CHAPTER 5: Cooperatives Development Program

Reporter: Jessa Mae Gaveria and Vanessa Palavino (Financial Management 3-C)

TYPES AND CATEGORIES OF COOPERATIVES

1. Credit Cooperative

2. Consumers Cooperative

3. Producer/Marketing Cooperative

4. Service Cooperative

5. Multipurpose Cooperative

CREDIT COOPERATIVE

One that promotes and undertakes savings and lending services among its members. it
generates a common pool of funds in order to provide financial assistance and other related
financial services to its members for productive and provided purposes.

Republic Act 9520. 2 important: Savings and lending- products of credit coop. technically, we
can say that this is the main purpose of a credit cooperative.

PURPOSE:

1. To encourage thrift and savings mobilization among the members.

2. To generate funds and extend credit to the members for productive purposes. 2.5% per month

 Republic Act 9520 is an act amending the cooperative code of the Philippines to be
known as the "Philippines Cooperative Code of 2008"

Example:

• Metro South Cooperative Bank

• PLDT Employees Credit Coop.

CONSUMERS COOPERATIVE

Consumers Cooperative is one primary purpose of which is to procure and distribute

commodities to members and non-members.
Purpose of a consumers' cooperative association is to provide quality goods and services at
the lowest cost to the consumers as well as to its members/owners.

Example:

• ACDI Multipurpose Cooperative (it belongs also to consumer coop.)

PRODUCER AND MARKETING COOPERATIVES

This refers to groups of people engaged in the agricultural arena: farming, fishing, and forestry.
The co-op members may be farmers, landowners or owners of fishing operations. 
They are also engage in the supply of production inputs to members and markets their products.

 Marketing coop cater to producer-member providing services such as packaging,

promoting and selling products for them.

Example:

• Bacacay Fisherfolk Marketing Cooperative

• Employees Marketing Cooperative

SERVICE COOPERATIVE

Service Cooperative is one that engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electric light and power, communication, professional
and other services.

 It exist to provide a services to their members to meet the specific need in the community

Example:

• VILMMAR Manpower Services Coop.

• Workforce Pilipinas Tourism Services Coop

MULTIPURPOSE COOPERATIVE

Multipurpose Cooperative is one which combines two or more of the business activities of these
different types of cooperatives.

 Almost all cooperatives are now registered as multi-purpose coop. in order to

simultaneously undertake four functions i.e credit, marketing, purchasing and joint
utilization of resources.
CATEGORIES OF COOPERATIVES

Cooperatives shall be categorized according to membership and territorial consideration as

follows:

1) In terms of membership, co-op shall be categorized into

1. Primary- the members of which are natural persons

- Deals with individual.

2. Secondary- the members of which are primaries

- Primary coops are direct owners

3. Tertiary - the members of which are secondaries upward to one (1) or more
apex organization

- Secondary and primary are both direct members

These cooperatives the members of which are cooperatives shall be known as federation of
union, as the case may be; and

2. In terms of territory, cooperatives shall be categorized according to areas of operations which

may or may not coincide with the political subdivisions of the country
 Why Cooperatives Failed in the Past?
Reasons for failures of cooperatives in the past
1. Lack of adequate character and moral responsibility of management.

 Many cooperatives in the past were organized w/out proper and adequate trainings and
discipline. Others were hurriedly put up in compliance with the programs of the
government. Established simply to take advantage of the promised assistance from the
government.

2. Inefficient management due to lack of basic understanding of the basic principles of

cooperation.

3. Borrowing money under false pretenses.

4. Lack of adequate safeguards against unprincipled officers who granted loans to
themselves and their families and friends.

5. Too much government financial assistance in proportion to the money of the association.

6. Lack of democratic procedure in the election of officers, particularly the treasurer.

 Most cooperatives failed because the officers mismanaged the funds of the organizations.
These graft and corruption were not only true among cooperatives in the past, but also
among other Filipino associations at present. As usual, it is only the officers who get the
benefits.

7. Inadequate supervision.

8. Negative Values and Attitudes

 It is common among people that they do not mean what they say in their desire to please
people. More often than not, they do not like to say no. When they are invited to attend a
meeting, they say yes. But they do not attend and instead make good excuses.

 Filipino cultural values like manana habit, ningas cogon, and bahala na attitude constitute
a hindrance to the promotion of cooperatives.

It has been observed that the main problem is organization and management.
Who is going to sacrifice his time and effort in initiating the organization of a cooperative?
Who is encouraged to organize a cooperative when most of the prospective members are not
even interested to attend the first meeting?

 It is a matter of attitude and values. The people are not to be blamed for their negative
reactions towards the coop org. They know the value of cooperatives and its advantages.
 What they doubt, however, is the viability of the org and the honesty of officers. They
lack of trust and confidence.

An Excellent Plan and Program

Learning a good lesson from the past, our new cooperative development program has
been designed to eliminate the shortcomings of the old cooperative programs, and to assume a
more meaningful role in social and economic development.

 The new cooperative development program has evolved a more systematic and bigger
plan with good features of good organization and mgt. However, the problem of
transforming an excellent program into reality lies in the actual implementation.
>>attitudes of the people and those who are responsible in the implementation of the
program.

The Need for Honest and Competent Managers

Effective management is considered as one of the main factors of the success of a
cooperative organization.

The most qualified are persons of honesty, integrity, competence, and above-average
intelligence.
If there are leaders in the community who will sacrifice their time and labor in organizing
cooperatives, the growth of cooperatives will be faster.

The success of coop ultimately depends on people. The nature and quality of their attitudes,
values, and institutions are the essential determinants of the future of our cooperative movement.

Cooperatives–one of the key to success in agriculture. What will the administration gain by
actively supporting the creation of more cooperatives?
If farmers are getting together, developing a social form of business that relies on a sense of
community, it will lead to competitive farming, mechanization of farms, the application of the
latest technologies, the focus on high-value crops, the exclusion of the middleman and the
creation of effective supply and value chains.

 Over 20 million people in Germany are members of cooperatives; organizations that

work according to the motto: “What one person cannot accomplish alone can be
accomplished by many.” This enables them to establish enterprises they would not be
able to finance alone.

Cooperatives in the Philippines

Source: http://www.cda.gov.ph/resources/updates/statistics
SHORT QUIZ

1. This combines two or more of the business activities of these different types of cooperative

* MULTI PURPOSE COOPERATIVES

2. It is one that engages in medical and dental care, hospitalization, transportation, insurances
and other services

*SERVICE COOPERATIVES

3. This refers to groups of people engaged in the agricultural area such as farming, fishing and
forestry

*PRODUCER AND MARKETING COOPERATIVE

4. This refers to one primary purpose of which is to procure and distribute commodities to
members and non-members

*CONSUMERS COOPERATIVE

5. It promotes and undertakes savings and lending services among its members

*CREDIT COOPERATIVE

6-8) Give at least 3 reasons why cooperatives failed in the past.

•lack of adequate character and moral responsibility of management

• Inefficient management due to lack of basic understanding of the basic principles

of cooperation

•Borrowing money under false pretenses

•Lack of adequate safeguards against unprincipled officers who granted loans to

themselves and their families and friends

•Too much government financial assistance in proportion to the money of the

association

•lack of democratic procedure in the election of officers, particularly the treasurer

• Inadequate supervision

•Negative values and attitudes

9. What is the Republic Act that amends the cooperative codes of the Philippines?

*REPUBLIC ACT 9520

10. Give one (1) type of cooperative

• CREDIT COOPERATIVE

• CONSUMERS COOPERATIVE

• PRODUCER/MARKETING COOPERATIVE

• SERVICE COOPERATIVE

• MULTIPURPOSE COOPERATIVE