BIBLIOGRAPHY DAISY T. KIMMAYONG. MARCH 2006....
BIBLIOGRAPHY
DAISY T. KIMMAYONG. MARCH 2006. A Case Study of the TAM-AN
Multipurpose Cooperative, Benguet State University, La Trinidad, Benguet.
Adviser: Evangeline B. Cungihan, MSc.
ABSTRACT
This case study was conducted to find out the growth rate in total membership,
the operational status of the cooperative, its services offered, the sources of funds of the
cooperative, and the strategies of the cooperative in managing its several branches.
This study was conducted at the main office in Banawe, Ifugao. Several
interviews were done with the general manager and some staff of the cooperative. The
financial information was provided by the internal auditor of the cooperative.
The cooperative started its operation in 1991 with only 24 members. At present it
has eleven branches located in different municipalities of Ifugao, Nueva Viscaya, and
Quirino Province as well as Santiago City. Its total members increased to 14,162 as of the
end of December 2004. Its growth in membership, total asset and paid-up share capital
was mainly due to its branching out to several places. Its main service offered was credit
with savings and time deposit in all its branches. The other services were resort found in
Bayombong, Nueva Viscaya and cable television net work located in its main office in
Banawe, Ifugao. The cooperative, like other cooperatives, was beset by problem on loan
delinquency. In order to force the delinquent borrowers to pay they resort to barangay
settlement or loan collection suit.
TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Rationale of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Scope and Limitation of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data Gathering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data to be Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
RESULTS AND DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Membership Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Business Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Motivational Programs of the Cooperative. . . . . . . . . . . . . . . . . . . . . . .
10
Credit Policies of the Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Sources of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
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Financial Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Allocation of Net Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
14
Problems Encountered by the Cooperative. . . . . . . . . . . . . . . . . . . . . . .
15
Strategies in Successful Implementation of
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Organizational Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
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INTRODUCTION
Rationale of the Study
Banaue is one of the well-known municipalities of Ifugao because of its
wonderful spot called the Banaue Rice Terraces. The major sources of income of the
residents are farming, weaving, woodcarving and swine rising. Some of these residents
who wanted to engage in entrepreneurship encountered problems on lack of capital to
support their livelihood. The problem of lack of capital lead into the organization of the
Tam-an Multipurpose Cooperative (TMPC). The residents of barangay Tam-an Banawe,
Ifugao for which the name was derived, organized this cooperative. Its objectives were to
promote savings and thrift among the people and create funds in order to grant loans for
productive purposes. It started first started as an association known as Tam-an Hog
Raisers Association founded by Mr. Jose Tomas, Jr. on November 9,1989. Later, it was
registered with the Cooperative Development Authority on May 9, 1991 as a cooperative
and named as Tam-an Multipurpose Cooperative, Inc. The initial members were 24 and it
started with only P25, 500 as capital. With its humble beginning it rise to a millionaire
cooperative. As of December 31, 2003, after about thirteen years, the number of members
increased to 12,781 and its total asset amounted to P56, 030,004. The sources of funds of
TMPC in starting the business operation were from the share capital of members and the
loan from the Land Bank of the Philippines. The initial management of the cooperative
was done by the vice chairman of the board as decided by the general assembly but as the
cooperative progressed in the succeeding year they hired a full time manager.
Among the cooperatives organized in Ifugao, TMPC is the only cooperative that
had branched out to different provinces. Its cooperation and by-laws was amended on
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
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March 27, 1999 to expand its area of operation to include eight (8) branches: Bayombong
branch, Solano branch, Madella branch, Diffun branch, Mayoyao branch, Santiago City
branch, Aritao, Nueva Viscaya branch, and Alfonso Lista, Ifugao branch. This study was
therefore conducted to look into the operation of the cooperative, how the affair of the
whole cooperative was managed.
Objectives of the Study
The study aims to:
1. look into the membership profile of TMPC in terms of:
a. growth rate
b. composition based on occupation and place of origin.
2. look into the operational status of the cooperative in terms of:
a. total assets
b. paid-up share capital
c. net surplus
3. find out the business services of the cooperative,
4. find out the internal and external sources of capital,
5. find out the strategies used for the successful implementation of their programs,
6. and find out the problems encountered and the solutions used to solve these
problems.
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Importance of the Study
The purpose of this study was to take a closer look on the performance of the
cooperative in terms of growth in membership and financial growth. Findings of this
study would serve as a basis/guide for TMPC to maintain its successful operation and
improve on its failure as well as for other cooperatives to emulate the good practices of
this cooperative specially those facing problems on membership and capitalization.
Furthermore, this study would serve as a reference for students who would like to
conduct a similar study in the future.
Scope and Limitation of the Study
The limitation of this study was the time in gathering the necessary information
was not enough. Since the general manager was so busy and always on the run, the
information provided by the assistant was not enough to give a complete picture of the
cooperative. Furthermore, there was also limited time and money of the researcher to go
back and collect the other information.
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METHODOLOGY
Locale and Time of the Study
This study was conducted at Tam-an Multipurpose Cooperative, Banaue Ifugao
and the other branches from December 2004 to January 2005.
Data Gathering
The data needed in this study was gathered through personal interview with the
general manager of the cooperative and the branch managers. The researcher also
interviewed some of the management staff and some members who happen to be in the
cooperative during visit to the cooperative. Secondary data were also taken from the past
year’s reports of the manager to the general assembly.
Data Gathered
The data gathered included the financial data from annual reports of the general
manager to the general assembly, number of members, policies of the cooperative and the
plans and programs of the cooperative.
Data Analysis
The data gathered were tabulated and analyzed using trend analysis and financial
ratios.
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RESULTS AND DISCUSSION
Membership Profile
This section presents the number of members, the composition of members as to
occupation and the composition of members as to place of origin.
Number of members. Tam-an Multipurpose Cooperative (TMPC) started its
operation with only 24 regular members in 1991. Due to the branching out of the
cooperative to different places, its members abruptly increased to 8,020 in 2002 then to
14,162 in 2004. The annual average increase in members is 2,047 or an annual growth
rate of 21.30%. Table 1 presents the growth in membership from 2001 to 2004. Data for
1992 to 2000 were not included because the cooperative do not have a record of this data.
Table 1. Annual growth in membership
YEAR
NEW MEMBERS
TOTAL MEMBERS RATE OF INCREASE
2001
8,020
2002
2,830
10,850
35.29
2003
1,931
12,781
17.80
2004
1,381
14,162
10.81
Average
2,047
21.30
Composition of members as to occupation. The members of the cooperative
composed of businessmen, private employees, government employees, farmers, and
others such as housewife and youth. The businessmen were traders, sari-sari store owners
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and vendors. According to the general manager, businessmen composed 80% of the total
membership. The private employees were teachers teaching in private schools, company
workers and employees of businesses. They comprised 5% of the total membership.
Another 5% were composed of government employees who are mostly public school
teachers. The remaining 5% composed of housewives and youth. This distribution was
based on the estimate of the manager.
According to Mr. Jose Thomas, the general manager of TMPC, they were giving
priorities in supporting businessmen because they observed that these members have
good credit standing. He further stated that by providing credit to these people, they could
improve their businesses and they would be able to employ other people.
Composition of members as to place of origin. Article 10 of RA6938 stated that
members must be residing or working in the area of operation. Since TMPC has
expanded into different provinces, members must be residing or working within the
municipality as shown in Exhibit 1.
Business Operation
Savings and time deposit. The savings and time deposit service is one of the
major operations of Tam-an Multipurpose Cooperative. It started its operation by
collecting savings deposit of children in the different schools near the cooperative. They
also had a door to door collection of savings done by the treasurer of the cooperative and
the members of the credit committee. This activity had helped a lot in accumulating
funds to be loaned out to members. This activity had stopped however because depositors
are now becoming scarce and the regular depositors voluntarily go to the cooperative
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office to deposit their money. The amount of savings and time deposits accumulated by
the cooperative as of the end of 2003 and 2004 are presented in Table 2. Data for the
other years were not provided to the researcher. However, according to the general
manager the savings deposit and time deposit had been increasing every year because of
their extra effort to promote their savings mobilization program in the different areas of
their operation. Total savings deposit in 2003 amount to P9.2 million then increased to
P10.5 million. The rate of increase in savings deposit was 14%. For time deposit, the total
time deposit in 2004 was P 10.7 million and increased to P11.89 million. The rate of
increase in time deposit was 10.76%.
Table 2. Savings and time deposit of the cooperative for 2003 and 2004
YEAR
SAVINGS DEPOSIT
TIME DEPOSIT
2003
9,239,951.28
10,741,729.00
2004
10,527,220.00
11,897,432.39
Rate of increase
13.93
10.75
In order to attract people to save their money in the cooperative, TAM-AN
offered high interest on savings and time deposits. Furthermore, they accept a minimum
savings deposit with interest of fifty pesos (P50.00) for children and one hundred pesos
for adult (P100.00). They even graduated their interest rate so that higher amount of
savings has higher interest rate. This encouraged their members who have extra cash to
deposit it in the cooperative rather than in the bank. Even a P50.00 deposit could earn an
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interest of 6% per annum. If the deposit is more than ten thousand pesos to twenty five
thousand pesos, the interest rate is 8% per annum and for deposits higher than twenty five
thousand pesos the interest rate is 8.5%. For the time deposit, the minimum amount of
time deposit to earn 10% per year is P5,000. If the time deposit is P25,000 it earns 11%
and if the amount is P50,000 the interest is 12%. The maximum interest for time deposit
is 12%. The interest on savings and time deposits are presented in Table 3.
Table 3. Interest rates on savings and time deposit
PARTICULAR
INTEREST PER ANNUM
Amount of Savings Deposit (in pesos)
50 – 10,000
6.0%
10,100 – 25,000
8.0%
25,100 – above
8.5 %
Amount of Time Deposit (in pesos)
5,000 - 24,999
10%
25,000 – 49,999
11%
50,000 - above
12%
Credit service. One service offered by the cooperative is credit. The manager
believes that cooperatives are organized to provide financial assistance to its members at
a lower interest rate compared to the banks and other financing institutions. The
cooperative provides different types of loans as presented in Exhibit 2. The first
classification of loan is the productive loan, which consisted of agriculture loan for agri-
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based projects, commercial loan for businesses, market vendors’ assistance for small
vendors and housing project for repairs of houses. The second classification of loan is the
providential loan consisting of education loan, hospitalization loan, and emergency loan.
Cable television network. Another service offered by the cooperative to its
members is the cable television network. This service operation started on September
1996 only in its main office in Banaue, Ifugao. The cooperative collects P1,500 as
membership fee and a monthly subscription fee of only P250. This service is offered to
all residence of Banaue. For regular members of the cooperative, those who have paid
their membership fee and the minimum share capital and undergone the PMES, they are
given a 20% discount on membership fee to the cable television network. There were two
cable television networks serving the area but according to some of the subscribers of
TAM-AN they preferred the service of the cooperative because it is cheaper and more
efficient than its competitor.
Resort. The third business operation of the cooperative is the resort, the Banaue
Mountain Resort, located in Bayombong, Nueva Vizcaya. This resort was originally
owned and operated by a private individual. This individual used it as collateral for a loan
of seven million pesos from the bank. When the property was about to be foreclosed by
the bank, the owner offered it to the cooperative as a mortgage so the cooperative paid
this loan. The cooperative gave 5 years for the owner to pay the mortgage. The owner
was not able to pay the loan after the agreed term thus the cooperative now owns the
property. As of 2004, the resort was able to earn a net income of 6 million pesos from the
rentals of pools, cottages, conference hall and hotel according to the manager. The
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income of the resort is being monitored by the internal auditor of the cooperative. Exhibit
3 presents the amount of fees charged by the resort.
Motivational Program of the Cooperative
Raffle promo. This program has been implemented to encourage more members
to join the cooperative and to motivate members to continue patronizing the cooperative.
This operation was done yearly during Christmas season only. The cooperative holds its
Christmas program every year and at the same time have the raffle draw. This is held at
the Banaue Resort where participants from different branches in the different provinces
could be accommodated.
To join this activity, a regular member must have a minimum share capital of
P3,000 or an associate member must have at least P5,000 savings deposit to be entitled
to one free ticket. Each member that meets this requirement are given one ticket each
regardless of the amount of total share capital or total savings deposit. According to the
manager, this activity had been attracting people to become members or deposit their
money in the cooperative and this helped the cooperative raise funds for their operation.
Credit policies
The credit policies consisted of the terms of loans, interest rate, other loan
charges, and loan requirements. These are presented in Exhibit 2.
Terms of loans. The different types of loan differ in their term for payment. For
the agricultural loan, this is payable in 4 months or one quarter, the commercial loan, and
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small housing loan are payable in 12 months while the small vendors assistance program
is payable in 3 months. The providential loan is payable in 2 months.
Interest rate. The different types of loan also differ in the interest charge. It can be
gleaned from the interest on loans that the cooperative is in support to the farmers
because it gives the lowest interest on agricultural loan. On the other hand, the interest
on provident loan is the highest which is 2% per month. The interest on commercial loan
is 15% per annum, small housing is 18% and the loan for market vendors is 19%.
Other loan charges. Aside from the interest rate, the cooperative also charge
service fee and loan redemption fund. The service fee forms part of the income of the
cooperative while the loan redemption fund is a reserved fund to offset losses from loans.
The cooperative charge a uniform rate of 1% of the gross loan while it charge again a
lower service fee for agricultural loan (2%) compared to the other loan except
providential loan which is only 1%.
Other loan requirement. The other loan requirements of the cooperative were
collateral for loans. For first time borrowers, when they borrow an amount greater than
their share capital they must submit a collateral. For old time borrowers with good credit
standing, they could borrow up to thirty thousand without any collateral. Another
requirement is the co-maker. The co-maker of the loan serves as the co-borrower, in case
the borrower cannot pay the loan, the cooperative could demand the co-maker to pay. The
other requirements are presented in Exhibit 2.
Sources of Funds
The cooperative had both internal and external sources of funds. According to the
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general manager, about 83% of the total asset of the cooperative in 2004 came from
internal sources such as savings and time deposits, paid –up share capital, accumulated
dividends, income from operation, raffle draw, and reserved funds. The other 17% came
from external sources such as bank loan and the income from the operation of the
Banawe Resort.
Financial Status
Paid-up share capital. Table 4 shows that the paid-up share capital from 2001 had
been continuously increasing. The increase in paid-up share capital was due to the
continuous increase in the number of members. The new members brought in additional
share capital. The total paid-up share capital in 2001 was 14.7 million pesos and this
increased to 18.4 million pesos in 2004 or a rate of increase of about 25%. However,
considering the average share capital per member, there was a decreasing trend. The
average share capital per member in 2001 was P1,840 but this amount decreased to only
P1,304 in 2004. This finding implies that growth in membership was faster than the
growth in paid-up share capital.
Table 4 . Paid-up share capital and rate of increase
YEAR
PAID-UP SHARE CAPITAL
RATE OF INCREASE
2001
14,757,605.00
2002
15,335,999.00
3.9
2003
17,926,403.28
16.8
2004
18,465,600.73
3.0
Average Rate of Increase
7.9
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Total asset. Like the paid-up share capital, total asset had been continuously
increasing from 2001 to 2004. The total asset in 2001 was 47.03 million pesos. This
increased by about 18% in 2002. The following year’s increment was very small but in
2004 the increase was a little bit higher. The cooperative reached a total paid up share
capital of 18.47 million pesos by the end of 2004 as shown in Table 5.
Ratio of share capital to total asset. The share capital of members is one source of
the total asset of the cooperative. Table 6 presents that share capital contributed about
31% to total asset in 2001 and 2003 but this ratio decreased to 30. This finding shows that
there are other important sources of total asset aside from the share capital of members.
Table 5. Total asset
YEAR
TOTAL ASSETS (P)
RATE OF INCREASE
2001
47,025,687.00
2002
55,523,693.21
18.07
2003
56,030,004.06
0.80
2004
59,985,701.10
7.00
Average Rate of Increase
8.62
Table 6. Ratio of share capital to total asset
YEAR
RATIO OF SHARE CAPITAL TO TOTAL ASSET
2001
31.38%
2002
27.62%
2003
31.99%
2004
30.78%
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Net surplus. As shown in Table 7 the net surplus for 2001 was P975,315. Net
surplus increased in 2002 but decreased in 2003 for the reason that the cooperative paid
the remaining balance of the Banaue Resort thus their operating capital was diverted to
that investment. The return to asset ratio shows that although the nominal value of net
surplus had been continuously increasing from 2001 to 2005, the return to asset had been
decreasing for the same period. This shows that the earning ability of their asset had been
decreasing. Besides, the ratio is also very low which implies that their asset could earn a
higher return elsewhere compared to the cooperative. The same implication is conveyed
by the ratio of net surplus to share capital.
Table 7. Net surplus of the cooperative for 2001 to 2004.
YEAR
AMOUNT OF NET
RATIO OF NET SURPLUS TO
SURPLUS
Total Asset
Share Capital
2001
975,315.00
0.021
0.07
2002
1,309,471.00
0.023
0.09
2003
241,375.81
0.004
0.01
2004
876,969.83
0.002
0.05
Allocation of Net Surplus
The by-laws of Tam-an Multipurpose Cooperative provides the allocation of net
surplus as follows: 10% for the General Reserve Fund and 10% for the CETF because
they need this in conducting trainings and seminars and during the general assembly
which is held every year and another10% for optional fund which is for the building and
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community development. The remaining amount will be allocated for patronage refund
and dividend. Of the remaining amount, 60% is allocated to interest on share capital and
40% for patronage refund.
Problems Encountered by the Cooperative
According to the general manager the cooperative does not have much problem
on the officers. Presently, the problem of the cooperative is the delinquency of members.
In this case, the officers have agreed that they may undergo barangay mediation or by a
collection suit to the delinquent members otherwise it will be the termination of their
membership. In the case of Banaue Main Office, the general manager stated that more
members were becoming delinquent because it is here where many cooperatives were
operating.
Strategies in Successful Implementation of Programs:
According to the general manager, in order to supervise all the branches of TMPC
he set a monthly schedule to visit all each branches. Aside from these, the general
assembly meeting is usually conducted every year with all of the members of TMPC
invited to attend. However, the general manger has just proposed that the general
assembly meeting would require all officers and representatives from the different
branches in order to lessen the expenses in transportation and food expenses.
To make the cooperative successful, the general manager made some strategies to
increase its membership because he believed that the sources of capital of the cooperative
are from the members. He did this by conducting seminars in all the barangays of each
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municipality. After the seminars in all the barangays, the general manager made a policy
that the first 15 person and the top 25 people who have the highest savings will be given
a premium prize which is the t-shirt printed with TMPC. This encouraged people to join
the seminar and deposit their money in the cooperative. With 12 days after the seminar an
amount of three hundred thousand pesos (P300,000) was accumulated from share capital
and savings deposits of new members. One goal of the cooperative is to generate an
amount of P300,000 in order to expand its area of operation. This strategy had been
repeated in other areas where the cooperative opened its branches. The minimum share
capital was P3,000 each member and a membership fee of P50.00. In order for the
members to continue patronizing the cooperative, a policy has been made that the weekly
savings of each member is P40.00 which is mandatory to all members. Failure to comply
with the rule within 2 months will be the termination of membership.
Since the cooperative is giving loans, they also made a policy in order to get rid of
bankruptcy. On the first loan, member-borrowers with good credit standing can borrow
the minimum amount of P5,000 and a maximum of P25,000 without any collateral.
Failure in paying loans after its maturity date and the given 1 month allowance will be the
collection of properties or through barangay mediation.
In addition, due to the different growth of business, the cooperative was able to
transfer some of their funds from branches with surplus funds to support the business of
other branches, which were in short of fund and gaining less income.
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Organizational Structure
The organizational structure of the cooperative is presented in Figure 1. It can be
noted from the figure that the general assembly is the highest in the organization. It is the
general assembly that elects the board of directors and the members of the different
committees. It was the board of directors that appointed the general manager. According
to the general manager, he is given the exclusive power by the cooperative’s by-laws to
appoint the other employees of the cooperative. He is the overall supervisor of all the
branches of the cooperative. Apart from the credit committee, election committee and
audit and inventory committee, there are other two committees, the executive
management committee and the complaint and grievance committee that are under the
supervision of the general manager. There are no committees in the branches, except the
management staff.
Each branch has its own branch manager. Under the branch manager is the senior
center manager and under the senior center manager is a center manager. Each branch has
its own cashier, teller, bookkeeper and posting clerk.
The different branches of TAM-AN Multipurpose Cooperative were as follows:
BRANCH
LOCATION
BRANCH
LOCATION
Branch 1
Banaue (main office)
Branch 6
Santiago City
Branch 2
Mayoyao
Branch 7
Maddela
Branch 3
Alfonso Lista
Branch 8
Diffun
Branch 4
Solano
Branch 9
Aritao
Branch 5
Bambang
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
18
GENERAL ASSEMBLY
CREDIT
ELECTION
BOARD OF
AUDIT & IN-
COMMITTEE
COMMITTEE
DIRECTORS
VENT. COM.
GENERAL
EDUC. & TRNG
MANAGER
COMMITTEE
EXECUTIVE
DRIVER
EXECUTIVE
COMPLIANT &
MANAGEMENT
SECRETARY
GRIEVANCE
COMMITTEE
INTERNAL
BUSINESS
ADMIN &
AUDITOR
OPERATIONS
FINANCE
DEPT.
DEPT.
Branch 1
Branch 2
Branch 3
Branch 4
Branch 5
Branch 6
Branch 5
Branch 6
Branch 7
Branch 8
Branch 9
Branch Manager
Branch Cashier
Senior Center Mgr.
Branch Bookkeeper
Teller
Center Manager
Posting Clerk
Figure. 1. Organizational Profile of TAM-AN Multipurpose Cooperative
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
19
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The TAM-AN Multipurpose Cooperative has a unique set up because it is the
only cooperative in the Cordillera Region that has many branches. This case study was
therefore conducted to find out the growth rate in total membership, the operational status
of the cooperative, its services offered, their sources of funds, and the strategies of the
cooperative in managing its several branches.
This study was conducted at the main office in Banawe, Ifugao. Several
interviews was done with the general manager and some staff of the cooperative. The
financial information was provided by the internal auditor of the cooperative.
The cooperative have eleven branches located in different municipalities of
Ifugao, Nueva Vizcaya, Quirino Province, and Santiago City. Its operation started in
1991 with just only 24 members. When it branched out to other places its members
increased abruptly. From 2001 to 2004, its total members increased at an annual rate of
21%. The service offered by the cooperative was mainly credit with savings and time
deposit in all its branches except, for the Bayombong branch that has a resort, named as
the Banawe Resort. The newest service offered at the main office was the cable television
network.
For the last four years fro 2001 to 2004, the total asset and the paid-up share
capital of the cooperative had been increasing at an annual rate of 8.62% and 7.9%,
respectively. The ratios of net surplus to total asset and to share capital however showed a
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
20
very low ratio which implies that the return to the member’s investment in the
cooperative was given a very low return.
The cooperative had a very effective strategy in encouraging people to join the
cooperative as evidenced by its branching out to different areas. The different branches of
the cooperative helped each other by sharing funds. The branch that has surplus fund can
lend it to the branch that is deficit in fund.
In terms of hiring employees in the different branches of the cooperative, the
general manager was given the authority to appoint employees.
The cooperative was having a problem on the delinquency of members in paying
their loans. Thus, they instituted some measures to collect these past due loans. They
either use barangay mediation or collection suit.
Conclusions
Based on the findings, the following conclusions were made:
1. The growth in total membership was very fast because of the effective strategy by
the general manager.
2. The total asset and the total paid-up share capital of the cooperative had been
increasing for the past years, however the financial ratios showed a very low return to
asset and return to share capital.
3. The different branches of the cooperative were helping each other in times of financial
need.
4. The general manager was given authority to appoint employees of the cooperative
which is suppose to be the function of the board of directors.
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
21
5. The cooperative encountered problems on loan delinquency especially at the main
branch and they are now under barangay mediation or collection suit to force the
delinquent borrowers to pay.
Recommendations
1. The officers and the management staff should continue to educate the members so that
they would not become delinquent. Besides, the cooperative should still help the
delinquent members to generate income so that they could pay their loan.
2. A thorough financial analysis should be done per branch to assess which branch is
performing well and which branch is financially problematic so that it could be given
attention.
3. The strategy used by the cooperative to attract people to join the cooperative was
effective but the management should do something to increase the return to members’
equity so that they would be encourage to patronize and invest their money in the
cooperative.
4. Hiring of employees in the cooperative should be the function of the board of directors
and that it should not be delegated to the general manger alone.
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
22
EXHIBIT 1
Residence of Members in Each Branch
BRANCH
MUNICIPALITY
PROVINCE
Banaue Main Office
Banaue
Ifugao
Hingyon
“
Lagawe
“
Kiangan
“
Hungduan
“
Tinoc
“
Asipulo
“
Mayoyao Branch
Mayoyao
Ifugao
Alfonso Lista Branch
Alfonso Lista
Ifugao
Aguinaldo
“
Solano Branch
Lamut
Ifugao
Solano
Nueva Vizcaya
Quezon
“
Villa Berde
“
Diadi
“
Bagabag
“
Bayombong
“
Bambang Branch
Kasibu
Nueva Vizcaya
Bambang
“
Dupax Norte
“
Dupax Sur
“
Aritao Branch
Aritao
“
Sta. Fe
“
Kayapa
“
Santiago Branch
Santiago city
Santiago City
Ramon
Isabela
Cordon
“
San Mateo
“
Maddela Branch
Maddela
Quirino
Nagtipunan
“
Aglipay
“
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
23
Diffun Branch
Diffun
Quirino
Cabarruguis
“
Saguday
“
Dibibi
“
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
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EXHIBIT 2
Types of Loan and its Policies
A. TYPES OF LOANS
1. Productive Loans
a. Agricultural loan
This is given out purely for agri-based projects.
b. Commercial loan
This loan is intended for business purposes.
d. Market vendor assistance
This loan is intended to market vendors only.
program
2. Providential Loans
a. Educational loan
b. Hospitalization loan
c. Small housing loan
This loan is provided for small house repairs or
to augment the capital of a member-borrower to
build a house.
c. Emergency loan
B. TERMS OF LOANS
MONTHS
1. Agricultural loan
4
2. Commercial loan
12
3. Small housing loan
12
4. MVAP
3
5. Providential loan
2
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25
C. MAXIMUM AMOUNT TO BE LOANED
The actual amount a member wishes to borrow is dependent upon his actual need.
However, for purposes of equalizing and rationalizing the lending policies, a member can
barrow under the following limitations.
1. Productive Loans
a. A member can barrow an amount equal to his share capital or even lower.
In cases like this, the member-borrower needs not to have collateral except
to have at least one witness and the approval of the manager.
b. A member may borrow the capacity of 3 times of his share capital.
However, the cooperative may require collateral if the amount to borrow
will exceed to P5,000.
2. Providential Loans
On the first application of loan, the amount to be borrowed under this type of loan
is from a minimum of P100 to a maximum of P5,000 wherein collateral is not
required.
D. INTEREST RATE FOR EACH TYPE OF LOANS
TYPE OF LOAN
INT.
SERVICE
LRF
1. Agriculture
12%
2%
1%
2. Commercial
15%
4%
1%
3. Small Housing
18%
4%
1%
4. MVAP
19%
4%
1%
5. Providential
2%
1%
1%
Add-on charges - 2% penalty is charged for amortization or installment not paid on time.
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
26
E. QUALIFICATIONS IN BORROWING
Who may avail of loans:
1. A member who have at least paid his minimum financial obligation and have
undertaken one pre-membership seminar.
2. A member in good standing in paying loans and follows and observes rules,
policies, and practice of the cooperative.
3. A member of good moral character.
4. A member who has a permanent residence in the province of its area of operation.
5. A member who have no civil or criminal case filed against him.
F. REQUIREMENTS ON LOAN APPLICATION
1. Purpose of the loan
2. Availability of funds
3. Completion of application forms
4. Submission of required documents to support such loans
5. Inspection report of loan officer and other staff concerning borrower and actual
loan need and status of collateral offered and project undertaken
6. Endorsement of manager
7. Signature of at least two co-members
8. Marital consent for married members
9. Approval of approving officers
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27
EXHIBIT 3
Fees at Banaue Mountain Resort
1. ENTRANCE AND POOL FEES
CLASSIFICATION
ENTRANCE FEE
POOL FEE
Children
15
15
Adult
25
25
2. COTTAGE FEES
KIND
RENTAL FEE
Round
100
Double long
150
Triple long
180
3. CONFERENCE HALL FEES
TYPE
RENTAL FEE PER 24 HRS
Mini-conference
500
Conference
1,500
4. HOTEL FEES
STANDARD ROOM
OVERNIGHT FEES
Single bed
350
Double bed
400
Triple bed
450
AIRCONDITION ROOMS
500
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
EXHIBIT 4
Functions of Management Staff
POSITION
ORGANIZATIO
JOB SPECIFICATION SCOPE OF
FUNCTIONS AND DUTIES
NAL
RESPONSIBILITY
RELATIONSHIP
1. Branch Manager
Reports to:
-Graduate of four-year As a key employee and
-Supervises the operational activities of
Gen. Mgr.
course
representative of the Gen. the branch through maintaining
Supervises:
manager in the area,
protective measures against
Bookkeeper
- Working knowledge
he/she shall see to it that malpractices and other acts of
Cashier
with coop operational
the problems in the
employees in the branch.
Senior Center
policies and procedures branch are well attended. - Supervises the activities of his
Mgr.
H/she shall conduct the
subordinates in conformity with the
- At least 2 years
operations of the branch generally accepted coop policies and
experience in a
in accordance with the
procedures
supervisory work
coop’s existing policies, - Recommends policies and procedures
procedures & practices. to improve the financial and operational
- Possesses leadership
activities of the branch.
potentials to work
- Assist the general manager by
harmoniously with
implementing coop policies and
other people
procedures correctly.
-Regularly reports to the general
manager and the BOD on the results of
operations of the branch under him/her.
-Assist in the preparation of annual
budget.
-Performs other duties as maybe
assigned from time to time.
2. Admin. And
Reports to: Gen.
-commerce graduate
Responsible in the
- Develops procedures to be used in
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29
Finance Dept. Head Mgr.
major in Accounting,
development and
establishing and maintaining an accurate
preferably a CPA
maintenance of an
and systematic accounting of financial
-two years progressive effective accounting
transactions.
responsible experience system as well as the
that must have
preparation of financial
-Prepares monthly consolidated
provided familiarity w/ reports for the general
financial statement and other statistical
mgt. principles,
manager and the board of reports required by various users and
methods and
directors.
advises the GM on the financial status
techniques.
of the coop.
- A working knowledge - Responsible for the
- Prepares the coop’s budget for
I finance mgt.,
carrying out of programs, planning and programming and prepares
accounting and
plans, and policies as
supporting justifications and
bookkeeping.
prescribed by the
explanations for such budget proposals
-possesses leadership
cooperative
-Monitors the monthly disbursements of
potential to work
the coop in accordance w/ the approve
harmoniously with
budget.
other people
- Plans and prepares programs for
personnel administration and
management which normally includes
recruitment, training, classifications,
administration, and personnel record
keeping.
- Advise employees on personnel
policies, practices and problems.
-recommends techniques and procedures
for making appraisals and evaluation of
work performance.
-Supervises the preparation of actions
on appointments, leaves, transfers,
resignations, retirement, separation,
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30
promotion, salary adjustments and other
personnel benefits and services.
-Performs other duties and functions as
maybe assigned from time to time
3.Center Manager
Reports to:
- College level
- The center manager is
- Helps in the identification of target
Senior Center
- Ability to work with
one of the most visible
groups.
Manager
figures
employees of the
- Validates applicants’ credit
- Competent in
cooperative and his
information sheet and collateral/existing
handling collection of
understanding of the
business and prepares corresponding
Loans Receivable.
cooperative’s program
report thereof.
- Ability to provide for will be transmitted to the - Makes collections on the basis of
fidelity bond required
members along his route schedules prepared by the senior center
by the coop.
according to his
manager and issues corresponding
- Ability to ride a
knowledge of the
receipts for payments received.
motorcycle (if this is
program. His actions and - Summarizes collection and submits the
applicable)
attitude will be
summary and cash to the Cashier upon
interpreted as
returning to the office.
representing the
- Personally follow-up collection of
cooperative. It is
delinquent members.
important therefore that
- Reports change of address of members
the center manager be
to senior center manager.
knowledgeable,
- Other official duties as maybe assigned
courteous and
to him/her from time to time.
responsible to the
members.
- As collector, he/she is
responsible for the
collection of amount due
from members and the
follow up of delinquent
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
31
accounts.
4. Teller
Reports to :
- College level
- Responsible and
- Receives payments and issues
Cashier
-Ability to operate accountable for the
corresponding receipts
office machines.
payments received in the - Prepares daily collection report
- Ability to put bond as form of cash and/ or
- Remits daily collection to cashier.
required by the coop.
check.
- Performs other functions and duties as
- Ability to meet the
may be assigned from time to time.
public in a courteous
and cheerful manner.
-Honest and
trustworthy.
5. Branch
Reports to :
- BS Accountancy or Responsible for the
- Maintain accounting records in clear
Bookkeeper
Branch Manager
BSC Major in
maintenance of
and concise form, making it available as
Supervises;
Accounting graduate.
accounting records and
ready reference for the efficient
Posting Clerks
- At least one (1) year the development of
operation of the coop.
experience in
financial reports and
- Check all requests for payments and
bookkeeping works.
analysis that are required prepares the corresponding vouchers
-Ability to work
by the coop and other
ensuring that all pertinent documents are
accurately with figures. parties.
attached.
-Ability to operate
- Chronologically arranges and files all
office equipments.
invoices and vouchers for convenient
-With basic knowledge
reference and support of accounting
in coop accounting.
records.
- Enter all financial transactions to the
correct register.
- Prepares journal voucher, posts to and
maintain general journal register.
- Post all entries form the different
register to the general ledgers.
- Prepares monthly trial balance and
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
32
financial statements.
- Prepares monthly bank reconciliation.
- Prepares schedules of accounts
receivables, office properties and
equipments and accounts payables.
- Makes schedule for the preparation of
payroll and other coop obligations as
they fall due.
- Performs other duties as maybe
required from time to time.
6. Senior Center
Reports to:
- Graduate of any four - Responsible in the
- Supervises center managers in the
Manager
Branch Manager
(4) year course
implementation and
identification of target groups.
Supervises:
- At least two (2) years promotion of the lending - Assist the Education Committee in the
Center Manager
experience in related programs of the
developing and implementation of
job.
cooperative.
training programs.
- Adequate knowledge
- Checks and verifies all recommended
of the cooperative’s
loan application.
loan and collection
- Prepares the request for payment of all
procedures and
approved loan applications.
policies.
- Maintains a schedule of loan
- Possesses leadership
collection.
potentials to work
- Prepares reports and analysis of loans
harmoniously with
receivable status.
different groups of
- Recommends strategies on loan
people.
collection.
- Must have the ability
- Coordinates with other groups of
to speak/write effective
people to promote goodwill of the coop
English and in the
and ensure greater participation and
dialect used in the area.
involvement of members in coop affairs.
- Performs other duties and functions as
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
33
may be assigned from time to time.
7. Branch Cashier
Reports to :
- Commerce graduate - Responsible for the
- Receives payments and issues
Branch Manager
preferably with
receipt and accounting of corresponding receipts.
Supervises:
experience in cash all accounting receipts,
- Checks, verify, and reconcile the daily
Tellers, Sales
handling.
deposits of funds and
cash collection reports of collectors,
Clerks,
- Ability to operate reconciliation of the
sales clerks and information clerks.
Information
office machines.
coop’s cash account.
- Prepares daily reports of collections
Clerks
- Ability to provide
and disbursements.
fidelity bond as
- Prepares daily cash position reports.
required by the coop.
- Reconciles daily with the bookkeeper
- Ability to meet the
and prepares bank deposits.
public in a courteous
- Maintains control of the petty cash
and cheerful manner.
fund.
-Honest and
- Performs other duties as maybe
trustworthy.
assigned from time to time.
8. Business
Reports to:
- Graduate of any four - Responsible in the
- Supervises the implementation of
Operations
General Manager year course.
implementation of
lending programs and ensure the strict
Department Head
- At least three (3) lending programs such as adherence to all credit policies and
years responsible
the Poverty Eradication
regulations.
experience in
Program and Market
- Designs and supervises the conduct of
cooperative lending
Vendors Assistance
trainings.
programs and
Program as well as the
- Recommends to the General Manager
marketing strategies.
development and
prospective business expansion
- A working knowledge implementation of fund
programs after the conduct of a
in financial generation programs.
thorough survey, environmental
management.
scanning and profiling.
- Possesses leadership
- Review, evaluate and recommend
potential to work
approval of loans.
harmoniously with
- Conduct regular group and center
other people.
assessment and evaluation so as to
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
34
provide the required intervention
strategies and appropriate
recommendations.
- Supervises the preparation of
monitoring reports such as the weekly
cash position reports and weekly fund
generation and disposal report.
- Performs other duties as maybe
assigned from time to time.
9. Internal Auditor
Report to :
-An Accounting
- The Internal Auditor, as - Reviews and evaluates the soundness,
General Manager graduate preferably a a member of the
adequacy and application of accounting
CPA.
management staff is
and other operating controls and makes
-Has thorough
responsible in providing reports and recommendations for
knowledge in general the necessary information deficiencies found.
and coop accounting and data on financial
- Assists management in financial
including financial
operations, trends and
forecasting and long range planning
accounting or
controls that will guide
affecting financial operations.
management, budget management in setting-
- Analyzes revenue and expense
planning and internal up objectives and
accounts and informs management on
controls.
managerial decisions.
significant changes and deviations from
- Must have at least -
operational budgets and standards based
three (3) years
on the consolidated report.
experience in
- Ascertains that the financial
accounting and two (2)
transactions are properly documented
years in auditing works
and in accordance with established
- Ability to evaluate
policies and that cash are properly
and design effective
handled, remitted, deposited and
internal controls.
recorded.
- Able to analyze
- Recommends management policies
performance indicators,
and procedures relative to an effective
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
35
trends and ratios.
internal control on safeguarding of the
coop’s assets.
- Evolves a program on audit system.
-Performs other duties as maybe
assigned from time to time.
10. Executive
Reports to :
- BSSA Graduate or - This is a sensitive and
- The secretary schedules and takes
Secretary
General Manager any related four-year key position in the
notes of all official functions of the
course.
cooperative because the
General Manager within a day, a week
- Proficient in English secretary often represents or a month as the case maybe. He/she
either written or oral.
the cooperative to other
prepares draft of reports on activities for
- Ability to keep people when performing the GM’s review.
confidential
his/her functions.
- As directed, prepares notices of
information and works.
meetings, takes down minutes and
- Ability to efficiently
maintains file of all policies, minutes
produce neat and
and resolutions.
correct works.
- Receives, routes and files
correspondence, reports and documents.
- Screens and attends to visitors, makes
appointments and refers visitors to
proper parties and provides them with
needed information.
- Performs other duties and
responsibilities as maybe assigned from
time to time.
11. Driver
Reports to :
- High school graduate Is responsible for the
- Check the vehicle to be sure that it is
General Manager or vocational course driving and care of
adequately supplied with gasoline, oil,
graduate.
vehicles of the
water and air pressure before a trip.
- Five (5) years cooperative. He is to
- Keeps vehicle washed, cleaned and
experience in driving maintain the vehicle in
tidy.
and maintaining
good operating condition. - Fills up daily trip tickets and reports
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
36
vehicles.
accidents and other irregularities during
- With professional
trips.
driver’s license.
- Makes minor repairs and tune-ups.
- Ability to do minor
- Sees to it that vehicle is subjected to
vehicle tune-ups and
routine check-ups and that the
repair works.
maintenance schedule is followed.
- Of good moral
- Performs other duties as maybe
character.
assigned from time to time.
12. Posting Clerk
Reports to:
- BSC graduate
- Responsible in
- Maintains members’ subsidiary
Bookkeeper
- Ability to operate maintaining neat and
ledgers.
office machines and accurate members’
- Post all receipts and disbursements of
maintains neat and subsidiary ledgers.
members’ loans of whatever kind.
accurate works.
- Conducts daily reconciliation of
- Ability to analyze
subsidiary ledgers with the cashier’s
records and able to
records.
work accurately with
- Conducts monthly reconciliation of
figures.
subsidiary ledgers to bookkeeper’s
- At least one (1) year
records.
experience in
- Prepares aging of loans receivable.
accounting works.
- Performs other duties as maybe
assigned from time to time.
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
DAISY T. KIMMAYONG. MARCH 2006. A Case Study of the TAM-AN
Multipurpose Cooperative, Benguet State University, La Trinidad, Benguet.
Adviser: Evangeline B. Cungihan, MSc.
ABSTRACT
This case study was conducted to find out the growth rate in total membership,
the operational status of the cooperative, its services offered, the sources of funds of the
cooperative, and the strategies of the cooperative in managing its several branches.
This study was conducted at the main office in Banawe, Ifugao. Several
interviews were done with the general manager and some staff of the cooperative. The
financial information was provided by the internal auditor of the cooperative.
The cooperative started its operation in 1991 with only 24 members. At present it
has eleven branches located in different municipalities of Ifugao, Nueva Viscaya, and
Quirino Province as well as Santiago City. Its total members increased to 14,162 as of the
end of December 2004. Its growth in membership, total asset and paid-up share capital
was mainly due to its branching out to several places. Its main service offered was credit
with savings and time deposit in all its branches. The other services were resort found in
Bayombong, Nueva Viscaya and cable television net work located in its main office in
Banawe, Ifugao. The cooperative, like other cooperatives, was beset by problem on loan
delinquency. In order to force the delinquent borrowers to pay they resort to barangay
settlement or loan collection suit.
TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Rationale of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Scope and Limitation of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data Gathering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data to be Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
RESULTS AND DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Membership Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Business Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Motivational Programs of the Cooperative. . . . . . . . . . . . . . . . . . . . . . .
10
Credit Policies of the Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Sources of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
ii
Financial Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Allocation of Net Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
14
Problems Encountered by the Cooperative. . . . . . . . . . . . . . . . . . . . . . .
15
Strategies in Successful Implementation of
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Organizational Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
iii
INTRODUCTION
Rationale of the Study
Banaue is one of the well-known municipalities of Ifugao because of its
wonderful spot called the Banaue Rice Terraces. The major sources of income of the
residents are farming, weaving, woodcarving and swine rising. Some of these residents
who wanted to engage in entrepreneurship encountered problems on lack of capital to
support their livelihood. The problem of lack of capital lead into the organization of the
Tam-an Multipurpose Cooperative (TMPC). The residents of barangay Tam-an Banawe,
Ifugao for which the name was derived, organized this cooperative. Its objectives were to
promote savings and thrift among the people and create funds in order to grant loans for
productive purposes. It started first started as an association known as Tam-an Hog
Raisers Association founded by Mr. Jose Tomas, Jr. on November 9,1989. Later, it was
registered with the Cooperative Development Authority on May 9, 1991 as a cooperative
and named as Tam-an Multipurpose Cooperative, Inc. The initial members were 24 and it
started with only P25, 500 as capital. With its humble beginning it rise to a millionaire
cooperative. As of December 31, 2003, after about thirteen years, the number of members
increased to 12,781 and its total asset amounted to P56, 030,004. The sources of funds of
TMPC in starting the business operation were from the share capital of members and the
loan from the Land Bank of the Philippines. The initial management of the cooperative
was done by the vice chairman of the board as decided by the general assembly but as the
cooperative progressed in the succeeding year they hired a full time manager.
Among the cooperatives organized in Ifugao, TMPC is the only cooperative that
had branched out to different provinces. Its cooperation and by-laws was amended on
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
2
March 27, 1999 to expand its area of operation to include eight (8) branches: Bayombong
branch, Solano branch, Madella branch, Diffun branch, Mayoyao branch, Santiago City
branch, Aritao, Nueva Viscaya branch, and Alfonso Lista, Ifugao branch. This study was
therefore conducted to look into the operation of the cooperative, how the affair of the
whole cooperative was managed.
Objectives of the Study
The study aims to:
1. look into the membership profile of TMPC in terms of:
a. growth rate
b. composition based on occupation and place of origin.
2. look into the operational status of the cooperative in terms of:
a. total assets
b. paid-up share capital
c. net surplus
3. find out the business services of the cooperative,
4. find out the internal and external sources of capital,
5. find out the strategies used for the successful implementation of their programs,
6. and find out the problems encountered and the solutions used to solve these
problems.
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Importance of the Study
The purpose of this study was to take a closer look on the performance of the
cooperative in terms of growth in membership and financial growth. Findings of this
study would serve as a basis/guide for TMPC to maintain its successful operation and
improve on its failure as well as for other cooperatives to emulate the good practices of
this cooperative specially those facing problems on membership and capitalization.
Furthermore, this study would serve as a reference for students who would like to
conduct a similar study in the future.
Scope and Limitation of the Study
The limitation of this study was the time in gathering the necessary information
was not enough. Since the general manager was so busy and always on the run, the
information provided by the assistant was not enough to give a complete picture of the
cooperative. Furthermore, there was also limited time and money of the researcher to go
back and collect the other information.
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4
METHODOLOGY
Locale and Time of the Study
This study was conducted at Tam-an Multipurpose Cooperative, Banaue Ifugao
and the other branches from December 2004 to January 2005.
Data Gathering
The data needed in this study was gathered through personal interview with the
general manager of the cooperative and the branch managers. The researcher also
interviewed some of the management staff and some members who happen to be in the
cooperative during visit to the cooperative. Secondary data were also taken from the past
year’s reports of the manager to the general assembly.
Data Gathered
The data gathered included the financial data from annual reports of the general
manager to the general assembly, number of members, policies of the cooperative and the
plans and programs of the cooperative.
Data Analysis
The data gathered were tabulated and analyzed using trend analysis and financial
ratios.
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
5
RESULTS AND DISCUSSION
Membership Profile
This section presents the number of members, the composition of members as to
occupation and the composition of members as to place of origin.
Number of members. Tam-an Multipurpose Cooperative (TMPC) started its
operation with only 24 regular members in 1991. Due to the branching out of the
cooperative to different places, its members abruptly increased to 8,020 in 2002 then to
14,162 in 2004. The annual average increase in members is 2,047 or an annual growth
rate of 21.30%. Table 1 presents the growth in membership from 2001 to 2004. Data for
1992 to 2000 were not included because the cooperative do not have a record of this data.
Table 1. Annual growth in membership
YEAR
NEW MEMBERS
TOTAL MEMBERS RATE OF INCREASE
2001
8,020
2002
2,830
10,850
35.29
2003
1,931
12,781
17.80
2004
1,381
14,162
10.81
Average
2,047
21.30
Composition of members as to occupation. The members of the cooperative
composed of businessmen, private employees, government employees, farmers, and
others such as housewife and youth. The businessmen were traders, sari-sari store owners
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
6
and vendors. According to the general manager, businessmen composed 80% of the total
membership. The private employees were teachers teaching in private schools, company
workers and employees of businesses. They comprised 5% of the total membership.
Another 5% were composed of government employees who are mostly public school
teachers. The remaining 5% composed of housewives and youth. This distribution was
based on the estimate of the manager.
According to Mr. Jose Thomas, the general manager of TMPC, they were giving
priorities in supporting businessmen because they observed that these members have
good credit standing. He further stated that by providing credit to these people, they could
improve their businesses and they would be able to employ other people.
Composition of members as to place of origin. Article 10 of RA6938 stated that
members must be residing or working in the area of operation. Since TMPC has
expanded into different provinces, members must be residing or working within the
municipality as shown in Exhibit 1.
Business Operation
Savings and time deposit. The savings and time deposit service is one of the
major operations of Tam-an Multipurpose Cooperative. It started its operation by
collecting savings deposit of children in the different schools near the cooperative. They
also had a door to door collection of savings done by the treasurer of the cooperative and
the members of the credit committee. This activity had helped a lot in accumulating
funds to be loaned out to members. This activity had stopped however because depositors
are now becoming scarce and the regular depositors voluntarily go to the cooperative
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
7
office to deposit their money. The amount of savings and time deposits accumulated by
the cooperative as of the end of 2003 and 2004 are presented in Table 2. Data for the
other years were not provided to the researcher. However, according to the general
manager the savings deposit and time deposit had been increasing every year because of
their extra effort to promote their savings mobilization program in the different areas of
their operation. Total savings deposit in 2003 amount to P9.2 million then increased to
P10.5 million. The rate of increase in savings deposit was 14%. For time deposit, the total
time deposit in 2004 was P 10.7 million and increased to P11.89 million. The rate of
increase in time deposit was 10.76%.
Table 2. Savings and time deposit of the cooperative for 2003 and 2004
YEAR
SAVINGS DEPOSIT
TIME DEPOSIT
2003
9,239,951.28
10,741,729.00
2004
10,527,220.00
11,897,432.39
Rate of increase
13.93
10.75
In order to attract people to save their money in the cooperative, TAM-AN
offered high interest on savings and time deposits. Furthermore, they accept a minimum
savings deposit with interest of fifty pesos (P50.00) for children and one hundred pesos
for adult (P100.00). They even graduated their interest rate so that higher amount of
savings has higher interest rate. This encouraged their members who have extra cash to
deposit it in the cooperative rather than in the bank. Even a P50.00 deposit could earn an
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
8
interest of 6% per annum. If the deposit is more than ten thousand pesos to twenty five
thousand pesos, the interest rate is 8% per annum and for deposits higher than twenty five
thousand pesos the interest rate is 8.5%. For the time deposit, the minimum amount of
time deposit to earn 10% per year is P5,000. If the time deposit is P25,000 it earns 11%
and if the amount is P50,000 the interest is 12%. The maximum interest for time deposit
is 12%. The interest on savings and time deposits are presented in Table 3.
Table 3. Interest rates on savings and time deposit
PARTICULAR
INTEREST PER ANNUM
Amount of Savings Deposit (in pesos)
50 – 10,000
6.0%
10,100 – 25,000
8.0%
25,100 – above
8.5 %
Amount of Time Deposit (in pesos)
5,000 - 24,999
10%
25,000 – 49,999
11%
50,000 - above
12%
Credit service. One service offered by the cooperative is credit. The manager
believes that cooperatives are organized to provide financial assistance to its members at
a lower interest rate compared to the banks and other financing institutions. The
cooperative provides different types of loans as presented in Exhibit 2. The first
classification of loan is the productive loan, which consisted of agriculture loan for agri-
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
9
based projects, commercial loan for businesses, market vendors’ assistance for small
vendors and housing project for repairs of houses. The second classification of loan is the
providential loan consisting of education loan, hospitalization loan, and emergency loan.
Cable television network. Another service offered by the cooperative to its
members is the cable television network. This service operation started on September
1996 only in its main office in Banaue, Ifugao. The cooperative collects P1,500 as
membership fee and a monthly subscription fee of only P250. This service is offered to
all residence of Banaue. For regular members of the cooperative, those who have paid
their membership fee and the minimum share capital and undergone the PMES, they are
given a 20% discount on membership fee to the cable television network. There were two
cable television networks serving the area but according to some of the subscribers of
TAM-AN they preferred the service of the cooperative because it is cheaper and more
efficient than its competitor.
Resort. The third business operation of the cooperative is the resort, the Banaue
Mountain Resort, located in Bayombong, Nueva Vizcaya. This resort was originally
owned and operated by a private individual. This individual used it as collateral for a loan
of seven million pesos from the bank. When the property was about to be foreclosed by
the bank, the owner offered it to the cooperative as a mortgage so the cooperative paid
this loan. The cooperative gave 5 years for the owner to pay the mortgage. The owner
was not able to pay the loan after the agreed term thus the cooperative now owns the
property. As of 2004, the resort was able to earn a net income of 6 million pesos from the
rentals of pools, cottages, conference hall and hotel according to the manager. The
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10
income of the resort is being monitored by the internal auditor of the cooperative. Exhibit
3 presents the amount of fees charged by the resort.
Motivational Program of the Cooperative
Raffle promo. This program has been implemented to encourage more members
to join the cooperative and to motivate members to continue patronizing the cooperative.
This operation was done yearly during Christmas season only. The cooperative holds its
Christmas program every year and at the same time have the raffle draw. This is held at
the Banaue Resort where participants from different branches in the different provinces
could be accommodated.
To join this activity, a regular member must have a minimum share capital of
P3,000 or an associate member must have at least P5,000 savings deposit to be entitled
to one free ticket. Each member that meets this requirement are given one ticket each
regardless of the amount of total share capital or total savings deposit. According to the
manager, this activity had been attracting people to become members or deposit their
money in the cooperative and this helped the cooperative raise funds for their operation.
Credit policies
The credit policies consisted of the terms of loans, interest rate, other loan
charges, and loan requirements. These are presented in Exhibit 2.
Terms of loans. The different types of loan differ in their term for payment. For
the agricultural loan, this is payable in 4 months or one quarter, the commercial loan, and
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11
small housing loan are payable in 12 months while the small vendors assistance program
is payable in 3 months. The providential loan is payable in 2 months.
Interest rate. The different types of loan also differ in the interest charge. It can be
gleaned from the interest on loans that the cooperative is in support to the farmers
because it gives the lowest interest on agricultural loan. On the other hand, the interest
on provident loan is the highest which is 2% per month. The interest on commercial loan
is 15% per annum, small housing is 18% and the loan for market vendors is 19%.
Other loan charges. Aside from the interest rate, the cooperative also charge
service fee and loan redemption fund. The service fee forms part of the income of the
cooperative while the loan redemption fund is a reserved fund to offset losses from loans.
The cooperative charge a uniform rate of 1% of the gross loan while it charge again a
lower service fee for agricultural loan (2%) compared to the other loan except
providential loan which is only 1%.
Other loan requirement. The other loan requirements of the cooperative were
collateral for loans. For first time borrowers, when they borrow an amount greater than
their share capital they must submit a collateral. For old time borrowers with good credit
standing, they could borrow up to thirty thousand without any collateral. Another
requirement is the co-maker. The co-maker of the loan serves as the co-borrower, in case
the borrower cannot pay the loan, the cooperative could demand the co-maker to pay. The
other requirements are presented in Exhibit 2.
Sources of Funds
The cooperative had both internal and external sources of funds. According to the
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
12
general manager, about 83% of the total asset of the cooperative in 2004 came from
internal sources such as savings and time deposits, paid –up share capital, accumulated
dividends, income from operation, raffle draw, and reserved funds. The other 17% came
from external sources such as bank loan and the income from the operation of the
Banawe Resort.
Financial Status
Paid-up share capital. Table 4 shows that the paid-up share capital from 2001 had
been continuously increasing. The increase in paid-up share capital was due to the
continuous increase in the number of members. The new members brought in additional
share capital. The total paid-up share capital in 2001 was 14.7 million pesos and this
increased to 18.4 million pesos in 2004 or a rate of increase of about 25%. However,
considering the average share capital per member, there was a decreasing trend. The
average share capital per member in 2001 was P1,840 but this amount decreased to only
P1,304 in 2004. This finding implies that growth in membership was faster than the
growth in paid-up share capital.
Table 4 . Paid-up share capital and rate of increase
YEAR
PAID-UP SHARE CAPITAL
RATE OF INCREASE
2001
14,757,605.00
2002
15,335,999.00
3.9
2003
17,926,403.28
16.8
2004
18,465,600.73
3.0
Average Rate of Increase
7.9
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Total asset. Like the paid-up share capital, total asset had been continuously
increasing from 2001 to 2004. The total asset in 2001 was 47.03 million pesos. This
increased by about 18% in 2002. The following year’s increment was very small but in
2004 the increase was a little bit higher. The cooperative reached a total paid up share
capital of 18.47 million pesos by the end of 2004 as shown in Table 5.
Ratio of share capital to total asset. The share capital of members is one source of
the total asset of the cooperative. Table 6 presents that share capital contributed about
31% to total asset in 2001 and 2003 but this ratio decreased to 30. This finding shows that
there are other important sources of total asset aside from the share capital of members.
Table 5. Total asset
YEAR
TOTAL ASSETS (P)
RATE OF INCREASE
2001
47,025,687.00
2002
55,523,693.21
18.07
2003
56,030,004.06
0.80
2004
59,985,701.10
7.00
Average Rate of Increase
8.62
Table 6. Ratio of share capital to total asset
YEAR
RATIO OF SHARE CAPITAL TO TOTAL ASSET
2001
31.38%
2002
27.62%
2003
31.99%
2004
30.78%
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Net surplus. As shown in Table 7 the net surplus for 2001 was P975,315. Net
surplus increased in 2002 but decreased in 2003 for the reason that the cooperative paid
the remaining balance of the Banaue Resort thus their operating capital was diverted to
that investment. The return to asset ratio shows that although the nominal value of net
surplus had been continuously increasing from 2001 to 2005, the return to asset had been
decreasing for the same period. This shows that the earning ability of their asset had been
decreasing. Besides, the ratio is also very low which implies that their asset could earn a
higher return elsewhere compared to the cooperative. The same implication is conveyed
by the ratio of net surplus to share capital.
Table 7. Net surplus of the cooperative for 2001 to 2004.
YEAR
AMOUNT OF NET
RATIO OF NET SURPLUS TO
SURPLUS
Total Asset
Share Capital
2001
975,315.00
0.021
0.07
2002
1,309,471.00
0.023
0.09
2003
241,375.81
0.004
0.01
2004
876,969.83
0.002
0.05
Allocation of Net Surplus
The by-laws of Tam-an Multipurpose Cooperative provides the allocation of net
surplus as follows: 10% for the General Reserve Fund and 10% for the CETF because
they need this in conducting trainings and seminars and during the general assembly
which is held every year and another10% for optional fund which is for the building and
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
15
community development. The remaining amount will be allocated for patronage refund
and dividend. Of the remaining amount, 60% is allocated to interest on share capital and
40% for patronage refund.
Problems Encountered by the Cooperative
According to the general manager the cooperative does not have much problem
on the officers. Presently, the problem of the cooperative is the delinquency of members.
In this case, the officers have agreed that they may undergo barangay mediation or by a
collection suit to the delinquent members otherwise it will be the termination of their
membership. In the case of Banaue Main Office, the general manager stated that more
members were becoming delinquent because it is here where many cooperatives were
operating.
Strategies in Successful Implementation of Programs:
According to the general manager, in order to supervise all the branches of TMPC
he set a monthly schedule to visit all each branches. Aside from these, the general
assembly meeting is usually conducted every year with all of the members of TMPC
invited to attend. However, the general manger has just proposed that the general
assembly meeting would require all officers and representatives from the different
branches in order to lessen the expenses in transportation and food expenses.
To make the cooperative successful, the general manager made some strategies to
increase its membership because he believed that the sources of capital of the cooperative
are from the members. He did this by conducting seminars in all the barangays of each
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
16
municipality. After the seminars in all the barangays, the general manager made a policy
that the first 15 person and the top 25 people who have the highest savings will be given
a premium prize which is the t-shirt printed with TMPC. This encouraged people to join
the seminar and deposit their money in the cooperative. With 12 days after the seminar an
amount of three hundred thousand pesos (P300,000) was accumulated from share capital
and savings deposits of new members. One goal of the cooperative is to generate an
amount of P300,000 in order to expand its area of operation. This strategy had been
repeated in other areas where the cooperative opened its branches. The minimum share
capital was P3,000 each member and a membership fee of P50.00. In order for the
members to continue patronizing the cooperative, a policy has been made that the weekly
savings of each member is P40.00 which is mandatory to all members. Failure to comply
with the rule within 2 months will be the termination of membership.
Since the cooperative is giving loans, they also made a policy in order to get rid of
bankruptcy. On the first loan, member-borrowers with good credit standing can borrow
the minimum amount of P5,000 and a maximum of P25,000 without any collateral.
Failure in paying loans after its maturity date and the given 1 month allowance will be the
collection of properties or through barangay mediation.
In addition, due to the different growth of business, the cooperative was able to
transfer some of their funds from branches with surplus funds to support the business of
other branches, which were in short of fund and gaining less income.
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17
Organizational Structure
The organizational structure of the cooperative is presented in Figure 1. It can be
noted from the figure that the general assembly is the highest in the organization. It is the
general assembly that elects the board of directors and the members of the different
committees. It was the board of directors that appointed the general manager. According
to the general manager, he is given the exclusive power by the cooperative’s by-laws to
appoint the other employees of the cooperative. He is the overall supervisor of all the
branches of the cooperative. Apart from the credit committee, election committee and
audit and inventory committee, there are other two committees, the executive
management committee and the complaint and grievance committee that are under the
supervision of the general manager. There are no committees in the branches, except the
management staff.
Each branch has its own branch manager. Under the branch manager is the senior
center manager and under the senior center manager is a center manager. Each branch has
its own cashier, teller, bookkeeper and posting clerk.
The different branches of TAM-AN Multipurpose Cooperative were as follows:
BRANCH
LOCATION
BRANCH
LOCATION
Branch 1
Banaue (main office)
Branch 6
Santiago City
Branch 2
Mayoyao
Branch 7
Maddela
Branch 3
Alfonso Lista
Branch 8
Diffun
Branch 4
Solano
Branch 9
Aritao
Branch 5
Bambang
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
18
GENERAL ASSEMBLY
CREDIT
ELECTION
BOARD OF
AUDIT & IN-
COMMITTEE
COMMITTEE
DIRECTORS
VENT. COM.
GENERAL
EDUC. & TRNG
MANAGER
COMMITTEE
EXECUTIVE
DRIVER
EXECUTIVE
COMPLIANT &
MANAGEMENT
SECRETARY
GRIEVANCE
COMMITTEE
INTERNAL
BUSINESS
ADMIN &
AUDITOR
OPERATIONS
FINANCE
DEPT.
DEPT.
Branch 1
Branch 2
Branch 3
Branch 4
Branch 5
Branch 6
Branch 5
Branch 6
Branch 7
Branch 8
Branch 9
Branch Manager
Branch Cashier
Senior Center Mgr.
Branch Bookkeeper
Teller
Center Manager
Posting Clerk
Figure. 1. Organizational Profile of TAM-AN Multipurpose Cooperative
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
19
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The TAM-AN Multipurpose Cooperative has a unique set up because it is the
only cooperative in the Cordillera Region that has many branches. This case study was
therefore conducted to find out the growth rate in total membership, the operational status
of the cooperative, its services offered, their sources of funds, and the strategies of the
cooperative in managing its several branches.
This study was conducted at the main office in Banawe, Ifugao. Several
interviews was done with the general manager and some staff of the cooperative. The
financial information was provided by the internal auditor of the cooperative.
The cooperative have eleven branches located in different municipalities of
Ifugao, Nueva Vizcaya, Quirino Province, and Santiago City. Its operation started in
1991 with just only 24 members. When it branched out to other places its members
increased abruptly. From 2001 to 2004, its total members increased at an annual rate of
21%. The service offered by the cooperative was mainly credit with savings and time
deposit in all its branches except, for the Bayombong branch that has a resort, named as
the Banawe Resort. The newest service offered at the main office was the cable television
network.
For the last four years fro 2001 to 2004, the total asset and the paid-up share
capital of the cooperative had been increasing at an annual rate of 8.62% and 7.9%,
respectively. The ratios of net surplus to total asset and to share capital however showed a
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
20
very low ratio which implies that the return to the member’s investment in the
cooperative was given a very low return.
The cooperative had a very effective strategy in encouraging people to join the
cooperative as evidenced by its branching out to different areas. The different branches of
the cooperative helped each other by sharing funds. The branch that has surplus fund can
lend it to the branch that is deficit in fund.
In terms of hiring employees in the different branches of the cooperative, the
general manager was given the authority to appoint employees.
The cooperative was having a problem on the delinquency of members in paying
their loans. Thus, they instituted some measures to collect these past due loans. They
either use barangay mediation or collection suit.
Conclusions
Based on the findings, the following conclusions were made:
1. The growth in total membership was very fast because of the effective strategy by
the general manager.
2. The total asset and the total paid-up share capital of the cooperative had been
increasing for the past years, however the financial ratios showed a very low return to
asset and return to share capital.
3. The different branches of the cooperative were helping each other in times of financial
need.
4. The general manager was given authority to appoint employees of the cooperative
which is suppose to be the function of the board of directors.
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
21
5. The cooperative encountered problems on loan delinquency especially at the main
branch and they are now under barangay mediation or collection suit to force the
delinquent borrowers to pay.
Recommendations
1. The officers and the management staff should continue to educate the members so that
they would not become delinquent. Besides, the cooperative should still help the
delinquent members to generate income so that they could pay their loan.
2. A thorough financial analysis should be done per branch to assess which branch is
performing well and which branch is financially problematic so that it could be given
attention.
3. The strategy used by the cooperative to attract people to join the cooperative was
effective but the management should do something to increase the return to members’
equity so that they would be encourage to patronize and invest their money in the
cooperative.
4. Hiring of employees in the cooperative should be the function of the board of directors
and that it should not be delegated to the general manger alone.
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EXHIBIT 1
Residence of Members in Each Branch
BRANCH
MUNICIPALITY
PROVINCE
Banaue Main Office
Banaue
Ifugao
Hingyon
“
Lagawe
“
Kiangan
“
Hungduan
“
Tinoc
“
Asipulo
“
Mayoyao Branch
Mayoyao
Ifugao
Alfonso Lista Branch
Alfonso Lista
Ifugao
Aguinaldo
“
Solano Branch
Lamut
Ifugao
Solano
Nueva Vizcaya
Quezon
“
Villa Berde
“
Diadi
“
Bagabag
“
Bayombong
“
Bambang Branch
Kasibu
Nueva Vizcaya
Bambang
“
Dupax Norte
“
Dupax Sur
“
Aritao Branch
Aritao
“
Sta. Fe
“
Kayapa
“
Santiago Branch
Santiago city
Santiago City
Ramon
Isabela
Cordon
“
San Mateo
“
Maddela Branch
Maddela
Quirino
Nagtipunan
“
Aglipay
“
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
23
Diffun Branch
Diffun
Quirino
Cabarruguis
“
Saguday
“
Dibibi
“
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
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EXHIBIT 2
Types of Loan and its Policies
A. TYPES OF LOANS
1. Productive Loans
a. Agricultural loan
This is given out purely for agri-based projects.
b. Commercial loan
This loan is intended for business purposes.
d. Market vendor assistance
This loan is intended to market vendors only.
program
2. Providential Loans
a. Educational loan
b. Hospitalization loan
c. Small housing loan
This loan is provided for small house repairs or
to augment the capital of a member-borrower to
build a house.
c. Emergency loan
B. TERMS OF LOANS
MONTHS
1. Agricultural loan
4
2. Commercial loan
12
3. Small housing loan
12
4. MVAP
3
5. Providential loan
2
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C. MAXIMUM AMOUNT TO BE LOANED
The actual amount a member wishes to borrow is dependent upon his actual need.
However, for purposes of equalizing and rationalizing the lending policies, a member can
barrow under the following limitations.
1. Productive Loans
a. A member can barrow an amount equal to his share capital or even lower.
In cases like this, the member-borrower needs not to have collateral except
to have at least one witness and the approval of the manager.
b. A member may borrow the capacity of 3 times of his share capital.
However, the cooperative may require collateral if the amount to borrow
will exceed to P5,000.
2. Providential Loans
On the first application of loan, the amount to be borrowed under this type of loan
is from a minimum of P100 to a maximum of P5,000 wherein collateral is not
required.
D. INTEREST RATE FOR EACH TYPE OF LOANS
TYPE OF LOAN
INT.
SERVICE
LRF
1. Agriculture
12%
2%
1%
2. Commercial
15%
4%
1%
3. Small Housing
18%
4%
1%
4. MVAP
19%
4%
1%
5. Providential
2%
1%
1%
Add-on charges - 2% penalty is charged for amortization or installment not paid on time.
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26
E. QUALIFICATIONS IN BORROWING
Who may avail of loans:
1. A member who have at least paid his minimum financial obligation and have
undertaken one pre-membership seminar.
2. A member in good standing in paying loans and follows and observes rules,
policies, and practice of the cooperative.
3. A member of good moral character.
4. A member who has a permanent residence in the province of its area of operation.
5. A member who have no civil or criminal case filed against him.
F. REQUIREMENTS ON LOAN APPLICATION
1. Purpose of the loan
2. Availability of funds
3. Completion of application forms
4. Submission of required documents to support such loans
5. Inspection report of loan officer and other staff concerning borrower and actual
loan need and status of collateral offered and project undertaken
6. Endorsement of manager
7. Signature of at least two co-members
8. Marital consent for married members
9. Approval of approving officers
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EXHIBIT 3
Fees at Banaue Mountain Resort
1. ENTRANCE AND POOL FEES
CLASSIFICATION
ENTRANCE FEE
POOL FEE
Children
15
15
Adult
25
25
2. COTTAGE FEES
KIND
RENTAL FEE
Round
100
Double long
150
Triple long
180
3. CONFERENCE HALL FEES
TYPE
RENTAL FEE PER 24 HRS
Mini-conference
500
Conference
1,500
4. HOTEL FEES
STANDARD ROOM
OVERNIGHT FEES
Single bed
350
Double bed
400
Triple bed
450
AIRCONDITION ROOMS
500
A Case Study of the TAM-AN Multipurpo se Cooperative / Daisy T. Kimmayong. 2006
EXHIBIT 4
Functions of Management Staff
POSITION
ORGANIZATIO
JOB SPECIFICATION SCOPE OF
FUNCTIONS AND DUTIES
NAL
RESPONSIBILITY
RELATIONSHIP
1. Branch Manager
Reports to:
-Graduate of four-year As a key employee and
-Supervises the operational activities of
Gen. Mgr.
course
representative of the Gen. the branch through maintaining
Supervises:
manager in the area,
protective measures against
Bookkeeper
- Working knowledge
he/she shall see to it that malpractices and other acts of
Cashier
with coop operational
the problems in the
employees in the branch.
Senior Center
policies and procedures branch are well attended. - Supervises the activities of his
Mgr.
H/she shall conduct the
subordinates in conformity with the
- At least 2 years
operations of the branch generally accepted coop policies and
experience in a
in accordance with the
procedures
supervisory work
coop’s existing policies, - Recommends policies and procedures
procedures & practices. to improve the financial and operational
- Possesses leadership
activities of the branch.
potentials to work
- Assist the general manager by
harmoniously with
implementing coop policies and
other people
procedures correctly.
-Regularly reports to the general
manager and the BOD on the results of
operations of the branch under him/her.
-Assist in the preparation of annual
budget.
-Performs other duties as maybe
assigned from time to time.
2. Admin. And
Reports to: Gen.
-commerce graduate
Responsible in the
- Develops procedures to be used in
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29
Finance Dept. Head Mgr.
major in Accounting,
development and
establishing and maintaining an accurate
preferably a CPA
maintenance of an
and systematic accounting of financial
-two years progressive effective accounting
transactions.
responsible experience system as well as the
that must have
preparation of financial
-Prepares monthly consolidated
provided familiarity w/ reports for the general
financial statement and other statistical
mgt. principles,
manager and the board of reports required by various users and
methods and
directors.
advises the GM on the financial status
techniques.
of the coop.
- A working knowledge - Responsible for the
- Prepares the coop’s budget for
I finance mgt.,
carrying out of programs, planning and programming and prepares
accounting and
plans, and policies as
supporting justifications and
bookkeeping.
prescribed by the
explanations for such budget proposals
-possesses leadership
cooperative
-Monitors the monthly disbursements of
potential to work
the coop in accordance w/ the approve
harmoniously with
budget.
other people
- Plans and prepares programs for
personnel administration and
management which normally includes
recruitment, training, classifications,
administration, and personnel record
keeping.
- Advise employees on personnel
policies, practices and problems.
-recommends techniques and procedures
for making appraisals and evaluation of
work performance.
-Supervises the preparation of actions
on appointments, leaves, transfers,
resignations, retirement, separation,
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30
promotion, salary adjustments and other
personnel benefits and services.
-Performs other duties and functions as
maybe assigned from time to time
3.Center Manager
Reports to:
- College level
- The center manager is
- Helps in the identification of target
Senior Center
- Ability to work with
one of the most visible
groups.
Manager
figures
employees of the
- Validates applicants’ credit
- Competent in
cooperative and his
information sheet and collateral/existing
handling collection of
understanding of the
business and prepares corresponding
Loans Receivable.
cooperative’s program
report thereof.
- Ability to provide for will be transmitted to the - Makes collections on the basis of
fidelity bond required
members along his route schedules prepared by the senior center
by the coop.
according to his
manager and issues corresponding
- Ability to ride a
knowledge of the
receipts for payments received.
motorcycle (if this is
program. His actions and - Summarizes collection and submits the
applicable)
attitude will be
summary and cash to the Cashier upon
interpreted as
returning to the office.
representing the
- Personally follow-up collection of
cooperative. It is
delinquent members.
important therefore that
- Reports change of address of members
the center manager be
to senior center manager.
knowledgeable,
- Other official duties as maybe assigned
courteous and
to him/her from time to time.
responsible to the
members.
- As collector, he/she is
responsible for the
collection of amount due
from members and the
follow up of delinquent
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31
accounts.
4. Teller
Reports to :
- College level
- Responsible and
- Receives payments and issues
Cashier
-Ability to operate accountable for the
corresponding receipts
office machines.
payments received in the - Prepares daily collection report
- Ability to put bond as form of cash and/ or
- Remits daily collection to cashier.
required by the coop.
check.
- Performs other functions and duties as
- Ability to meet the
may be assigned from time to time.
public in a courteous
and cheerful manner.
-Honest and
trustworthy.
5. Branch
Reports to :
- BS Accountancy or Responsible for the
- Maintain accounting records in clear
Bookkeeper
Branch Manager
BSC Major in
maintenance of
and concise form, making it available as
Supervises;
Accounting graduate.
accounting records and
ready reference for the efficient
Posting Clerks
- At least one (1) year the development of
operation of the coop.
experience in
financial reports and
- Check all requests for payments and
bookkeeping works.
analysis that are required prepares the corresponding vouchers
-Ability to work
by the coop and other
ensuring that all pertinent documents are
accurately with figures. parties.
attached.
-Ability to operate
- Chronologically arranges and files all
office equipments.
invoices and vouchers for convenient
-With basic knowledge
reference and support of accounting
in coop accounting.
records.
- Enter all financial transactions to the
correct register.
- Prepares journal voucher, posts to and
maintain general journal register.
- Post all entries form the different
register to the general ledgers.
- Prepares monthly trial balance and
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32
financial statements.
- Prepares monthly bank reconciliation.
- Prepares schedules of accounts
receivables, office properties and
equipments and accounts payables.
- Makes schedule for the preparation of
payroll and other coop obligations as
they fall due.
- Performs other duties as maybe
required from time to time.
6. Senior Center
Reports to:
- Graduate of any four - Responsible in the
- Supervises center managers in the
Manager
Branch Manager
(4) year course
implementation and
identification of target groups.
Supervises:
- At least two (2) years promotion of the lending - Assist the Education Committee in the
Center Manager
experience in related programs of the
developing and implementation of
job.
cooperative.
training programs.
- Adequate knowledge
- Checks and verifies all recommended
of the cooperative’s
loan application.
loan and collection
- Prepares the request for payment of all
procedures and
approved loan applications.
policies.
- Maintains a schedule of loan
- Possesses leadership
collection.
potentials to work
- Prepares reports and analysis of loans
harmoniously with
receivable status.
different groups of
- Recommends strategies on loan
people.
collection.
- Must have the ability
- Coordinates with other groups of
to speak/write effective
people to promote goodwill of the coop
English and in the
and ensure greater participation and
dialect used in the area.
involvement of members in coop affairs.
- Performs other duties and functions as
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33
may be assigned from time to time.
7. Branch Cashier
Reports to :
- Commerce graduate - Responsible for the
- Receives payments and issues
Branch Manager
preferably with
receipt and accounting of corresponding receipts.
Supervises:
experience in cash all accounting receipts,
- Checks, verify, and reconcile the daily
Tellers, Sales
handling.
deposits of funds and
cash collection reports of collectors,
Clerks,
- Ability to operate reconciliation of the
sales clerks and information clerks.
Information
office machines.
coop’s cash account.
- Prepares daily reports of collections
Clerks
- Ability to provide
and disbursements.
fidelity bond as
- Prepares daily cash position reports.
required by the coop.
- Reconciles daily with the bookkeeper
- Ability to meet the
and prepares bank deposits.
public in a courteous
- Maintains control of the petty cash
and cheerful manner.
fund.
-Honest and
- Performs other duties as maybe
trustworthy.
assigned from time to time.
8. Business
Reports to:
- Graduate of any four - Responsible in the
- Supervises the implementation of
Operations
General Manager year course.
implementation of
lending programs and ensure the strict
Department Head
- At least three (3) lending programs such as adherence to all credit policies and
years responsible
the Poverty Eradication
regulations.
experience in
Program and Market
- Designs and supervises the conduct of
cooperative lending
Vendors Assistance
trainings.
programs and
Program as well as the
- Recommends to the General Manager
marketing strategies.
development and
prospective business expansion
- A working knowledge implementation of fund
programs after the conduct of a
in financial generation programs.
thorough survey, environmental
management.
scanning and profiling.
- Possesses leadership
- Review, evaluate and recommend
potential to work
approval of loans.
harmoniously with
- Conduct regular group and center
other people.
assessment and evaluation so as to
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34
provide the required intervention
strategies and appropriate
recommendations.
- Supervises the preparation of
monitoring reports such as the weekly
cash position reports and weekly fund
generation and disposal report.
- Performs other duties as maybe
assigned from time to time.
9. Internal Auditor
Report to :
-An Accounting
- The Internal Auditor, as - Reviews and evaluates the soundness,
General Manager graduate preferably a a member of the
adequacy and application of accounting
CPA.
management staff is
and other operating controls and makes
-Has thorough
responsible in providing reports and recommendations for
knowledge in general the necessary information deficiencies found.
and coop accounting and data on financial
- Assists management in financial
including financial
operations, trends and
forecasting and long range planning
accounting or
controls that will guide
affecting financial operations.
management, budget management in setting-
- Analyzes revenue and expense
planning and internal up objectives and
accounts and informs management on
controls.
managerial decisions.
significant changes and deviations from
- Must have at least -
operational budgets and standards based
three (3) years
on the consolidated report.
experience in
- Ascertains that the financial
accounting and two (2)
transactions are properly documented
years in auditing works
and in accordance with established
- Ability to evaluate
policies and that cash are properly
and design effective
handled, remitted, deposited and
internal controls.
recorded.
- Able to analyze
- Recommends management policies
performance indicators,
and procedures relative to an effective
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35
trends and ratios.
internal control on safeguarding of the
coop’s assets.
- Evolves a program on audit system.
-Performs other duties as maybe
assigned from time to time.
10. Executive
Reports to :
- BSSA Graduate or - This is a sensitive and
- The secretary schedules and takes
Secretary
General Manager any related four-year key position in the
notes of all official functions of the
course.
cooperative because the
General Manager within a day, a week
- Proficient in English secretary often represents or a month as the case maybe. He/she
either written or oral.
the cooperative to other
prepares draft of reports on activities for
- Ability to keep people when performing the GM’s review.
confidential
his/her functions.
- As directed, prepares notices of
information and works.
meetings, takes down minutes and
- Ability to efficiently
maintains file of all policies, minutes
produce neat and
and resolutions.
correct works.
- Receives, routes and files
correspondence, reports and documents.
- Screens and attends to visitors, makes
appointments and refers visitors to
proper parties and provides them with
needed information.
- Performs other duties and
responsibilities as maybe assigned from
time to time.
11. Driver
Reports to :
- High school graduate Is responsible for the
- Check the vehicle to be sure that it is
General Manager or vocational course driving and care of
adequately supplied with gasoline, oil,
graduate.
vehicles of the
water and air pressure before a trip.
- Five (5) years cooperative. He is to
- Keeps vehicle washed, cleaned and
experience in driving maintain the vehicle in
tidy.
and maintaining
good operating condition. - Fills up daily trip tickets and reports
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36
vehicles.
accidents and other irregularities during
- With professional
trips.
driver’s license.
- Makes minor repairs and tune-ups.
- Ability to do minor
- Sees to it that vehicle is subjected to
vehicle tune-ups and
routine check-ups and that the
repair works.
maintenance schedule is followed.
- Of good moral
- Performs other duties as maybe
character.
assigned from time to time.
12. Posting Clerk
Reports to:
- BSC graduate
- Responsible in
- Maintains members’ subsidiary
Bookkeeper
- Ability to operate maintaining neat and
ledgers.
office machines and accurate members’
- Post all receipts and disbursements of
maintains neat and subsidiary ledgers.
members’ loans of whatever kind.
accurate works.
- Conducts daily reconciliation of
- Ability to analyze
subsidiary ledgers with the cashier’s
records and able to
records.
work accurately with
- Conducts monthly reconciliation of
figures.
subsidiary ledgers to bookkeeper’s
- At least one (1) year
records.
experience in
- Prepares aging of loans receivable.
accounting works.
- Performs other duties as maybe
assigned from time to time.
A Case Study of the TAM-AN Multipurpose Cooperative / Daisy T. Kimmayong. 2006
Document Outline
- A Case Study of the TAM-ANMultipurpose Cooperative
- BIBLIOGRAPHY
- ABSTRACT
- TABLE OF CONTENTS
- INTRODUCTION
- Rationale of the Study
- Objectives of the Study
- Importance of the Study
- Scope and Limitation of the Study
- METHODOLOGY
- Locale and Time of the Study
- Data Gathering
- Data Gathered
- Data Analysis
- RESULTS AND DISCUSSION
- SUMMARY, CONCLUSIONS AND RECOMMENDATIONS