) of net
surplus: Provided, That, in the first five (5) years of operation after
registration, this amount shall not be less than fifty per centum (50%) of
the net surplus
Education and training Fund – half of the amount maybe spent by coop for
their education and training while the other half be credited to apex
organization.
Optional Fund – use for land and building and any other necessary fund
Community Development Fund –shall be used for projects or activities that
will benefit the community where the cooperative operates.
ALLOCATION AND DISTRIBUTION OF NET SURPLUS
The remaining net surplus shall be
made available to members in the form
of :
1.Interest on share capital
2.Patronage refund
 Allocation and Distribution
Income:
Interest on Loan 100,000
Membership fee 5,000
Other Income 3,000
Total 108,000

Less Expenses:
Salaries and wages 12,000
Organizational expenses 20,000
Taxes and Licenses. 1,000
Bond of Account Officers 2,000
Total 35,000
Net Surplus 73,000
 Distribution of Net Surplus
Net Surplus 73,000

Statutory Funds:
10% General Reserve Fund 7,300
10% Education & Trng. Fund 7,300
7% Optional fund 5,110
3% Community Dev’t. Fund 2,190

Total SR 21,900

For distribution on Interest on Share Capital

Capital and Patronage Refund 51,100
 FORMULA
Formula:

Rate of Interest on share capital (ISC)=

% (Net Surplus - Statutory Reserves
_____________________________________________
Total Average share Month (TASM)

Rate of Patronage Refund (PR) =

% (Net Surplus - Statutory Reserves
_____________________________________________
Interest on Loans
 FORMULA
Rate of Interest on share capital (ISC) =

% (Net Surplus - Statutory Reserves

_____________________________________________
Total Average share Month (TASM)
Assuming 70% of 51,100 is for ISC = 35,770
Assuming 30% of 51,100 is for PR = 15,330
 Distribution of Net Surplus
Rate of Patronage Refund

% (Net Surplus - Statutory Reserves

_____________________________________________
Intetest of Loan
30% OF 51,100 = 15,330
Interest on Loans = 100,000
15,330 = 15.33%
__________
100,000


THANK

YOU
 OPEN
FORUM