Informal Savings and Credit Institutions in the Urban Areas: The Case of Cooperative Credit Unions

INFORMAL

SAVINGS

IN THE URBAN

AND CREDIT INSTITUTIONS AREAS

COOPERATIVE

THE

CREDIT

CASE OF

UNIONS

by Mor/o B Lomberte

and Joyen Z BQ/bo$o

WORKING PAPER SERIES NO 88-06

April 1988

Philippine InstiYute for Development Studies

TABLE

OF CONTENTS

Page

List

of

Tables

List

of

Figures

and

Diagrams

Chapter i.

introduction A.

II.

IV.

V.

Cooperative an Informal Institution

B.

Objectives

C.

Scope

D.

Methods

Credit Credit

1

of

and

Union as and Savings

the

Study

io

Limitations'of

of

Data

the

Study

Collection Credit Union Ten Sample

A.

the

General Description of a CCU Brief

History

of

i0 11

Description of a Cooperative and Brief History of the Cooperative Unions

B. Ill.

The

i

15

of

Operations 15

the

Sample

CCUs

25

Analysis of the of the Sample

Operations Cooperative

and performance Credit Unions

62

A.

Operations

of

CCUs

62

B.

Performance

Interest

of

Rate

A.

Interest

B.

Lending

the the

Formation Rate

Ten

on

CCUs, and

Savings

1982

-1986

Trends Deposits

Rates

Saving, Borrowing of CCU Members

73 89 89 91

and

Lending

Behavior 104

t

A.

B.

Socio-Demographie Profile of

CCU

and Economic Members

Participation of CCU Members in their respective Credit Unions

104

108

Page C.

Alternative Sources

D,. VI.

Lending

Summary

Ways of of Credit Behaviorof

and

Saving for CCU

and Other CCU Members Members

conclusions

129 142 147

•References

155

Appendix

155

LIST

Figure

Diagram

Diagram

I.

i.

2.

The

OF FIGURES

Philippine

Financial

The Organizational a Typical CCU

The

Processing

AND

DIAGRAMS

Sector

Structure

4

of 19

of

Loan

22

LIST

_)F TABLES Page

III.l.

Membership

III.2.

Real

IIl.3.

Real Assets Sample CCUs

III.4.

III.5.

II!.6.

III.7. III.8. III.9.

IV.I IV.2 V.I

74

Total

Assets

Comparative Ten Sample System

Per

Member

Growth Rates CCUs and the

the

Ten

of the Banking 78

Ratio of Fixed Deposits (FD),. Savings Deposit (SD) and Time Deposits (TD) to Total Assets (TA) (In percent)

81

Ratio Assets

83

of Loans Outstanding (In percent)

Real

Loans

Outstanding

Real

Loans

Granted

Ratio of to Total

Lending

Rates

Loans Loans

Rates

Total

P)

84

Granted 86

(In

Percent 90

(In

Socio-Demographic Members

Percent

Per

Profile

of

Annum) the

I00

CCU 105

V.3

Factors the CCU

Motivating

V.4

Initial

Fixed

V.5

Outstanding Members as Interview

Profile

of

the

CCU Members

Members

107

to Join ii0

Deposits

Fixed of the

Given

of CCU

Members

iii

Deposits of CCU Date of the 112

Reasons Given for Fixed Deposits Reasons Deposits

(In

Total Real Number of

Savings Deposit Per Annum)

to

85

Economic

V.7

of

77

V.2

V.6

76

(In _000)

for

Planning

to

Increase 114

not

Increasing

Fixed 115

V.8

Outstanding Members as

Savings Deposits of CCU of the Date of the Interview

lt7

I

V.9

Reasons Savings

Given in Planning Deposit with the

V.10

Amount

V.II

Maturity Members

V.12

V.13 V.14

Uses

V.16 V.17

V.18

V.19

V.20

V.21

V.22

V.23

V.24

Between

Members

Increase 118

from

Loans

their

Borrowed

CCU

120

by 121

Loan

Application

and 123

of

CCU

Effective

Loan

Proceeds

Interest

Member

Interest Other

by

Period of from CCU

Duration Release

CCU V.15

Bor;owed

to CCU

Rate

Annum

on 126

Per on

Annum Excluding CCU Member Loans

Saving'Behavior

of

Motivating Banks

Travelling and Making/Withdrawing Transportation Incurred a Bank

Per

Loans

Rate Charges

Factors Save in J

124

in

CCU

Members

CCU

Members

127 130

to 132

'.

Waiting Time Deposits

in 134

Expenses (Roundtrip) Making a Deposit with 135

Frequency of Contribution, Average Amount of Contribution_ Amount Received Per Cycle, Average Length of Time of One Cycle, and the Average Number of Members Per Cycle in the Last Paluwagan

136

Borrowing Behavior January-September

138

Amount• Month Maturlty Consumers

of

Consumer

of CCU 1987 Loans

Members_

Granted

Per 144

Period

of

Trade

Total Outstanding Consumer of Date of Interview

Credits

to 145

Loans

as 146

ACKNOW

LEDGEMENTS

This study was only made possible by the willingness of many individuals to share their knowledge and experience with the authors. The authors are particularly grateful to Mr. James N. Roberson, Executive Officer, National Market Vendors Cooperative Service Federation, Inc. (NAMVESCO) who acted as an informal adviser of the research team; Mrs. Concordia E. Briginoy Chairwoman, Malabon Central Market Credit Cooperative, Inc.; Mr. Moises Sevilla, Manager, Paco-Soriano-Pandacan Development Cooperative, Inc.; Mrs. Leonora R. Avante, Manager, Baclaran Vendors Development Cooperative, Inc., Mr. Lazaro S. Isidro, Sr., Central Market Development Cooperative, Inc.; Mrs. Rosa F. Calilung, Manager, Marikina Vendors Development Cooperative, Inc.; Atty. Amando Tetangco, Manager, Divisoria Traders Development Cooperative, inc.; Mr. Felipe San Lugs, Manager, FEU Credit Cooperative; Inc.; Mr. Reynaldo T. Arciga, Asst. Manager, U.P. Credit Cooperative, Inc.; Mrs. Primitiva G. Nisperos, President, DSE (CBP) Kilusang Bayan for Credit, Inc.; Mr. Rodrigo M. Profeta, Manager, PLDT Employees Credit Cooperative, Inc.; and the 82 sample respondents who willingly cooperated. Mr. Eddie de Castro of NAMVESCO helped in the data collection stage of this study. Thanks are due to Dr. P.B. Ghate (Asian Development Bank), Dr. Mahar K. Mangahas (Social Weather Stations, inc.), Professor Edita A. Tan (university of the Philippines) and professor Douglas Graham (Ohio State University) for sharing their valuable comments on the firstdraft of this paper. This study is part of a larger study on the informal credit markets in the Philippines sponsored by the Asian Development Bank (ADB) through the Philippine Institute for Development Studies (PIDS).

INFORMAL

SAVINGS AND CREDIT INSTITUTIONS

IN THE URBAN AREAS : THE CASE OF COOPERATIVE CREDIT UNIONS by Morio

I.

B. Lomberfe

ond Joven Z. Balboso

INTRODUCTION

A.

THE

COOPERATIVE CREDIT UNION SAVINGS INSTITUTION

The

COoperative

segment

in

the

Credit

entire

AS

AN

Union

INFORMAL

(CCU)

cooperative

is

CREDIT

the

movement.

AND

most

important

Records

show

that

%

among most

the

successful.

every

parish

priests into

different

promoted

private

The exact present_ (NATCCO)

in

and

whole

number the is

types

cooperatives_

Like

rural

the

country.

the

CCU

CCUs_

conducting

*Respectively, Development Studies Philippines'School

is

There

as

indeed

Vice-President, and Graduate of Economics.

was

well

large_

membership

census

have a

of

of all

has

time Now

as

been in

it

parish

has

spread

markets.

nobody

their

the

almost

when

public

but and

CCU

appeared

vigorously.

Confederation a

the

CCUs

offices

their

National

banks,

movement

government

movement of

of

knows

the

assets.

Cooperatives, cooperatives

Philippine Institute Student, University of

At Inc.

in

for the

the

2 country, belong will

by

including to

the

try

to

It

has

informal

clarify

been

a dualistic

formal

say

that

there

exfst

other

which

perform

the

financial jump

On

LDCs

hand,

finance"

big

to

are

"outside

one

certain

orbit

of

market

the

order

to

handr

CCUs

paragraphs

exist

the

regulated

by

the

the

informal

from

one

case

in

the

a continuum_

with

participants

at

degrees.

credit

functions and

This

impression

go

characterized

there

institutional [1987]).

leaves

are

financial

(Chandavarkar

in

however,

argument.

which

the

many,

succeeding

(FCMs)

operate

a

The

markets

(ICMs)

make

this

markets.

to

system.

markets

the

credit

Unknown

financial

On

regulated

unions.

fashionable

credit

government.

of

credit

but

officially

characterization that

segmented

one

has

sector

to

to the

other.

This instead

is

is

regulated others,

to

problem

now

determine

most

flexible

regulations

achieving

that is

where

The

the

varying

thereby

similar

are

not

of

the

CCU

important because imposed

reserves

and

deposit

rates,

requirements"

a greater

to

on

mandatory

in are

of

line

we

financial

less

degree

the

What

the

unregulated

draw

have market

regulated

than

flexibility

almost

participants.

so

that

we

The

can

really

belongs.

hallmark they

liquidity

(Ghate

Some

completely

where

Philippines.

the

of

ICMs

function formal

[1986]).

flexibility.

"outside

sector

requirements, credit

is

with

the

In

s_

and

purview

respect

to

on

lending

ceilings

target

ICMs

audit

thephilippines,

and

of

capital_ and

reporting only

the

3 Central

Bank

directly

imposes

Under

its

intermediaries the

Bank

Given

this

participants

are

by

second not

not to

the

law

with

is

registered

regulations

because

of

that

they

however,

that

sanctions

authorities. can

only

have

extended

the

been

are

now

A description review issues. financial directly

Bank

of The

its

of

two

of

them

the

a

(see

of It

but

and

supervised.

which would

in

become

known after

to all,

system

changes

noting

that

Central

Bank

and

a brief these

help

clarify

be

described

by

I),

sense

institutions.

worth

regulatory

Bank

the

can

the

be

operations.

outside

financial

are

_ Bank.

regulatory is

operated

Figure

their

registered

best

those

Central

sanctions,

once

under

to

they

and

environment

of

they

illegal

once

number

Philippine

groups

Central

If

of

years.

can

the

subjected

officially

system

them

be

regulations

registered

intermediaries

supervision

agency

agency.

nature

to

which

financial

financial

intermediaries

necessarily

quite

regulatory

supervising

to

not

to

by

financial

very

applied

the

that

consists

government

imposed

have

through

of

direct

group

government

are

intermediaries

regulations

first

of

the

only

say

classify

a particular

Philippines,

effected

financial

be

the

can

The

then

Central

be

in

will

can

we

any

they

then

intermediaries

thez ICMs.

composed

with

financial

may

under

regulations

registered,

Notes

fall

ICMs.

from

group

on We

definition,

registered

exempted The

do

belong

in

_re

regulations

supervision.

which

Central

which

such

grouping

agency(ies)

i I-

째 ._I m LU

E

Z _

째

_ Q

.II-

/

_;_I

,_I

5 The

Central

Bank

was

all

banking

institutions.

was

meant

to

ensure

instruments. reserve to

The

_ts the

usual

requirements,

these

became

with

Central

supervision.

nies/entities

in

Bank.

financial

On

basis

financial

categories: lending

of

own

regularly

institutions from

instruments

promissory

notes,

from

the

i

instruments).

i

financial

of may

the

other

in

public

the

(either

The

second

through

intermediaries

and

etc;

and by

the

of

the

deposit

and

(3)

but

do

or

groups the

the

regis-

three

broad

engage in

such

funds

Of

compa-

regulated

into

the

deposits

(NBFIs).

many

engage

deposits_

third

of

called

public

public

as

umbrella

agencies

regularly

the

of

in

repression

grouped

regularly

lending

1960s,

the

bolder

operations,

which

than

applied

however,

the

being

their be

from

and

market.

which

participations_

engaEe

I

nature

the

were

and

the

policy

capital

etc._

instruments,

in

obtained

obtained

debt

the

minimum

government

to

oversee

institutions

grew,

the

without

financial

institutions

funds

in

response

emerge

as

to

monetary

outside

specific

institutions

(2)

funds

to

of

(i)

deposits; of

new

started

the

in

the

sophisticated

markets

Likewise_

banking

economy

Thus, with

mandate

ceilings,

instruments

credit

system_

substitutes,

tered

new

the

the

more

registered

participated

over

such

rate

As

the

of

regulations_

experimenting Bank

control

interest

system

given

e_fectiveness

institutions.

financial

Central

explicitly

in

the in

as

form

the

issuance

of

lending

of

their

acceptances,

institutions not

the

which

obtain

their

funds

own

are

called

three

groups,

only

Bank.

The

debt

non-bank the

r

Y

first

was

under

the

supervision

of

the

Central

rest

6 were

not

regulated

tered

with

change

Commission,

could

be

a of

of

and

lines

the

financing

investor, tive,

insurance

tion_

and

person

financial name _

entity

"investment", import

connoting

resourof

the

monetary

weakness the

or

by

control

less

and

along

a

the

non-bank

dealer/broker,

savings

holds

the

financial

financial investment

funds

any

comlending

manager,

coopera-

and

associa-

loan

association.

such

"lending"

include: with

house,

broker,

loan

NBFIs registered

as

non-stock

.which

includes

this

definition,

securities

intermediary_ which

such

1960s,

control

under

and/or

money

and

the

of

is.more

investment

company,

building

or

an

company,

as

total

direct

NBFIs

body

pawnshop,

in

effectiveness

Bank

regulatory

pany_

Exk

Shaw.

licensed

as

the

This

and

and and

of

corrected

Bank.

Central

such

volume

and

entity

intermediary,:

in

the

regis-

ICMs.

especially

the

were

Industry),

NBFIs,

reforms

Gurley

or

government

A

threatened

they Securities

the

to

institutions

by

person

the

subject

Central

to

of

decline system

the

According

(b)

of

financial

suggested

Trade

segments

growth

This

of

A

as

banking

supervision

(a)

Department

Thef972 all

although (e.g.

financial

policy.

Bank, agencies

considered

Bank.

putting

Central

corresponding

the

Central

the

government

phenomenal

generated ces

other

then

The

by

itself as

by

term

and/or

any

out

the

as

use

a non-bankin_

of

"financing"

a

,. "finance"

word/phrase

intermediation,

business

of or

an

simila_ -entity

,

7 which

advertises

engaged

in

itself

a

as

a

function(s)

financialintermediary_

where

financial

and

is

intgrmediation

is

implied.

in The

general_

term

•time.

"public"

the

All

they

the

vision

of

(FCMs).

the

ties.

For

of

can

effectively

finance getting

across banks

unlike

in

companies an

from

the

•creditors

license are

at

to

not

which

are

public. any

have

allowed

are

have

one

"quasi-

to

borrow

from

among

the

debt

it

is

then and

clear

are

financial

enti-

are

than

subject and

frequently not

as

so

to loan

monitored

only

well

violated,

in from

that

lending

countries.

succeeded

authorization

requirement,

borrowings

includes

if

markets

the that

sanctions

mere

regulacan

be

violators.

pawnshops other

Their

powers and

of

instruments

accounts,•

visitorial

credit

super-

capital•requirements

ratio.

Supervision

the

capital

types

debt

under

formal

minimum

higher

implemented_ on

the

the

different

DOSRI

but

above,

companies_

to

to

Their

Bank.

fully

the

belong

requirement

imposed

From

FCMs,

Bank

varies

rules,

be

they

institutions

subject

Central

issuance

finance

deposits

particularly

the

tions

that

all

reserve

portfolio,

more a

case

institutions.

specific

by

are

example,

non-banking

obtain

borrow

issue.

Central

this

to

or

which

financial

They

although

in

allowed

twenty

may

provided

instruments

not to

NBFIs

functions_

public

are

refers

However,

banking"

a

NBFIs

There borrowing the

Central

in

the

investors was

belong

a time

from Bank.

Philippines,

the

to

the

when

several

public

without

These

were,

of

8 course,

illegal.

only

when

Bank

acted

a crisis

under

the

insurance

own

insurance to

members.

required

the

purpose

ascertain

to of

the

which

to

system,

insurance

group

the

end,

under under to

the the submit

Cooperatives

their

of

the

its

control

financial

from loans

Bankfng

financial

of

their to

Act_ the

part

members

are

registered

cooperative Central to

which

the is

at

Bank. Central attached

credit

end

are

assoand,

Except rural

unions

Nor

FCMs.

loan

only. as

'are

they

at i for

banks no_

required

Bank.

The

to

Department

the

the

cooperative

and one

the

of

the

the

to

credit

allows

of

savings

members

but

monetary,

liquidity

are

Bank,

them

total

their

which

reports

Development,

mutual

Central

this

considered

like

the

of

companies

Since

institutions

operate

ruralbanks

over

the

sale

instruments

supervise on

countrY.

maybe

deposits

supervision

operations

limited

the

debt

to

regu-

insurance

insurance

statistics to

to

still

from

never

Insurance

that

of

However;

have

empowered

noted

issuance

necessarily

of

providing

Rural

the

TheCentral

The

mainly

public

violators.

although

come

NBFIs.

not

of

They

raising

cooperative

from

be

the

public,

is

lending,,

funds

the

Bank.

body, to

and 1981.

and

Central

is

direct

companies

ciations,

the

is

maintain

unions.

other

It

by

situation

Bank

the

financial

effects

Central

credit

issued submit

exchange

Another

not

of

government

of

Their

in

license

independent

in

authorities system

the

both

an

engage

those

are

and

is

the

financial

revoking

policies,

similar

to

companies.

also

their

the

supervision

which

companies to

by

known

companies,

Commission, late

was

hit

swiftly

Insurance been

It

Bureau

of of

9 Agriculture,

is

empowered

unions.

However,

include

a monitoring

reserve

credit

imposed

by

thus

them

from

as

on

the

are

subject

they

a

cooperative

credit

Central

considered

as

part

landlord-lenders, farmer-lenders them

of

the

unions,

deposits

for

by

the

Central financial

rules.

As

are

that

they

they

may

These

such,

also

are

also

not

likewise

be

the

ROSCAs_

tradermiller among

_hile

others

many

financial

include

moneylenders,

on-lendinE

under

to

there

suppliers,

professional

regulations

perform

extent

ICMs.

of

any

coo-

ICMs.

regulations,

traders/input and

raise

Bank

the

who

To the

of

Thus,

Bank's

not

imposition

compared

of

do

taxes.

monitored

Central

segment

the

and

intermediaries

flexibility

functions.

to

free

financial

credit

minimal

or

virtually

institutions/indlviduals

intermediation

are

portfolio

under

considered

cooperative

intermediation

greater

operatinK

Apart other

other

Neither

giving

maybe

loan

Bank

the

functions

operate

Central

intermediaries they

the

and

jurisdiction.

Bank,

of

of

unions

the

regulate

regulatory

requirements

perative

its

its

to

lenders;

others. use

their

Some own

funds,

InterestinEly cooperative bank

and

study

of

undertaken.

credit

enough, unions,

some

thrift

the

Philippine

banks.

some are

of

even Yet

cooperative

these

ICMs,

larger

than

up to

this credit

specifically the

time, unions

larEest no

the rural

in-depth has

been

I0 B째

,OBJECTIVES

This examine

are

study the

(CCUs)

as

the

OF

THE

has

role

trace

2.

To

examine

3.

To

evaluate

4.

To

examine

To

the

are

6.

other The participation markets.

C.

and

CCU

this

are

the

saving

2.

To

examine

the

borrowing

3.

To

examine

the

lending

However,

AND LIMITATIONS

most

a

number

in

the

of

them

trends

Unions

Under

this

is

CCUs;

deposits

and

over

of

to

the

CCUs

loans

of

time; with

formal

between

determine

formal

and

CCUs

of

and

behavior

of

of

credit

members; CCU

CCU

members;

and

members.

STUDY

studies

focused

of

degree

objectives:

CCU

behavior

the

informal

specific

behavior

literature have

of

institutions.

OF THE

of

CCUs;

competition

following

the

emerged

their

of

in

examine

have

on

objective

To

Recently_

to

and

I.

SCOPE

rates

credit

members

of

flexibility

linkages

degree

and

general

is

Credit

institutions.

stability

of

institutions;

of Under

degree interest

the

first

CCUs; and

possible

savings

second

of

determined

examine

Cooperaiive

savings

growth

how

of

The

objectives:

the

determine

To

and

origin

the

financial

objectives.

performance

specific

To

5.

general

credit

i.

CCUs

two

and

informal

following

STUDY

on

(see on

informal Lamberte the

rural

and

credit

markets

Lim

[1987]).

sector

and

only

11 very

_w

on

this

gap.

The (CCUs)

study as

sector.

a

they

operate civic

and be

and

in

In

urbanareas,

dominant.

industrial

and

at

study

METHODS

OF

Due

budgetary

CCUs

sample.

operating

DATA

Six

are

into which

is

credit

among

in

loan

since

d ue

to

con_nunity

focuses

.on

markets. the

second

"

market-based urban

Community-based ar_as,

which

associa-

public

union.

by

employees

while

and

understandable

urban

and

union,

credit

centers. in

operate

to which

CCUs where

savings

urban

spearheaded

offices

a

,the

CCUs

usually

institution-based

therefore

D.

according

institution-based

private

closed-type

all

CCUs.

to

and

CCUs

relationships

the

groups

are

(2)

Unions

in

and

commercial

flourish

three

fill

markets

community

the

market-based

the

a

credit

partly

Credit

_oommunity-based

0pen-type

This

interpersonal this,

are

to

(i)

(.3) market-based

groups

tries

Cooperative

into.

themselves,

an

the

informal

leaders;

is

study

namely:

government

group

to

classified

based#

third

hardly

be

organize

first

are

,of the

religious

found

and

The

may

This

itself

a specific

voluntarily tion;

segment

are

in

sector.

limits

CCUs

where

can

the_urban

areas credit

the

CCUs

lack

members.

of In

are unions close

view

institution-based

of And

COLLECTION

constraint, market-based

in Metro Manila.

six largest market-based

only and

ten four

CCUs are

are

Included_

in

institution-based

We have limited ourselves

CCUs and the four largest

to the

institution-

12 based

CCUs

period

of

growth

perspective.

We

since time.

This

identified

financial

of

nal

Market

Mr.

of

Metro

information

Manila

utilized

the

managers.

with

founding

about

the

cial

records

among

us

substantial

of

a historical

of

the

assis-

the

Natio-

FederatiOn,

six

largest

belonging

inputs

Cooperatives

sought

Officer

conducted

as

of

through

Inc.

market-based

to

NAMVESCO.

and

the

in the

bits

of

construction

of

schedule. two

the

other

the

were

sets to

of

the

structured

CCU

Aside

relevant

and

were

primarily

CCU.

interview

memberS,

interviews

members/officers

and

we

Service

Unstructured

of

CCUs,

CCUs

used

a

CCUs

Bureau

Executive

for

administered

history

benefit

the

market-based

were

The

was

to

Cooperative

interview

One

the

for

institution-based

submitted

from

gathered

dules.

study

of

interviews

study

Operating

Roberson,_the

structured

CCU

the

identified

Preliminary

the

CCUs

Vendors who

been

sample

For

James

(NAMVESCO), in

gives

(BCOD).

tance

have

our

records

Development

CCUs

they

to

from

the

documents

of

sche-

the

also

other

carried

gather

out

information

interviews, the

to

CCUs

finan-

were

also

gathered.

Before to study

the

ten

and

directors view

began.

conducted

undertaking

the

selected

CCUs

to

solicit

of

each

CCU

The

formal

during

the

their was

formal to

inform

them

cooperation. first

interview

period

interviews,

the

Approval

obtained with

i October

of

letters

before the

-

15

were

nature by

the

the formal

samplerespondents November

1987.

sent

of board

the of

interwas

13

A total come

from

allocated tively (50)

CCU

lized

82

CCU

members

the

institution-based

to

the

more

allocated the

of

four

homogeneous memberst

come

(6)

market-based

in

the

selection

interviewed.

CCUs.

The

institution-based

from

the

to CCUs. of

the

the

of

its

market-based size

in

Simple respondents.

Thirty-two

(32)

was

equally

sample

CCUs

characteristics

proportionately

six

were

due

to

membership. CCUs.

terms random

the

of

Fifty

They membeTship

sampling

rela-

was

were of uti-

14 The _ following their

addresses,

is and

the the

list

of

number

CCUs

of

included

in

the

member-respondents

study,

for

each

CCU:

Name

of

CCU

Address

No.

-'.

CCU

member-respondent

Baclaran Vendors Develop. ment Cooperative, Inc. (BVDCI)

BVDCI Bldg. Taft Avenue, Baclaran, Paranaque, M.M.

Paco-Soriano-Pandacan Development Cooperative, Inc. (PSPDCI)

1155 Paco,

J. L. Escoda Manila

Central Market Cooperative,

1215 Sta.

P. Guevarra Cruz, Manila

Development Inc. (CMDCI)

of

I0

St.

I0

St.

8

Divisoria Traders Development Cooperative, Inc. (DTDCI)

Rm.2, 2nd Floor, New Sampaguita Building, C.M. Recto Avenue, Divisoria, Manila

5

Malabon Central Market Credit Cooperative, • Inc. ( MCMCCI )

Malabon,

8

Marikina Vendors Development Cooperative; Inc. (MVDCI)

Sta. Metro

Elena, Manila

Marikina

9

U.P.

Credit Cooperative, Inc. (UPCCI)

U.P. Q.C.

Campus,

Diliman

8

FEU

Credit Cooperative, Inc. (FEUCCI)

FEU

Compound,

DSE

(CBP) Kilusang Bayan for Credit, Inc. (DSE (CBP) KBCl)

EDPC Building, Central Bank of the Phils. A. Mabini St. Manila

8

PLDT

Employees Cooperative_ (PECCI)

4th Floory Universal-Re Bldg., Paseo de Roxas Cr. Perea St., Makat£,

8

Credit inc.

Metro

Manila

Manila•

8

MM 82

15 / ]rl.

DESCRIPTION HISTORY

OF A COOPERATIVE

OF THE

This

chapter

a

generaÂą

glves

TEN

is

union

(CCU),

history

of

ten

A.

GENERAL

The

sample

of

credit

of

the

the

OF

THE

union

(CCU)

BRIEF

sections.

operations

second

The of

a

briefly

first

cooperative describes

the

CCUs.

OPERATIONS

Cooperatives

AND

UNIONS

two

urban-based

DESCRIPTION

Bureau

cooperative

into

while

UNION

COOPERATIVE

divided

uescription

credit

the

SAMPLE

•CREDIT

OF

A CCU

Development

(BCOD)

defines

a

as:

"... a voluntary association of at least 25 personsl having a Common bond of interest (common bond is that pre-existing condition which causes the members of a group to associate together, to know each other, to have common interests and purposes, and to enable to work together to accomplish group objectives), organized primarily for the purpose of mutual assistance in generating capital from among themselves through a systematic and continuous savings program in order to grant loans to each other at reasonable rates of interests, and duly registered with the Bureau of Cooperatives Development pursuan t to Presidential Decree No. 175."!/

The I.

2.

general To

objectives

increase

through

an

skills_

manpower_

To

To

Bayan

and

savings

MAF-BCOD (i@86)_ their Similarities

are

social

as

and

purchasing

effective

fol!ows: power

of

utilization

members of

their

facilities;

capital

the

CCU

and

institutionali,ze

improving

a

income

efficient

stimulate

continuous 3.

the

of

formation

for

through

developmental cooperation

and

economic

"The Five Regular and Differences."

systematic

activities; as

a

status

Types

and

technique of

and

for

members.

of

Kilusang

16 Organizing

a

CCU

Usually_ of

dedicated

and

effort

the

organization

individuals to the

and

Association)

Credit

case

of

core

nature

a

cooperatives. of

organization CCUs,

FederatioB, to

already their

established

the

institution-based

to

assist

cooperative Institutions

The

expertise

to the

organization

principle, not

of

CCUs

BCOD of

their

help

the

of

the

new in

a

market-

employees

training members

willing

to

to

of

share

CCUs'.

technical As

cCu

the

Service

are

CCU.

the

in

For

and

NAMVESCO

of

need

them

seminars

are

the

and

Cooperative

provides

membership

require

may

newly-organized

the

in

practices

members.

who

the

group

members

free

trainors

like

and

Vendors

provides

Savings

understanding

training

Market

CCUs,

the

do

in

organization.

core

to

group money,

(Rotating

the

founding

and

CCU

principles

market-based

and

in

CCU

CCUs.

experience

ally

core

time

association

a thorough the

a

spend

stable

entities/individuals new

from

a paluwagan

of

have

(NAMVESCO)

newly-installed

to

informal

First

National

Inc.

a as

prospective

the

the

starts

willing

an

including

some

of

as

must

The

assistance

begins

CCUs.

,CCU

are

a CCU

develop

or

members

of

based

and group

market-based

prospective

who

mold

Sometimes,

of

For

personnel

part

is

of

the

voluntary.

become

members

of

a CCU.

The

first

perseverance stable themselves initial

CCU

five

and

years

patience

organization. without

stages.

of

of

operation

the

officers

and

The I officers

remuneration Usually,

usually

the

for

and

their

officers

and

test

staff

to

staff

services staff

the

achieve

a

may

find

during

the

work

part-time

17

in

the

CCU

employed.

The

since

Only

Staff, General

the

to

the

and

Committees.

of

with

management

of of

by

General

the

manager,

its

P,D. in

CCU.

they

are

of

the

CCU.

affairs.

with

Management

23,

it has

administration

and

management

of Directors,

formulating

is one

set

board

the

to day

by the

Board.

and

of

the

board

their

created

headed the

the

adminis-

bodies

of

is

for

the

Staff,

The

the

as a body,

and

affairs

fixes

standing.

policies CCU

Management

day

Staff

The

L,O.I.

and

The

the

Committees. good

of

The

Management

in

operation

Assembly.

consists

of Directors,

members

Board of

CCU

Appointive

175

the

The

function

the policies

of the

of

business

is entrusted

implements members

the

the

of all

authority the

the

tration

or

to the

of a Board

and

consists

final

entrusted

businesses

is devoted

Assembly,

provisions

affairs

time

own

structure

General

Assembly

supreme the

free

their

Structure

Elective

Subject

have

organizational

following:

of

their

Organizational

The

they

by CCU.

a

appoints

It

compensation

the and

tenure.

The

Elective

Committee,

Supervisory

Committee,

and

processes,

evaluates,

withdrawals the

committee,

by

the

Boarm

the

Committees

are

Committee Election

of deposits in which

and

of Directors.

or

the

Committee. acts

except case

the

upon

when

the The

the

following: Audit The

loan

Credit

Supervisory

Inventory Committee

applications

applicant

application

and

Credit

shall

is a member

and

be acted

Committee

of upon

performs

18

four

main

functions,

effective

accounting

inventory

of

financial

consultant to

the

Election

Committee

observe

and

Board

day

operations

the of of

are

The

CCU

of and

This

committee

CCU.

Aside

may

create

smooth

.operation

Savings

be

CCU

may

deposits, noted

deposits types

is

serve

as

regular

Finally,

all

Committees,

most

Closel_

the

Education

the

elections.

One

the

Credit

involved

in

of

this

and

committee

is

methods

the

and

philosophy

of

the

Cooperative

by

the

Vice-president

headed

Education

Committee, as

CCU.

a

typical

enhance

it

may

their

the deem

organizational

Training to

promote

among

public

the

1 shows

to

members

understanding

Board

movement. of of

necessary

structure

the

Directors for

of

the

a CCU.

Facilit.ies

The fixed

Elective

audit.,

prepare

Assembly. of

and

CCU.

committees of

3.)

to

principles-and

usually

the

other

Diagram

the

4)

adequate

internal

CCU;

and

officers

cooperative

and

the

conduct

primary.function

is from

the

an.

conduct

General

committee

the' objectives

to

BOard;

the

thegeneral

install

of

the

the of

appointive

knowledge the

and

among

members

Committee.

the

supervises

Committee

An

2)

properties of

that

today

1).to

system;

assets

reports

can

namely:

of

though mentioned deposits.

offer

three

savings that

types

of

deposits, not

above,

all

savings

and CCUs

some

time

offer ccus

offer

facilities, deposits. the

three

only.

the

namely: It

Should

t_pes first

of two

DIAGRAM I

19

THE ORGANIZATIONAL STRUCTURE: OF ATYPICAL CCU

General Assembly' I

Board of Directors I. Chairman 2. Vice-Chairman 3, Secretary _ 4. Treasurer >_ 5. Manager _< 6. Members

I

Committees

.... .............

Committees

Manager i

Bookkeeper I

Accountant/

l_ Employees ,,_

Note • ....

Staff Authorities (function isadvisory in nature) Line Authorities (directly engagedin the planningand operation of the CCU ) Need not be members of the Board

2O The is

fixed

a primary

holders

degosit

feature

of

which

in

fixed

all

deposit

holders)

and

those

power

(e.g.,

the

preferred

case,

members

agree

fulfills

pledged his

the

memb_er

fixed

col'ling

on

fixed

at

realized

by

withdrawn As

is

determinant CCU.

include

earn

the

the

usually

the

voting

is

usually

It

is

only

becomes

when

a

voluntarily Some

the

full-

increase CCUs

set

a

fixed

amount

maximum the

the

is

of

becomes

rate

is

theprofits

subject

membership.

fixed

separated

may

a member fixed

to It

deposit

a member

existing

on

not

finally

amount

interest

depending

deposit

period

the

is

may

can

be

from

the

the

borrow

with-

primary

from

borrow

his is

deposit.

Some

may

withdrawn

a

CCUs

deposits.

fixed

deposits, to

the

deposit

offered

by

some

with

year

fiscal

member

oT

savings

the

maximum

subject

features

he

amount.

However,

practised,,

the

multiple

savings

minimum

may

common

without As

that

between

the

deposit.

member

members

distinguish

fixeddeposit

interest.

The

members

Yhe

of

power(e.g.,

deposit

Any

depositor's

when

of

unlike

of

CCU.

Usually,

certain

CCUs

fixed

fixed

this

Some

capital

holders).

a minimum

over

end

the

only

of

share

CCU.

share

deposits.

the

during

CCU.

the

deposits

determined

on

as

v0ting

holders

_inimum

deposit

Fixed

drawal

of

CCUs. with

share

one

serves

and those

time

rules CCUs

savings and

offered

regulation

usually

deposits by

deposits

has

offered ordinary

of

the

a maturity by

the

banks.

CCU

be

CCU. of

The one

,have

by time _ear.

similar

21

What

is

transacted not

go

bers

with

to

employ

his

right

at

Credit

by

done

of

through

time

in

these

deposits

deposits,

For

m&rket-based

and

fixed For

monthly

or

need

CCUs,

they

of

mem-

institution,

based

hi-monthly

lowers

making

are

a member

deposits

work.

significantly

depositors

the

deposits

payroll

transactions

as

opposed

to

a bank.

processing

borrower form

of

completes

amount,

the

in

of

some

views. Committee amount

tion

the

manager is

loan.

of

can

Diagram

CCUs for

give

productive rate

on

2

to shows

loans or loans

manager

and

only

terms

of

the

loan

for

the

co-ma.kers

application or

inter-

the

Credit

determines loan.

the

the

After

the

is

sent

application

Then

the

loan

applica-

disbursement

of

the

process.

to

their

consumption and

the

and

documentation.

this

loan,

the

filled-out,

the

treasurer

the of

member-

application

investigation

application

Committee,

the

of

reviews

properly

the

the

The

signatures

preliminary

loan

further

forwarded

the

the

Credit

for

and

are

First,

form.

purpose(s)

forms

borrow

follows:

the

The

conducts

evaluates

evaluation

for

loan.

the

a member

the

the

as

application

period,

cases,

After

is

loan

asks

maturity

guarantors

loans

the

specifically

rest

place

way

Facilities

The

and,

for

savings

practice

incurred in

collect

be

the

a deposit.

latter's

can

is

Except

make

to

This

depositing

here

CCU.

to

the

deposits

costs

be

the

CCU

deduction.

to

interest

collectors

CCUs,

or

of

other

members. purposes.

charges

are

The

loan

can

Usually, disdounted

either

the in

inte-

advance

22

DIAGRAM 2 THE PROCESSING OF LOAN

Member- Borrower

Appllcatton

Manager

Preliminary Loan Evaluahon

k

Wr

•oo_ Disbursement

_t

Treasurer

_

F

Approval JCredit Committee And _,no,_oon Evaluation

23

from

the

loan

loan

higher

than

As

the

in

amount, the

For

repayments,

while

payroll

In

the

committed

in

documented of

such

interest

loan

CCUs,

institution-based

repayment

collectors

CCUs'

loan

of market-based

the some

CCUs,

collectors. cases.

this

In

study.

checking

assets).

Some

Diversion fact,

deposits

the

CCUs, and

of

manager

part

the

during

borrowing

of

loans

CCUs

demand

is made

may

collected

or minimize

of

the

be

funds

had

the

been

occurrence

be thorough

transaction

and

extra

CCU.

collat_ral

collateral

of

credit

is usually

Christmas usually

lowering

no

This

amount

fixed

the

heavy

loans

in credit

of

a CCU.

one

can

borrow

is

are

guarantee

_be

discerned

institution-based

opening

of

rationing often

classes

CCUs,

in market demand

Credit

loans

a

as collateral.

market-based

an increase

exceeding

on

also

For the

physical

co'makers'

can

during For

whenever

on

deposits

transactions.

seasonality

resources

the

and

CCU members

season.

occurs

only

(i.e.,

servesassecurity

the unencumbered

various

on the

have

commonly

patterns

anticipated.

of

loan

malpractices

must

the member-borrower

borrowing

pressure

CCU

What

Borrowing through

collect

repayment

of

some

To prevent

the daily

amount.

assigning

very

,)

Generally_

the

the

is also

malpractices

'.

certain

rates_on

rates.

facilities,

malpractices,

careful,ln

lending

market-based

case

by

effective

deduction.

by

occurred

the

quoted

savings

convenient.

through

making

heavy

demand

creates

is

huge

in the

form

resorted

to

24 whenever

credit

CCUs

not

do

Central

demand have

Bank

exceeds

access

nor

to

to

the

the

the

formal

supply

of

loanable

rediscounting banking

funds.

window

system

of

for

the

additional

liquidity.

Other

Services

Aside

from

other

services

Fund

or

Free

Medical

Rice CCU. and

the

Death and

The

its

Plan the

is

the

in

all

exists

only

in

The provided is ment vism

looked and

free

as

members them.

his

CCU

studied,

members.

belongs. the

a way of

the

of

provision

strengthening

CCU

to

enhance

present of

In

a

funds

the

and

in

case

above

of what

in

times

Retirement member The

of

Benefit

retires

Damayan

from

fund

Retirement•Benefit

is Plan

CCUs.

services

The

are

and

employees.

the the

••Plan,

Programs,

assistance

when

while

dental

these

regular

institution-based

and

Loan

are•over

while

offers Damayan

availability

financial

assistance

also

Benefit

services.

their

a member,

which

some

to

upon

between

of

CCUs

medical

such

to

all

of

CCU's

giving

financial

common

all

these•services

in

Retirement

a particular for

CCU

namely:

Appliance not

•provides

the

members,

Benefiti

members

Fund

institution

its

CCUs,

family

provides

services,

Services,

upon

Damayan

in

of

However,

of

institution

death •

benefit

Dental

depends

demand

lending

Assistance

institution-based the

and

Programs.

It the

for

the

Loan

savings

offered of the the

by

the

CCU

these

free

ties

between

spirit

of

are

services manage-

cooperati-

25 In the sold not

B.

the

CCU

case

of

purchases

on all

goods

credit CCUs

BRIEF

to

provide

this

OF

Baclaran

THE

materials, nized by

due

to

Pasay by

a

land

its

of

Bay

area

of

ÂŁs

Ibayo,

to

schemes.

Cooperative,

famous

for of

to

its

be

However,

and

It

is

Manila.

by

(West)

In_.

and

Manila

clothing

highly

It

Makati by

(BVDCI_

embroidered

Manila.

Metro

North)

3,832

urba-

is

bounded

Taguig

(North-

(South).

It

has

hectares.

divided La

program,

CCUs

proximity

Manila

Loan

manufacturers

repayment

south

the

Rice

service.

SAMPLE

town

(on

Paranaque Dongalo,

kind

located

City

east), total

easy

and

andor

Development

a

is

Program

suppliers

on

Vendors

Para_aque,

Loan

frc)m

members

HISTORY

1,

Appliance

into

Huerta,

seven

_istricts:

Poblacion,

S_n

Baclaran, Dionisio,

and

Tambo.

The in

public

Para_aque.

rent and

parts

Tb_S of

the

services.

their

way

Marikina from

m_rket

of

place

is

country

Products into

and

Baclaren

this

the

center

of

by

people

from

diffe-

its

goods

cities

find

frequented for

of

the

low

different

place

ready-made

is

like

dresses

prices

of

townsand

shoes and

and

other

commerce

slippers

from

wearing

apparel

market

vendors

Taytay.

The

BVDCI

named

Mariano

other

market

began Nucum

as

Market

vendors

an

organization

Vendors

association,

of

Association. the

objective

As

in was

any to

26 advance

the

October

1976,

problem.

The

department holders

in

strong

plan

of

Luis

area.

against

this

officers

James

was

form

the

association

with

formed

in

and

in

Inc.

because

previous

i0 incorporators 1977

and

with

of

LoSing

no

Assembly-

the

group

Central

objective

least

vendors'

that

stronger

organization.

members,

an initial

the

believed

is at

250

stall-

a

The

they

the

BVDCI

was

capitalization

of

P34_000.

_

Despite in

the

opposing

expulsion This

was

rative. other not

effort

the

of the indeed

under

to

one

of

a big

the

officers

of

Cooperative the manager,

was

set-back

their

to

the

found

it hard

Mrs.

officers

the

unfortunately

carried

out.

newly

the

organized

Cooperative

Because of to

previous

instill

Avante,

Coopeto

the members

the

consciousness Leonora

members

owners,

of

case

and

Market

the

goods.

as in

in the

the

Nucum

the members

sell roof

by

the

stallholders

tion,

often,

exerted

plan

It prompted areas

the

a

lacking

referred

(CMDCI).

big

association

then

Lorenzo

cooperative

their

January

turn

Johnny

cooperative

or credit

than

Hence,

Assemblyman

the

of the

a

the

owners.

help

In

to build

themselves

the

the

with

of

of

found

Cooperative,

a credit

politically

officers

but

members.

the market

expulsion

to oppose

Roberson

Development

to

plan

as

confronted

of

the

solicited

N.

Market

owners

The

The

was

cause

lobby

Taruc.

to Mr.

the

would

the

the

of v@ndors

association

political

time_

intezest

the

store

protested

man

business

of

the the

had

to

seek were

associaprinciples

members. campaign

Very on

27 a

stall-to-stall

basis-for

years

since

bean.

very;slow

this

its

who-

From

1977

to

based

on

fixed

deposits

a

part-time

It

was

when

they

What

the

had

source

of

and

income

manager

to

times

keep

the

never

of

..

was

space the

in

only

rative that

-the

was

able

members

In building

and

.of

of

the

1980

Baclaran

center.

Because

in

to

that _hus

of

.Cooperative

more

began

from

remuneration° : at this time total

that

collapse.,

the

Bureau

government

during

those

Cooperative

transferred

accessibility attract

clerks/assistants

officers

other

was

of

insti-

times°

,k

the

from

deposit

low :j

fact

them

Baclaran

to

by

and

....only

operationg._.:.such_,.as

No savings

the

•

It

from

the

_em_ne_.a.tion°

for_._e_diing;_was

Cooperative

hel_

re.s_ence

without

the

(BCOD)

had

of,

receiving

was

Cooperative

t,he

f_nds

for

.._.thr.ee

._ Dnrin.g

assisted

were

Development were

the

Fer

even_stagnanto

job,

etc.

was

managerlamented

Cooperatives tutions

the

fees_

basiswho .• trying

really

of

extent,

in

service The

growth

transacted_in

1980,..the

yet°

on

some

•persevered

income,

offered

to

the

business:was

manager,

interest

i.ncep.tion_ and,

period,,

memb_r-s""_.supporb...

• their

Mrs. .the.

• rented

members.

accepting,

to

residence.

office., . .It.

savings

small

operation

Avante.'s small

a

the was

_Coopein

_1982

deposits

•from

..

1986, in

the

Cooperative

Baclaran

resources

of'

the

f£nancia,1.,

contribution

near members on

was

able

to

purchase

the

LRT terminal

from

and.

from

those

the.._ond,it£on

member_ th_,t.,_

a

lot

the who, _hey

and

pooled gave .-would

28 occupy own

the

first

business

building from is

with

a

by

in

working

against'

keeping

Aside

medical

of

the

a

cost

earns

of

for the

reminder

their

lot

monthly

together

saving rice

and

income

of

the

building

of

their

despite

services_

loans,

and

services

and

death

persethe

odds

Cooperative

benefits, The

enhance members

delinquency

moral

the

treatment. can

officers

solving

recent

enhanced

and

loans,

between

effectiveness

The it

Cooperative

these

in

building

acquisition as

c_nsultation

camaraderie

The

officerS

lending

that

help

The

the

appliance

believes

fee.

the

them.

from

provides

the

of

since

member-occupants.

verance

way,

floors

self-liquidating

considered

free

second

operations

is

the

and

the and

problems

and manager

unity

and

could,,

because

in of

a the

suasion.

computerization services

that

of the

the

Cooperative

Cooperative

further

gives

to

its

members. !

The

Damayan

family

of

taken

either

members,

the

or

_60.00

from

receives

_5_000

'_ place one

The in roof.

Fund

deceased from from

is

member.

the the

the

a program The

annual

from

this

management

of

Baclaran

where

fund

for

patronage

voluntarily

members.

designed

to this

help •purpose

refund

annual

of

contribution

The•deceased

the

member's

is the of

family

fund.

the

BVDCI

they

can

plans house

to

purchase

their

a

members

'market under

2o

Paco-Soriano-Pandacan_ (PSPDCI)

The

present

rative, with now

Inc.

began

its

executive

Cooperatives then

named

the

vendors

Zamora

St.

The

joined

paco

at

are

and

Soriano

Like

other

areas

princlpal Street,

and

Elpidio

Street,

Taft

office Paco,

Mr.

James

the National inc.

only_n

the

corner

a public two

1977

Roberson,

Market

Vendors

(NAMVESCO).

it was

pa_dacan

Quirino

the

of

Community

that

and

1980

market,

adjacent is just

Highway

and

Soriano

markets ' while a 5_

credit

vendors

the market

within

President

Kalaw

was

market-based

in

in Malate

in September

and

market,

the

a

panda_an

to lO-minute

ride

cooperatives,

the

from

markets.

designated

barangays

help of

Coope-

Cooperative.

St.

a market

interest

Development

Cred_t_COoperative

at

the

Zamora

as

It

Inc.

operations

Federation,

market_

market

The

of

located

nlarket,

their

officer

Paco-Soriano

private

started

the

Inc..

Market

formal

and

Service

Development,

by

Paco-Soriano-Pandacan

15 inc_rp0rators the

paco

Development_Cooperative,

Metro

area the

of

Paco

Ermita, Quirino Avenue, is located Manila.

association

wanting

to

PSPDCI advance

place.

operation and

are

Pandacan

specifically Avenue, and at

nelghbouring

districts _hose

Roxas

United 1155

the

and

areas

bounded

Boulevard,

Nations Josefa

Avenue. Llanes

some

T.

M. Its

Escoda

Membership also

does

empioy'ees

provided set

and

that

by

the

they

to

pass

the

best

various

any

only

include

member

of

the

to

diversity have

sectors.

of

a board

Thus,

the

Panda_an

and

community

market

sectors.of

its

of

loan

tionship

between

faced

as

it

was

representinK of

market,

the

board

Soriano

- representing

are

market, four

growth

the

paco

for

_.

the

1979-1980

significant

time

and

of

1978_

deposits and

officers

(4)

Cooperative

the

of

to

the for

a problem impose

'CooperatiVe

members.

The

favoFable

the

a

rela-

Cooperative

led

Cooperative.

among

Soriano

was

decided

wastheperiod

problems and

In

goodwill,

members

there

officials

_500,

and

and

operation_

the

of

trust

year

struggle of

of

steady

between

well,

membership.,

members

paco

of

Hence,

deposits

up

The

year

ceiling

savings

the

the

first

funds.

building

to

as

theCooperatlve.

During

opened

but

membership

directors

fifteen

from

uniform

vendors

community for

the of

elected

lack

the

requirements

representatives

of

market

Cooperative.

Owing thought

not

when

its

market

the

officers. groups

leadership

CoOperative Factionalism

intensified.

culminated

in

a

The threat

• .

mass

resignation

officers

feared

lead

the

Credit PSPDCI

to

that

the

establishment

Cooperative and

from

affect

which all

the

the

Soriano

division of could more

an

of

market the

two

exclusive

eventually the

operation

group.

The

groups Soriano

compete of

might Market

with the

the

present

31 Cooperative.

Arrangements

planned. of

The

reconciliation

factionalism

in

this

the

Group,

and,also

because

of

larger

membership.

problem

The

for

of

a period

relatives

of

hit

the

collector

the

some

two

in their

officers

of

deposits.

This

September the

1985.

JPandacan

PSPDCI.

a Pandacan

What

incident

Market

members

and

1984

the

Soriano

led

for

when

about

Fortunately,

is noteworthy,

cooperative

divert

which

to

in

commi%ted

resulted

trust

of

in

incident

members'

8treet_

Cooperative

to pay

basis.

establishment

to

It was

done

Paco

promised

on a staggered

withdrawal

This

the

anomalies

years.

collector

was

of the

able

problem

Cooperative

Zamora

Cooperative

was

almost

bi_

the

the

This

between

the

unearthed

collector.

at

then

background. of

Cooperative. tension

were but

in the

vendors,

the

committee

successful

officers

of diffusing

audit

was hanging

market

of the

Another

reconciliation

the

Pandacan

members

hope

still

atmospherethat

invited become

was

for

the

may

by

a

_137,000 one

of the

amount

in the

to a

the

lost loss

of

significant

have

led

to the

Credit

Cooperative

in

though,

is

of

are

also

that

members

most of

the

32 • As

of

the

present_

the

composition

of

membership

follows:

No.

E_nployees Paco

are

and

Community

based

members

vendors

Soriano

vendors

Pandacan

vendors

%

-

24

2%

-

720

60%

-

240

20%

-

216

18%

i_200

Note•

that

the

percent

of

rative

discourages

community-based

thetotal

difficulty

in

Aside

membership.

loan

from

100%

comprise

is

only

because

this

the

sector

2

Coope-

due

to

the

collection.

lending

Cooperative

also

free

consultation.

extend

This

membership

from

medical

members

as

offers

educational

and

saving

facilities_

appliance-on-credit In

the

scholarships

near

to

the

services future_

it

deserving

and

hopes

to

children

_f

members.

3.

Central

Market

The

Development

Central

(CMDCI)

is

ratives

organized

cials tive

of is

the the

organized office their

one

in at

own

Cooperative,

Market of

the in

cooperative first the

1215 office

P.

DeveloPment

pioneering the

Cooperativei

philippines. claimed

country. Guevarra

(CMDCI)

market-based

market-based

building

Inc.

their

credit At

and

total

fact,

the

Sta.

credit

ever

Manila. of

offi-

coopera-

Cooperative

Cruz,

resources

coopesome

cooperative

present_

Street_

credit

In

that

Inc.

about

to

be

holds With _13.5

33

million_ role

the

in

the

officers

and

development

of

particularly

The when

in

history

a

handful

Vendors

out

of

membership

of of

alternative 15

Central

Market

rative

the

the

of

Unfortunately, its

first

with

a

was

the

ket. tive

(CAO)

Cooperative.

was

revitalized It

only and

was

only

was

in

was

1973

then,

to

1968 Market

a

provide

credit

at

known

the

a

better

that

time.

who

were

members

June

then

with 12,

stall

as

the

i968,

the

Coopewith

that to

too,

in

the left

to

1972.

arranged a

an

by

embark

confronted The

issue

Central the

some

Mar-

Coopera-

Instead,

a

members

of

retrogression.

the

credit

function that

to

were

issue

1968

indeed

about

attention, fees

this

was

was

vendors

immediate

from

able

on

to

strengthen

registered

market

operation

in

Manila.

Central

popular

the

with

This

and

Cooperative

increase

of

back

to

the

inactive

type

their

_3,050.

needed

preoccupation

virtually

It

tive.

that

planned

The

paluwagan the

Office

of

forming

Cooperative, was

when

of

founding

Union,

operation,

problem

the

of

traced

sharks

50

showing

district

United

association

UCMVA,

capitalization

be

the

loan

in

area.

thought

and

Credit

Cruz

can

of

pride

association

market

Administration

initial

CMDCI

vendors'

incorporators members

Market

officers

of

to

mostly

on

the

take Sta.

(UCMVA)

the

bond

the

Central

Association

union

With

the

staff

the

as

cooperative a

credit

cooperative

was

cooperawas

able

,34 to

lend

who

to

its

readily

members.

Withdedicated

rendered

without

any

their

officers

services

•remuneration,

to

the

and

the

staff

Cooperative

Cooperative•

steadily

progressed.

On with

19

the

Central

March

Bureau

Market

name

to

comply

]975, of

with

National

Cooperative

Cooperatives

Credit

Central

the

Development

Cooperative

•, Inc.

Market•Development

the

agreement

Market

re-registered (BCOD)

It

then

as

the

changed

its

Cooperative,

among

Vendors

was.

the

Inc.

affiliates

Cooperative

of

Service

to the

Federation

(NAMVESCO).

From only the

1968

within

to

the

designated

1975_

the

Central area

designated

Market

of

area

area.

operation

of

But

was

operation

starting

expanded

to

in

was 1976,

include

the

[

area.

bounded

Oroquieta This

Quezon

Street,

was

expand

by

Bambang

intended

membership

However, Cooperative the

Central

percent

come

from

The those

engaged

operation,,.

in

the

the

and scope

bigger

Recto

Avenue,

Andalucia of

area

ineffective

Market

Boulevard,

Cooperative

be

the

M.

Street.

operation

and

to

cooperative.

of

to

C.

Street,

widen

the

despite seems

Quezon

to

of

outside

along

Boulevard

area.

Central and

accepts business

in Out

Market,

S percent

of

operation,

attracting of

800

i percent • from

other

the vendors

members, from

96

_ those

areas.

membership•application

only

for

within

area

of

the

designated

35

At funds. future

present,

the

It

to

hopes

by

offering

maturities.

4.

Loan

Divisoria

L

._

The Manila

by

Traders

and

Mindanao

through

Bay

Divisoria

known

to

as have

the

only

and

its

suburbs.

When

namely:

Rada,

Luzon

wholesale since

•after

World

War

If.

the

well

EsterG

are

in

as

are

being

its

include and

in

days.

public

privately

de

market

Metro

retailing. supplied

the

Visayas

port

of

capacity the three

1925_

and Manila

that

to

Unlike were

wa_

it

is

time,

servicing

additional

and

it but

it

Manila

absorb

Divisoria

Bilbao. owned

Binondo,

At

market

transactions, to

it.

(DTDC_

well

the

,

its

into

markets

as

longer

expand

_c.

as

near

with

capital

the

and

Spanish

reached

Assuncion,

markets

as

the

located.

a major

three

of

excess

in

to

more

Harbor

near

these

loan

commodities

located

expanded

of intends

one

closely

business

out

wholesaling

government-owned

in was

is

with

funds

Cooperative,

North

is

Divisoria

increase complex

the

existed

was

also

other of

itself

types

channeling

in

provinces

established

diverse

market

engaged

Originaily

Such

Developmen_

vegetables,

where

lend

by

Divisoria

different

finds

Cooperative

Program

actively

Fruits,

fully more

The

Appliance

Cooperative

the market

markets. Divisoria, established

3B Along Textile

Market

dilapidated rally

occupants

are

Dentists, a

that

the

room

It

since

it

began

The

been

guita." forge

to

their of

rental members, opposed.

the In

legal

fees.

of

general

mer-

second

also

this

through

on

floor

such

shop in

the

early

as occu-

5uilding

the

years.

second

floor

existence

building sa of

the

hand

in

in

occupants,

Pamilihan

Sampawas ' to

occupants

advancing

an

known

ng

association

building

of

council much

planned

After

association

that

was

proposed the

for

their

to

to

the

increase

increase to

of

the

indivi-

the and in

pass,

rents the

in

the

rents

an

1974 by

increase

sought

proposed active

when

such

association

oppose

dedication

came

tested

consequence

operations,

With

the

the

view

business a

gene-

interests.

building

percent.

is

grown

room

traces

in

of

i00

a

Sampaguita

of

owner

beauty It

has

objective

unity

the

A

Mangungupahan

workinghand

business

The

are

professionals

Sampaguita

mga

among

of

The

of

primary

unity

purpose

its

ng

The

floor

but

operation.

composed

"Samahan

concrete

bars.

floor. and

Sampaguita

groceries,

Lawyers.

occupying

DTDCIhas

association the

snack

formed

the

theground

fast-food

second

lies

two-storey

practicing

the

its

a

some

and

was

has

is

stalls,

mostly

in

Avenue

Occupying

small

DTDCI

DTDCi

help

building.

Physicians_

pies

dual

Rector

textile/garment and

as

M.

building.

chandise,

The

C.

the

increase support

was

by

in the

successfully

association

became

37 dormant

for

ther.

Aware

put

to

of

forming

of of

waste

bers.

if a

the

was

Aproniano

was

With

about

began

formal

The

40

first

and

with

able

to

in

of

membership

was

Even

if

skepticism,

their

offi_cers

membership.

bership

is

(mostly

as

engaged 3 percent_

employees, total

designated

etc.

At

stallholders, area

of

for

80

with

with

the

by

Mr.

Lorenzo

of

Atty. with

Santos. BCOD

and

campaign, and

in

and

percent¢

membership

is

vendors, of

the

did

not Their

area.

received

their

quest

percent,

of

with for

its

about

ambulant,

mem-

venbank

4 percent

professionals

Cooperative.

a

stallholders

professionals,

only

and

the

was

fixed

a

of

Divisoria

composition

15

operation

the

percent,

2

they

the on

stallholders.

membership

the

of

membership

occupants

Textile),

Grocery_ Total

mem-

officers

for

within

present,

RTW/

of

the

persevered

follows: in

one

JOhnny

idea

saw

their

everybody

campaign

the

thought

headed

registered

operation

starting

to

no

Mr.

the

professionals

open

Jr.

be

a cooperative.

of

DTDCI

would

1979.

In

between

help

toge-.

association's

time_

campaigning

building.

that

association

concretize

basis

discriminate

the

group

Santos,•

the

forming

the

the

year

that

that

vigorously

Sampaguita

dors,

1978

members)

stall-to-stall

larger

in

of

the

group

Jose

composed

in

bind

the

Atty.

them

operation

Cooperative

of

during

guide

Cruz,

to

potentials

cooperative

only

CMDCI,

issues

disbanded,

could

It

the

concrete

Unfortunately)

expertise

the

lack

in

of the

38

tive

In

order

in

the

can

rests.

were

made

given

meeting

done

Although is

tive the

in

haps than

getting

due the

are credits

members

to

Currently, performance to space

5.

City the

pool

of enough

that

the

of

Navotas

with

inte-

the

attractive

general

area,

it

quite

areas

far

it

located.

is

credit

assem-

in

the

to

be

call

and

by

of

on the

of

is

perother

Chinese are

busi-

extending

area.

satisfied

with

immediate

plan Or

the _s

office

own.

Inc.

is

located

the

west

city

effec-

credit

Cooperative,

Malabon

Coope-

the vicinity

a building its

the

This

others

purchase

bounded

from

Their

Credit

Of

not

wealthy

and

seem

can

is

sources

particular,

to

Market

is

and

pre-membership

of

Cooperative.

It

business

operation

other

officers

Cooperative

municipality

of

stallholders

resources

The

town

cash

their

Central

Manila.

of In

Malabon

of

from

presence

the

published

their

during

area

where

small

and

cooperativism

raffles

members

Coopera-

of

operation,

and

Divisoria

offering

of

the

year.

a

Cooperative.

nessmen trade

to

designated

the

further

years

frequent

Building

to

principles to

early

whole

Sampaguita

the

once

about

officersputupposters

away

the

the

information

harnessed

its

were

rative

be

During

seminars_

bly

the

highlighting

this

prizes

disseminate

area,

newsletters how

to

of

north and

(MCMCCI)

of

southwest

Caloocan

on

the by the

89 southeast.

The

town

of

Valenzuela

limits

its

northern

and

.

northeastern

side.

Malabon a

total

is a coastal

land

annual

area

income

the

Metro

for

its

its

fish

trading

while,the

real

activity

with

twenty-two

Malabon

estimated

for

1983

among

the

of

revenue.

only

eight

with

was towns

Klthough

rest

storage

and

and

in

the

are

in

the

service

communication

[

wholesal@

and

canning

sector

(6_),

Of the

and

total

retail

followed

(8_)

fishing

in manufacturing,

(58_),

percent

has

are

business.

the

percent

engaged

percent

finan-

economic

trade

by

(6_),

account

manufacturing

(22_).

three

(3)

public

markets

and

(3)

three

markets.

The, (MCMCCI) purpose

actually

The

in Malahon,

fifty-eight

private

are

estate

for

activity,

majority

processing.

cing,

Malabon began

was

the

Central as

was With

officials

with

the help

Market

Credit

an association

to promote

association

Association.

Thus,

five

in terms

mouth

The

municipality

area

force

transportation,,

tion_

hectares.

it as number

Manila

labor

ÂŁndustry_

The

the

at a river

.

known

and

lo_ated

1,730.55

ranking

j,

of

area

of

of

_28,987,06i.00, within

"

the named the

thought of Mr.

of market

business Malabon

hope

of

of

Cooperative, vendors

interest Central

James

Market

Retailers

the

a Credit

Roberson_

whose

of its members.

strengthening

forming

Inc.

associa-

cooperative. the

MCMCCI

was

formed•

and

with

incorporators

15

The

formally

started and

cooperative

250

The

incorporators

employees

of

the

municipal

designated

area

of

operation

Come

of

from

Hulong

of

Malabon,

of

Malabon.

For

the

heavily

relied

officers

and

The in

it

Cooperative in

the

done About the

other

declared

The deposit staff the

colluded

with

some

of

is

the

their Central

of

the

municipal

the

whole

members

the

operation,

were The

and

employees

Market hall

Cooperative

extended

some

no

the

by

the

deposits

and

be

in

have

ample

of

the

diverting

funds

all

the

was

•accused.

recovered and

while

therefore

was

year,

withdrawals

members.

operations to

was

the

But

investigation

redeemed

massive of

in

of

funds

smoothly.

collectors

full

confession

during

resignation suspend

A

longer

resulted

some

officers

diverted

incurred

mass to

the

went•on

that

_980,000. in

of

could

anomaly

on

about

losses

decided run

of

half

and

most

of

Malabon.

cooperative

Cooperative

discovered

half

as

capital and

of

voluntary•services

of•the

resulted

one-

the

of

was

amount which

the

1977

staff.

operation

1985,

of

are

September

paid-in

government

year

on

in

stallholders

Concepcion,

few

first

a

However,

Duhat, a

with were

Malabon.

while

operation

members.

started

_25,000,

municipality

its

for

of

The three•days

time

to

savings

officers to

explain

and

arrest to

the

41

members

the

cantly to

whole'situation.

depleted

borrow

Service

the

from

funds

the

Federation,

The of

the

National

mass

resignation

Cooperative,

Market

signifi-

leading

Vendors

Inc. (NAMVESCO)

to

augment

and:hard

work,

the

officers

back

trust

them

Cooperatives their

working

capital.

,With were

patience

able

to

win

through

a spirited

anomaly

and

fully

of

:information

the hiring

evaluate

Early

the

1987

books

saw

theCooperative

their to

new

expand

zation

set its

ness

and

members medical

6.

its

other who

need

districts

the

East,

the

North

to the

renewed

loan

members;

immediately ceiling

the

towns

is

for

planning capitali-

loans

for

the

for

the

and

busi-

consumploans

loan

Pasigon

and

is _5,000.

of

Madre

town

for

Inc.

town

Sierra

West,

Cainta

the:

hospitalization

Cooperatlve_

by the the

for

andemergency

constitute

of

of members

loans

for emergency

I)evelopment

on

to

deposits

increasing

providential

cash

City

firm

in Savings

productive

of members;

bounded

the

program.

needs

districts

mainly

Cooperative.

trust

by

staff

clarify

Cooperative

perhaps

grants

are

of the

o@ing

The

Quezon and

accounts

to

accounting

increase

Vendors (MVDCI)

Fourteen These

of

The

'members

meant

a competent

officers.

expenses.

Marikina

drive

steady

appliance

of

their

the

Cooperative

needs

tion

of

of

of

operations,

on its

The

the

and

of

Marikina.

mountain_

on

San

on

the

Mateo South.

42 Marikina majority and

covers

of

which

commercial

of

ranks

land

with

the

while

of

of

the

size

,hectares, Industrial

a considerable

portion

the

MVDCI is

among

the

fourteen

Parang

Concepcion

ranks

ranks

town.

the

Philippines."

total

labor

first

second

'Marikina

with

with

is

are

35_115

21,124.

is well

Forty-four

force

located, districts

shoemaking_,

entire of

town's

33397

where

particularly

the

Capital

of

areas.

for

district

population

Manufacturing,

"Shoe

residential

ÂŁnhabitants.

inhabitantsy

industry

of

account

area

area.

in

24,950

land

also

Elena,

third

total

consist

areas

thetotal

Sta.

a

the

major

known

as

(44)

the

Percent

employed

in the

predominant

in

footwear

industry.

However, as

its

than

manufacturing

industry

industry

Elena,

it

profile that

being

is not indicates.

dominates

the

center

the

Sta.

It is commeroe economic

where

activity

consumers

buy

Elena rather

of

Sta.

their

basic

needs.

The public

Sta. market

basically

of

Public

Market

in the

entire

Marikina

three

lowing

sections:

goods,

(4)

currently

Elena

major (I) wet

fruits

inoperative

and

buildings section,

vegetables,

slaughterhouse.

is

the area.

subdivided (2) (5)

only

existing

It

consists

into

grocery, rlce,

and

the (3) (6)

foldry the

43 The very

physical

poor.

The

vicinities the

are

market

the

goers.

Also,

ducted 636

by

the

whose

looking

rainy

are

water

inside

systems

are

walls

unsafe

low_

is not

relatively

market

season.

classified

either

as

fixed

According

to a study

government

in

there

and

and

to

vendors.

stallowners

Vendors

started sole

as

out

purpose

to come

want

small

up

to air

group_

desire

1400

1986,

ambulant

of

vendors

with

assistance

in

place

their

tackle.

The

full-pledged

a unified

are

con-

vendors

about

in

of work

members.

the

early

bond

for

was

handle members

was

organized

among

any

Department

(DLGCD)

organization.

lent

From out

that

can

day-to-day

1975

of Local

that

of

the

provide problems

individually

valuable

vendors

grievances

formed

in May

Inc.

association

officials.

which

The

Development

Cooperative's

the

an organization

as wellas

Cooperative

Community

vendors

cooperative

have

Cooperative,

voice

government

credit to

market

to strengthen

to local

the

Development

as a small was

financial

the

market

municipal

Marikina

(MVDCl)

and

the

surrounding

foundation,

being

is

market.

The

they

during

whole,

ventilation

and

thus

a,

and_its

corner

area,

as

The

Sewage

repair,

ambulant

registered

public

so

or

buildings

poor.

the

market,,

dilapidated.

the market

in

the

buildings'

need

floods

Vendors

of major

and

and badly

Stallowners

old

very

ceilings

from

three

is

inadequate,

Spared

condition

cannot with

250

Government support

to

44

The

Cooperative

started

its

formal

capitalization ration

a

the

only present

1984

was

had

' be

and

lack

following

The

Cooperative

Mrs. of

of

•years

of

hence and

1975

its

ope-

herself

acted

Cooperative.

was

and

Initial

began who

transferred

loan

was

members

to

to

savings

open

members

meet

It

was

to

its

the

also

fail.

This

perception

failures

in

setting

up

credit

With

the

staff

to

area,

even to

through confidence

win

the

trust

without

pull the

perseverance

of factors

the

and

proper

through

years.

and

was was

confidence

of of

registered

manager_

market

contributing

the

cited

to

success:

area.

officers in

Cooperative

favorable

the

the

was

previous

people

winning

vendors, its

percepand

the

the

poor

Cooperative

upon

the

a

in

the

initial

in

of

COoperat;ive.

unstable,

cooperative

lack

••deposit

to

•based

patience

%he

the

the

remuneration,

and

The

of

to

Cooperative

the

traced

functions

to

to

and

repaymen't

fixed

with

partially

doomed

a

due

build-

limited

loan

minimum

deposit

and

were

with

primarily

about•the

that

the•capital

releases

their

was

benefits,

members

operation,

synchronized

problem

potential

Of

primary

the

10, year.

Calilung,

Cooperative

,of enthusiasm

knowledge its

early

scheduled

of

obligat_ion

able

December

the

Treasurer the

This

enthusiasm

tion

by

slow•and

collection.

and

and that

its

quite

to

This

owned

on

location.

During up

_17,000.

store

Manager

in,

registered

operation

was

in

as

was

and the wan

growth t_ust

and

following

as

i)

an

inten-

45

sive