credit cooperative coop_mgt (1)

8/2/2019 Credit Cooperative Coop_mgt (1)

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ST. PAUL UNIVERSITY DUMAGUETE

AR-ETZ CREDIT COOPERATIVE

AMENDED ARTICLES AND BY-LAWSANDECONOMIC SURVEY

A PARTIAL FULFILLMENTIN

BUSINESS COOPERATIVE

SUBMITTED TO:MRS. CABALLEDA

SUBMITTED BY:

Bajamunde, Charlene G.

Burdeos, Kim T.Catubig, Vivien Leigh L.

Duran, Francis Ian

Duran, Peter Paul Lorenz

Lumhod, Tezza Mae V.

Nemencio, Adrian A.

Palacio, Norie Mae T.

Peral, Pretty Prell

Saguindel, Allyn JaneTorres, Maria Cristy


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AR-ETZ CREDIT COOPERATIVEAmended By-Laws

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned, who are citizens and residents of the Philippines,representing a majority of the members of the Ar-etz Credit Cooperative of St.Paul University Dumaguete, a primary credit cooperative, hereinafter referredto as Cooperative, do hereby adopt the following By-Laws.

Article I

OBJECTIVES AND PURPOSESThe objectives and purposes for which this Cooperative is formed are:

1. To encourage thrift and savings mobilization among the members;2. To create funds and grant loans to members for productive andprovidential purposes;3. To provide related services to enable members to maximize the benefits

from such loans;4. To promote the cooperative as a way of life for improving the social and

economic well-being of the people;5. To do any related activity for the members' self government, improve

social and/or economic well-being under a truly just democratic society;6. To work with the cooperative movement, non-government and

government organizations/entities in the promotion and development ofcooperatives and in carrying out government policies; and

7. To undertake other activities for the effective and efficientimplementation of the provisions of the Cooperative Code.

In the furtherance of and not in limitation of the general powers conferred bythe laws of the Philippines and the objectives and purposes set forth, thisCooperative shall have the following powers:1. To draw, make, accept, endorse, guarantee, execute and issue

promissory notes, mortgages, bills of exchange, drafts, warrants,

certificates and all kinds of obligations and instruments in connectionwith and in furtherance of its business operations;

2. To issue bonds, debentures and other obligations of the Cooperativeto contract indebtedness and to secure the same with a mortgage ordeed of trust, or pledge of lien on any or all of the real and personalproperties of the Cooperative;


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3. To acquire facilities, either by or through construction, purchase, lease,bequest or donation.

Article II

MEMBERSHIPSection 1. Scope of Membership. Membership of this Cooperative

shall consistof regular and associate members.

1.1 Regular Members are the following:

Teaching and non-teaching personnel of SPUD who havefull-time and permanent employment status;

Teaching and non-teaching personnel of SPUD who havepart-time and non-permanent employment status;

Contractual employees High school and college SPUD students aging 18 years old

and above

1.2 Associate Members are the following:

Immediate members of the family of Regular Members;

Permanent employees of agencies working at SPUD;

Teaching and non-teaching personnel who have retiredfrom SPUD; and

Benefactors who wish to deposit their funds with the

Cooperative.Section 2. Application for Membership. Application formembership shall be acted upon by the

Board of Directors.

2.1 The application for membership shall be in writing using aprescribed Application Form. The duly accomplished ApplicationForm shall be accompanied by a Membership Fee in the amountset by the Board of Directors and the required Certifications.

2.2 An applicant rejected by the Board of Directors mayappeal his/her case to the General Assembly by giving noticeto the Board Secretary 30 days before the General AssemblyMeeting.

2.3 The applicant shall undergo a Pre-Membership Education

Seminar (PMES).


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Section 3. Rights of Members. Members are entitled to specificrights according to their status of membership.

3.1 Regular Members can exercise the following rights:

Participate in the deliberation during membership meetings

(Regular and Special General Assembly Meetings). Vote during election of officers and on all matters brought

before such meetings.

Seek any elective position, subject to the provisions of theseBy-Laws.

Avail of the services of the Cooperative intended for thetype of membership upon compliance with the conditionsand requirements thereof.

Inspect and examine the books of accounts, the minutes ofmeetings, the share register, and other records of theCooperative during office hours.

3.2 Except for voting and election privileges, Associate and

Honorary Members are entitled to the same rights as thosegranted to Regular Members.

Section 4. Duties of Members. Every member shall have followingduties.

4.1 Promote the vision, mission, and goals of a Ar-etz CreditCooperative and the Cooperative movement as a whole.

4.2 Subscribe to at least 10 shares at P10.00 per share as his/hermonthly contribution to the capital build up of the Cooperative.

4.3 Obey the rules and regulations of the Cooperative as providedfor in RA 6938 and in these By-Laws as well as abide by thepolicies and decisions of the General Assembly and the resolutionsof the Board of Directors and those of the CooperativeDevelopment Authority (CDA).

4.4 Patronize and participate regularly in the business andinitiatives of the Cooperative.

4.5 Attend Membership Meetings, i.e. last Sunday of February forGeneral Assembly Regular Meeting and second Sunday of Octoberfor General Assembly Special Meeting or as called upon.

Section 5. Liability of Members. The liability of a member shall be

limited to his/her accountability to the Cooperative equivalent tohis/her monthly premium for membership, payment ofamortization for loans granted and pro-rata share of mortuary aid.No member shall be liable for any indebtedness to the


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Cooperative beyond his/her subscribed shares and his/her loanand membership obligations.

Section 6. Termination of Membership. Membership in theCooperative may be terminated either by withdrawal or expulsion.

6.1 Any member desiring to terminate his/her membership bywithdrawal through resignation or retirement from USC or simplynot wanting to be a member shall apply in writing using aprescribed Membership Withdrawal Form. No member shall beallowed to withdraw his/her membership until all accounts aresettled.

6.2 Membership may be terminated by a vote of the majority of the

members of the Board of Directors for any of the following causes:

When a member has not patronized the services of the

Cooperative for an unreasonable period of time as may befixed by the Board of Directors;

When a member has continuously failed to comply with therules and obligations provided in these By-Laws; and

For any act or omission injurious or prejudicial to theinterest or the welfare of the Cooperative.

6.3 A member whose membership the Board of Directors may wish

to terminate shall be informed of such intended action in writingand shall be given an opportunity to be heard. The decision of theBoard shall be in writing and shall be communicated in person

or through registered mail to the member and shall beappealable, within 30 days after the decision is promulgated, tothe General Assembly whose decision therein, whether in aGeneral or Special Meeting, shall be final. Pending a decision bythe General Assembly, the membership remains in force.

6.4 Appraisal and payment of members interest shall be made

upon termination of membership. The Board of Directors shalldetermine the book value of the members share capital, in nocase to exceed the par value, as established at the year-endaudited financial statement nearest to the date of termination

and shall fix the amount thereof in money to be paid subject tothe availability of funds. Within one year after such termination,or at the option of an expelled or withdrawing member or theheir or his/her legal representative, he/she may, in lieu of cash,be issued a revolving fund certificate or other evidences ofindebtedness. Provided, however, that payment of said equity incash shall not be made if on account of such payment the valueof the Cooperatives assets would be less than the aggregate


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amount of its debts and liabilities exclusive of share capitalsubscribed, or would diminish the reserves required underexisting laws.

Article III

GOVERNMENTSection 1. Membership Control. Subject to the provisions of R.A.

6938, and regulations issued therein, the final authority in themanagement and administration of the affairs of Ar-etz Credit

Cooperative is vested in the General Assembly.Section 2. The General Assembly. The General Assembly of the

Cooperative shall be the highest policy-making body of theCooperative. It is the final arbiter and judge on all disputesbrought before it. It shall be composed of Regular, Associate andHonorary Members.

2.1 The General Assembly represented by the Regular Members in

good standing (MIGS) can exercise the following powers:

Elect and remove directors, officers and committee

members for cause; Hear and deliberate the reports of the Board of Directors,

Officers and Committees;

Take final decisions regarding any change in financialpolicies, subject to legal restrictions;

Determine the amendments in the Articles of Cooperationand/or these By-Laws;

Exercise final authority on all matters vitally affectingthe Cooperative;

Initiate and approve developmental plans of the

Cooperative; and Exercise all powers expressly provided by law and these By-

Laws.

2.2 The Annual General Assembly Meeting (or MembershipMeeting) of Ar-etz Credit Cooperative shall be held on the lastSunday of February of every year at any place within its area ofoperation and at such time the Board of Directors may designate.


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2.3 Special General Assembly Meetings may be called at any time

by a majority vote of the Board of Directors to consider urgentmatters requiring immediate membership decision. Such meetingsmay be called by the Board of Directors within 30 days from

receipt of a written request from: (a) at least 10 per centumof the total number of Regular Members in good standing; (b)the Audit and Inventory Committee; (c) the Federation or Unionof which the Cooperative is a member; (d) the CooperativeDevelopment Authority. One of these Special General AssemblyMeetings coincides with the Cooperative Month celebration.

2.4 A written notice of all General Assembly Meetings shall be

served by the Board Secretary through a designated staff oragency to each member at his/her work station at least 2 weeksprior to such meetings. A Notice of Meeting shall be accompanied

by the Agenda.2.5 As far as practicable, the AGENDA which is the order of business

at each Annual General Assembly Meeting shall be as follows:

Roll Call;

Proof of Due Notice;

Consideration of the Minutes of the last General AssemblyMeeting;

Consideration of the consolidated reports of the Board ofDirectors, Manager, Secretary, Treasurer and Committeesincluding audited statements of financial condition and

operation; Unfinished Business;

Election of Board of Directors and Committees; and

New Business.

2.6 At the Annual or Special General Assembly Meeting, 25 percentof the total number of Regular Members in good standing shallconstitute a quorum.

Section 3. Fiscal Year. The fiscal year of this Cooperative shall

commence on the first day of January and end on the last day ofDecember.Section 4. Election. Election of the Board of Directors and the

Committees (Credit, Audit and Inventory, and Election) is doneduring every Annual General Assembly Meeting.


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4.1 Members entitled to vote are the Regular Members in goodstanding. No member qualified to vote shall be entitled to morethan one vote regardless of the share capital owned. No proxyvoting shall be allowed.

4.2 Election shall be governed by definite guidelines prepared by theElection Committee and approved by the Board of Directors.4.3 Election shall be by secret balloting.

Section 5. Board of Directors. The business of the Cooperative shall

be administered by the Board of Directors (BOD) of five members.

5.1 Term of Office. The Board of Directors shall hold office for a termof 2 years unless earlier removed for cause, or have resigned orbecome incapacitated due to illness or death, provided, that during

the election at the first Annual General Assembly after registration,one-half plus one of the directors obtaining the highest number ofvotes shall serve for two years, and the remaining directors for oneyear and until their successors have been elected and inducted.No director shall serve for more than three consecutive terms.

5.2 Qualifications and Disqualifications of Directors. All members

entitled to vote, who are in good standing, have the time and thewillingness to serve, are qualified to be voted as directors, exceptthose who are under any of the following circumstances whichdisqualify them to be voted upon to the position of director or to

continue as such: Holding any elective position in the government, except that

of barangay official;

Having conflicting interest with the business of theCooperative;

Having been absent for three consecutive Board Meetingswithout being excused;

Being full-time employees of the Cooperative;

Having been convicted of any crime involving moralturpitude, gross negligence, or gross misconduct in theperformance of their duties or found culpable in anyadministrative case involving such offenses;

Facing an administrative proceeding or civic/criminal suitsinvolving financial and/or property accountability asrespondent or defendant;

Having been disqualified pursuant to disqualificationsprescribed by law.


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5.3 Meetings. Regular and Special Meetings are to be held by theBoard of Directors (BOD). Notice of Regular and Special Meetingsspecifying the Agenda shall be served by the Secretary at least fivedays before the schedule. One-half plus one of the totalnumber of Directors in the Board shall constitute a quorum. A

majority of the quorum duly assembled in a meeting shall be avalid cooperative act.

5.3.1 Organizational Meeting. A meeting of all elected officers(Board of Directors and Committees) and appointed officers(Secretary and Treasurer) shall be held within 10 days afterthe Annual General Assembly Meeting when election wasdone. It is during this meeting that the Board of Directorselects by secret ballot from among them a Chair and a ViceChair. The Committees shall also elect their respectiveChair, Vice Chair and Secretary. No two or more persons

with relationships up to the third civil degree ofconsanguinity or affinity shall serve as elective orappointive officers in the same Board.

5.3.2 Monthly BOD Meeting. The Board of Directors shall meet

at least once a month. The appointed Secretary, Treasurerand Office Manager should be present in every BODMeeting.

5.3.3 BOD Special Meetings. The Board of Directors may convene

for Special Meetings as agreed upon by the BOD

themselves or at the request of the majority.

5.4 Powers and Duties of the Board. The Board of Directors, as abody, has general supervision and control of the affairs of theCooperative. The Board shall prescribe policies consistent withlaw, these By-Laws and the resolutions of the General Assemblyfor the management of its business and the guidance of itsofficers, members and employees. The Board acts on behalf ofthe General Assembly to ensure that the Cooperative achieve itsvision, mission and goals. There are seven roles the Board playswhen acting on behalf of the Membership:

5.4.1 assuring that the financial needs of members is being met

by the Cooperative;5.4.2 assuring that the financial interest of members, as

owners andshareholders, are protected;

5.4.3 making decisions on behalf of the members betweenAnnual and Special Meetings;


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5.4.4 keeping the members informed about the Boardsstewardship;

5.4.5 expanding the membership base;5.4.6 dealing with membership and withdrawal applications;

and

5.4.7 planning and approving budgets for membereducationprograms and special projects.

5.5 Duties of the Chair and the Vice Chair. The job of the Chair is

to see to it that policies or actions of the General Assembly andthe Board are transmitted to management and implementedproperly. The Chair ensures that BOD does its job timely andproperly, always in the interest of the general welfare of theCooperative. The Vice Chair takes the place of the Chair inhis/her absence; provided, however that in the case of

death, resignation or removal of the Chair, the Board ofDirectors may decide to elect his/her successor.

The Chair shall:

preside over all meetings of the General Assembly and ofthe Board of Directors;

perform any and all acts and duties usually performed by apresiding officer;

sign all share certificates, revolving fund certificates,contracts, vouchers, bonds, and such other papers of theCooperative which the Board may authorize or direct

him/her to sign; represent the Cooperative in conferences, meetings or

gatherings related to the cooperative movement; and

perform such other duties as the Board of Directors mayprescribe.

5.6 Duties of the Secretary and the Treasurer. The Secretary and

the Treasurer who are not members of BOD are appointed by theBoard of Directors. The appointed officers shall hold office for aterm of one year or until the election, qualification and assumptioninto office of their successors. No two or more persons withrelationships up to the third civil degree of consanguinity or affinityshall serve as appointed officers.

The Secretary shall:

keep a complete list of all the members and their profile;

maintain an accurate record of all meetings of the Boardof Directors and the General Assembly;


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give notice of all meetings called;

prepare the Minutes of all meetings of the Cooperative;

turn over to his/her successor all records belonging tothe Cooperative in his/her possession; and

perform the duties of the Treasurer in case of the latters

absence or inability to perform his/her duties.

The Treasurer shall:

take custody of all monies, securities and financialpapers of the Cooperative;

keep complete records of the Cooperatives cashtransactions for the establishment of proof of his/hercash position at any given time and date;

pay upon the recommendation of the Manager or asauthorized by the Board of Directors, all moneytransactions and certify to the correctness of thecash position of the Cooperative in all financialstatements and reports submitted to the Board ofDirectors, the General Assembly and the CooperativeDevelopment Authority;

turn over all monies, securities, papers, books andother properties belonging to the Cooperative thathe/she may have in his/her possession upon theappointment and assumption into office of his/hersuccessor;

post an adequate bond to assure the faithful

performance of his/her duties; and perform the duties of the Secretary in the latters

absence or inability to perform his/her duties.Section 6. Credit Committee. The Credit Committee (CreCom) shall be

composed of three members elected by the General Assembly fora term of one year or until their qualified successors are electedand inducted. In no case shall a member of CreCom serve as amember of the Board of Directors at the same time and vice-versa. The qualifications and disqualifications provided for BODshall apply for CreCom. The Committee shall be responsible for

the credit management of the Cooperative. In the performance ofits functions, it shall process, evaluate and act upon loanapplications, except when the applicant is a member of theCommittee; in which case, the application shall be acted upon bythe Board of Directors. The Committee shall also exercise generalsupervision of loan services, including collection. It shall submit aPerformance Report for the General Assembly Meeting and aQuarterly Report to the BOD.


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Section 7. Audit and Inventory Committee. The Audit and Inventory

Committee (AICom) shall be composed of three members electedby the General Assembly for a term of one year or until theirqualified successors are elected and inducted. In no case shall a

member of AICom serve as a member of the Board of Directorsand vice-versa. The qualifications and disqualifications providedfor BOD shall apply for AICom. The Committee shall provideinternal audit service, maintain a complete record of itsexamination and inventory. It shall submit a Performance Reportfor the General Assembly Meeting and a Quarterly Report to theBOD.

Section 8. Election Committee. The Election Committee (EleCom)

shall be composed of three members elected by the GeneralAssembly for a term of one year or until their qualified

successors are elected and inducted. In no case shall a memberof EleCom serve as a member of the Board of Directors at thesame time and vice-versa. The qualifications and disqualificationsprovided for BOD shall apply for EleCom. The Committee shallpromulgate rules and regulations in the conduct of election,canvass, certify in writing the returns to the Presiding Officer. Itshall submit to the BOD the Election Results and proclaim thewinning candidates during the Organizational Meeting. Electionprotests filed by the members of the Election Committee shall bedecided by the Board of Directors. The decision of the ElectionCommittee or the Board of Directors may be appealed to the

CDA within 15 days from notice for decision by itself or ifeither of the parties so desire, by an Arbitration Committee ofthree persons one of whom shall come from CDA and the two tobe nominated by each of the parties concerned.

Section 9. Education Committee. The Education Committee (EdCom)

shall be composed of such number as may be determined by theBoard. The EdCom is appointed by the Board for a term ofone year, without prejudice to their reappointment. The ViceChair of the Board shall serve as ex-officio Chair of theCommittee. The Committee shall be responsible for planning and

implementing educational and promotional activities of theCooperative. It shall submit its Annual Plan specifying theactivities with budgetary allocation to BOD for approval.

Section 10. Community Extension Committee. The Community

Extension Committee (CECom) shall be composed of suchnumber as may be determined by the Board. The CECom isappointed by the Board for a term of one year, without prejudice


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to their reappointment. A designated member of the Board shallserve as ex-officio Chair of the Committee. The Committee shallbe responsible for planning and implementing outreach projectsfor the pursuit of the social responsibility functions of theCooperative. It shall submit its Annual Plan specifying the

activities with budgetary allocation to BOD for approval.Section 11. Ad Hoc Committees. Other Committees on a temporary

capacity may be created by the Board. Their functions shall bedefined by BOD as the business and operations of theCooperative may require. Said Committees shall assist theBoard of Directors in the implementation of the developmentinitiatives of the Cooperative.

Section 12. Liabilities of Directors, Officers and Committee

Members. Directors, Officers and Committee Members, who

willfully and knowingly vote for or assent to patently unlawfulacts or who are guilty of gross negligence or bad faith in directingthe affairs of the Cooperative or acquire any personal orpecuniary interest in conflict with their duties as Directors,Officers or Committee Members, shall be liable jointly andseverally to the Cooperative for all damages or profits resultingthere from.

When a Director, Officer or Committee Member attempts toacquire or acquires, in violation of his duty, any interest or equityadverse to the Cooperative in respect to any matter which has

been reposed in him/her in confidence, he/she shall, as a trusteefor the Cooperative, be liable for damages and for double theprofits which otherwise would have accrued to the Cooperative.

Section 13. Vacancies. When a vacancy in the Board occurs by reason

of death, incapacity, removal or resignation, the remainingmembers of the Board constituting a quorum shall fill the vacancyby designating the candidate who obtained the next highestnumber of votes during the last election.

Likewise, any vacancy in the elective committees shall be filled by

the candidate who obtained the next highest number of votesduring the last election.

Section 14. Removal of Directors, Officers and Committee

Members. Any elected Director or Committee Member may beremoved from office by a vote of two-thirds of the memberspresent who are entitled to vote and constituting a quorum atthe Annual or Special General Assembly Meeting called for the


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purpose after having been given the opportunity to be heard atthe said Assembly.

Any officer elected by the General Assembly or anyone

appointed by the Board of Directors may be removed from office

for cause by a majority vote of the regular membership in goodstanding or the Board as the case may be.Section 15. Compensation. The Board of Directors and the

Committees are entitled to an honorarium for actual attendancein Board and Committee meetings, and reimbursement of actualand necessary expenses while performing functions in behalf ofthe Cooperative based on the budget approved by the GeneralAssembly.

Section 16. Management Staff. The Management takes charge of the

day-to-day operations of the Cooperative. The Management isheaded by an Office Manager appointed by the Board of Directors.He is assisted by a staff composed of a Credit Officer,bookkeepers, and Office Secretary, who are also appointed byBOD. The BOD monitor the performance of the Management Staff,fix their compensation and tenure in reference to the budgetaryallocation approved by the General Assembly.

16.1 Office Manager. No person shall be appointed to the position

of Office Manager unless he/she possesses the followingqualifications and none of the disqualifications herein below

enumerated: He/She must be familiar with the philosophy, principles and

values of cooperatives.

He/She must be a Commerce graduate, major in Accounting.

He/She must have at least two years experience incooperatives or related business.

He/She must be honest and must have a deep sense ofresponsibility.

He/She must not be engaged directly or indirectly in anybusiness similar to that handled by the Cooperative.

He/She must not have been convicted of any administrativeor criminal case involving moral turpitude, gross negligenceor grave misconduct in the performance of his/her duties.

He/She must not be addicted to any form of gambling orimmoral or vicious habits.

He/She must be willing to undergo pre-service and/or in-service trainings.


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The Office Manager oversees the operations of the Office. Heshall:

have general charge of all the phases of the businessand management operations of the Cooperative;

maintain records of accounts in such manner that the

true and correct condition of the business of theCooperative may be ascertained there from at anytime;

render annual and periodic statements and reports inthe form and manner prescribed by the Board ofDirectors and the Cooperative Development Authority;

preserve the books, documents, correspondence andrecords of whatever kind pertaining to the businesswhich may come into his/her possession;

turn over to his/her successor all monies andproperties belonging to the Cooperative which he/she

has in his/her possession or over which takeresponsibility for the overall performance of theemployees;

employ and dismiss any agent or employee subject tothe policies of the Cooperative;

post an adequate bond to assure the faithfulperformance of his/her duties; and

perform other functions as required by the GeneralAssembly and the Board of Directors.

16.2 Regular Fund Bookkeeper. He/She shall:

record all daily transactions of the Regular Funds in all itsbooks of accounts and ledgers;

take custody of all ledgers for Regular Fund;

enter loan balances and the monthly amortization ofexisting loan on loan forms for Regular Fund before theloans are processed;

post all collections and/or payments in the individual ledgerspertaining to Regular Fund transactions;

prepare the collection lists of amortizations of all loanstaken from the Regular Fund due for submission to Payroll

Clerk on dates required; ensure the preparation of the necessary adjusting entries

and monthly trial balance;

reconcile the balances with Cash in Bank and Cash withBursar;

prepare relevant financial reports as required;


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take responsibility of his/her personal and professionalgrowth;

see to it that all duties as detailed in his/her job descriptionsare efficiently discharged with zeal and concern for theCooperative;

perform other duties required by the Manager and the Boardof Directors.

16.3 Retirement Fund Bookkeeper. He/She shall:

record all daily transactions of the Retirement Funds in allits books of accounts and ledgers;

take custody of all ledgers for Retirement Fund;

post all collections and/or payments in the individual ledgerspertaining to Retirement Fund transactions;

enter loan balances and the monthly amortization ofexisting loan on loan forms for Retirement Fund before theloans are processed by the Manager;

prepare the collection lists of amortizations due of all loanstaken from the Retirement Fund for submission to Ar-etzCredit Cooperative Payroll Clerk on dates required;

ensure the preparation of the necessary adjusting entriesand monthly trial balance;

reconcile balances with Cash in Bank and Cash with Bursar; prepare relevant financial reports as required; take responsibility of his/her personal and professional

growth;

see to it that all duties as detailed in his/her jobdescriptions are efficiently discharged with zeal and concernfor the Cooperative;

prepare the year-end financial statement for submission tothe external auditor;

perform other duties required by the Manager and theBoard of Directors.

16.4 Office Secretary. The Office Secretary shall:

receive all communications and keep a systematic file ofthem;

receive all applications for loan and register the same in thelogbook for numbering;

inform loan applicants of the progress of their loanapplication;

file all loan application forms with approved vouchers,amortization schedule and supporting documents (i.e., bills,receipts, tickets, etc.);


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take charge of the petty cash; prepare the notice of meeting and circulate it for the needed

signatures;

ensure that all minutes and records of meetings are kept infile; receive applications for and withdrawal of membership

for Board action during the prepare the list of newlyaccepted members for submission to the Finance Office forappropriate deductions as endorsed by the Office Manager;

release approved certificates for Retirement Fund;

handles mortuary aid claims;

maintain an updated record of all members and officers ofthe cooperative;

take custody of Purchase Order service;

ensure that all documents/reports for General and SpecialAssembly Meetings as well as for BIR and CDA are preparedbefore schedule dates;


prepare a summary of all loans which will be presented tothe General Assembly;

see to it that all duties as detailed in the his/her jobdescriptions are efficiently discharged with zeal and concernfor the Cooperative;

perform other duties required by the Manager and Board ofDirectors.

16.5 Credit Officer/Office Clerk. He/She shall: assist in the processing of all loan applications and perform

all duties and clerical works related thereto;

prepare loan schedules and vouchers in final form comingfrom the Manager;

update monthly contributions and loan retention to thesubsidiary ledger;

prepare monthly reconciliation on fixed and savingsdeposits;

prepare statements of withholding taxes, SSS premiums andloans, PHIC premiums, Pag-ibig loans, and bring payment tothe agencies concerned;

prepare the monthly payroll of the staff indicating undertime, tardiness and/or absences supported by requireddocuments;

prepare the necessary legal documents as regard to specialloans, i.e. Real Estate Mortgage (REM) for signature of theparties involved and authorized Cooperative officers;


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prepare the computerized statement of monthly payrolldeductions for both Regular and Retirement Funds;

assist in the preparation of statement of annual interestearnings of members;

summarize all quarterly reports for annual reporting to BIR,

SSS, PHIC, etc; assist in the preparation of reports for General Assembly

Meetings.


see to it that other duties as detailed in his/her jobdescriptions are efficiently discharged with zeal and concernfor the Cooperatives;

Perform other duties required by the Manager and the Boardof Directors.

Article IV

CAPITAL STRUCTURESection 1. Sources of Funds. The Cooperative shall derive its fundsfrom:

Share capital;

Deposits;

Capital reserve;

Loan capital;

Subsidies, grants and donations; and Other sources of funds authorized by law.

Section 2. Continuous Capital Build-up. Every member shall

invest in the share capital of the Cooperative;

At least P150.00 of his/her monthly income;

At least 5% of the loan granted him/her; and

The 100% of his/her annual interest on capital andpatronage refund.

Section 3. Deposits. The Cooperative shall receive two kinds ofdeposits:

3.1 Savings Deposits. Any member, in addition to his/her share ofcapital investments, may open a savings deposit, the rate ofinterest of which shall be determined by the Board at thebeginning of each fiscal year which in no case shall exceed the rateprescribed by the Central Bank of the Philippines.


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Savings deposits not falling below P50.00 during any calendarmonth shall be entitled to interest to be computed quarterly basedon the lowest monthly balance outstanding during the period. Theinterest shall be credited to the depositors account, and the same

shall earn interest from the date it is credited, at the same rate assavings deposits.

The Board of Directors shall prescribe the rules and regulationsgoverning withdrawals from the savings deposits.

3.2 Time Deposits. Deposits for a fixed period of time and for a

fixed rate of interest may be accepted by the Cooperative. TheTime Deposit Certificate in the form prescribed by the Board ofDirectors certifying the deposit is issued to depositors.

Section 4. Revolving Capital. The Cooperative may adopt ascheme for generating capital through deferment of the paymentof interest on capital and patronage refund for a fixed period notexceeding ten years each time, and at the rate of interestconsistent with laws and the regulations.

Section 5. Borrowing. The Cooperative, through the Board of

Directors with the approval of the General Assembly, mayborrow money from any source at the best terms and conditionsavailable and in such amount that may be needed.

Section 6. Cooperative Guarantee Fund. At least 1% of the grossincome of the Cooperative shall be set aside to constitute theCooperative Guarantee Fund which shall be a social fund forthe purpose of guaranteeing the realization of the goals of theCooperative, payment of common services and facilities for thebenefit of the members and for investment in othercooperatives.

In the event of the dissolution of the Cooperative, the GuaranteeFund shall not be distributed to the individual members but shallbe donated to the Cooperative Education Training Fund (CETF).

Section 7. Share Capital. The term share shall refer to a unit of

capital, the value of which is Ten Pesos (P10.00). Seriallynumbered Certificates shall be issued to each member upon thefull payment of the subscription, and for subsequent shares asthey are paid for. The Certificate shall contain the shareholdersname, the number of shares owned, the par value duly signed bythe Chair and the Secretary, and bearing the official seal of the


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Cooperative. All issues and transfers shall be registered in thestock and transfer book.

The shares may be purchased, owned or held only by

persons who are eligible for membership. Interest may be

paid only on the paid-up capital at the rate prescribed by CDAand such interest may be in cash, or credited towardspayment of subscriptions, outstanding accounts, or additionalshares or to the revolving fund of the Cooperative.

Section 8. Transfer of Shares. The Cooperative shall have the first

option to buy any share offered for sale. The amount to be paidfor such shares shall be the par value or book value, whichever islower.

If the Cooperative is not in a position or otherwise refuses to

purchase such shares, the member shall have the right to sellthem to any member of the Cooperative.

A member shall not transfer any share held by him/her orinterest in the Cooperative or any part thereof, unless:

he/she has held such shares or interest for at least oneyear;

the transfer is made to a member of the Cooperative uponapproval by BOD.

Transfer of shares shall not be binding to the Cooperative until

such transfer has been registered in its stock and transfer book.No transfer shall be completed until the old Certificates shall havebeen endorsed and surrendered and a new Certificate issued inthe name of the member. A transfer fee of P100.00 shall becharged.In the case of loss or destruction of a Certificate of Stock, anothermay be issued in its place to the owner thereof after executing anaffidavit in triplicate setting forth the following:

circumstances as to how, when and where said Certificatewas lost or destroyed;

the number of shares represented by the Certificate; the serial number of the Certificate; and

the lost or destroyed Certificate has never been transferred,sold or endorsed to any third party and that should thesame be found, the owner shall surrender it to theCooperative.


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Any false representation or statement made in the aforesaidaffidavit shall be a ground for expulsion from the Cooperative.

Article V

LOANSSection 1. Nature and Amount of Loans. Loans may be granted

to members entitled to vote either for providential or productivepurposes. In the determination of the amount of loans tobe granted the applicants character, capacity to pay,collateral or securities offered to insure the payment of the loansshall be considered.

Section 2. Condition on Loans. The Board of Directors shall

prescribe the terms and conditions for the granting of loans, themaximum amount that may be granted a member, the rate ofinterest, fines for payment in default, maximum period ofrepayment and all other factors to facilitate the loaningoperation and safeguard the interest of the members and theborrowers.

In determining the rate of interest, the Board shall be

guided by the overriding principle of service above profit.

Section 3. Renewal of Loans. Regular loans, providential or

productive, may be renewed provided a certain percent thereofhas already been paid. The percentage of payment shall bedetermined by the Board from time to time as changes in thetotal maximum loans allowed to all members occur and as theneed arises.

Section 4. Application for Loans. A loan application shall state

specifically the purpose or purposes for which the money is to beused. Any false representation or statement made in the

application shall be a ground for the cancellation of the loans or ifthe money has been used for a purpose other than those forwhich it was granted, the loan shall at once become due anddemandable.

Section 5. Restrictions on Officers, Directors, and Committee

Members. No Director or Committee Member shall vote on aloan requested by a member of his/her family, natural or by


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affinity to the third degree; or on a loan requested by a personwho owes a debt to him/her or to any member of his/herfamily; neither can he become a co-maker, surety nor endorserfor any loan contracted with the Cooperative. The applicationfor a loan by a member of the Credit Committee shall be subject

to the approval of the Board of Directors.Section 6. Appeal. An appeal from the decision of the Credit

Committee for abuse of discretion or violation of any existingpolicy of the Board of Directors may be made at the jointmeeting of the Board of Directors and the Audit and InventoryCommittee, whose decision on the matter shall be final.

Article VI

ALLOCATION AND DISTRIBUTION OF NET SURPLUSSection 1. At the end of the fiscal year, the Cooperative shall

distribute its net surplus as follows:

1.1 Ten percent (10%) for Reserve Fund

The reserve fund shall be used for the stability of theCooperative and to meet net losses in its operations. TheGeneral Assembly may decrease the amount allocated tothe reserve fund when the reserve fund already exceeds theshare capital. Any sum recovered on items previously

charged to the reserve fund shall be credited to such fund. The reserve fund shall not be utilized for investment, other

than those allowed in the Cooperative Code. Such sum ofthe reserve fund in excess of the share capital may be usedat anytime for any project that would expand the operationsof the Cooperative upon the resolution of the GeneralAssembly.

Upon the dissolution of the Cooperative, the reserve fundshall not be distributed among the members.

The General Assembly may resolve:

To establish usufructuary fund for the benefit of anyfederation or union to which the Cooperative is affiliated;and

To donate, contribute, or otherwise dispose of the amountfor the benefit of the community where the Cooperativeoperates. If the members cannot decide upon the disposal


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of the reserve fund, the same shall go to the federation orunion to which the Cooperative is affiliated.

1.2 Ten percent (10%) for Education and Training Fund

Half of the amounts transferred to the education and

training fund annually under this subscription may be spentby the Cooperative for education and training and otherpurposes; while the other half shall be credited to thecooperative education and training fund of the apexorganization of which the Cooperative is a member.

Upon the dissolution of the Cooperative, the unexpendedbalance of the education and training fund appertaining tothe Cooperative shall be credited to the cooperativeeducation and training fund of the above mentioned apexorganization.

1.3 Ten percent (10%) for Land and Building Fund, CommunityDevelopment, as the need arises.

1.4 The remaining net of 70% surplus shall be made available to the

members in the form of interest on share capital not to exceed thenormal rate of return on investments prescribed by CDA andpatronage refunds.

The sum allocated for patronage refunds shall be made availableat the same rate of all patrons of the Cooperative in proportion totheir individual patronage; provided, that in the case of a member

with paid-up share capital contribution, his/her proportionateamount of patronage refund shall be credited to his/her accountas additional share capital contribution.

Article VII

MISCELLANEOUSSection 1. Investment of Capital. The Cooperative may invest itscapital in any of the

following: In shares or debentures or securities of any other

cooperative;

In any reputable bank in the locality, for anycooperative;

In securities issued or guaranteed by Government;


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In real estate primarily for the use of theCooperative or its members; or

In any other manner approved by the GeneralAssembly.

Section 2. Books of Accounts. The Cooperative shall keep andmaintain adequate books of accounts in accordance withgenerally accepted accounting principles and practicesapplied consistently from year to year subject, however, to theprovisions of R.A. 6938.

Section 3. Audit. At least once a year, the Board of Directors shall in

consultation with the Audit and Inventory Committee cause theaudit of the books of accounts of the Cooperative.

Section 4. Annual Report. The Cooperative shall make an annual

report of its operational activities to its members at theAnnual General Assembly Meeting together with the auditedfinancial statements. The reports and statements shall becertified by BOD through the Chair, the Committees throughtheir respective Chairs, the Treasurer and the Office Manager.

A copy of the Annual Report shall be submitted to CDA

within 60 days from the end of the fiscal year.Section 5. Accounting System. Unless otherwise prescribed by the

Cooperative Development Authority, the Cooperative shall

adopt the generally accepted accounting procedures andpractices, taking into consideration the cooperative principlesand practices.

Section 6. Settlement of Disputes. Any dispute arising between

or among Directors, Committees, Officers and individualmembers shall be referred to an Arbitration Committee of threemembers: one shall come from the federation or union ofwhich the Cooperative is a member and/or operating withinits area of operation and the two to be nominated by each ofthe parties concerned. The decision of the arbitrators may be

appealed to CDA within 15 days from date of notice.

If the dispute is one involving complicated questions of lawand fact, the parties involved may refer the same to CDA.

Article VIII


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AMENDMENTSSection 1. Amendments. Amendments to the Articles of

Cooperation and these By-Laws may be adopted by 2/3 vote ofthe members in good standing at the Annual or Special General

Assembly Meeting called for the purpose.The amendments shall take effect upon receipt by theCooperative of the corresponding Certificate of Registration ofAmendments issued by the Cooperative Development Authority.

______________________________________________________________________

ECONOMIC SURVEY

Credit co-operatives typically borrow funds from inside sources, mostlytheir members, and outside sources, mainly banks. They work in some respectlike formal sector banks, collecting deposits from and granting loans to theirmembers.

Recent theoretical advances have been made in the study of themotivation for and design of risk sharing institutions in general and creditarrangements in particular2. One recent strand of the literature on mechanismdesign (Moore, 1994) has stressed the possibility of finding efficient outcomes

in environments where agents are well informed about each other. Thisliterature focuses on selecting a set of rules that induce people, given theirprivate information, to take some prescribed action. Credit institutions canthen be seen as mechanisms that aim at dealing with the various informationand enforcement constraints to bring about more socially efficient outcomes.The approach of Banerjee et al (1994) to the study of different forms of creditcontracts views the constitution design problem in a credit co-operative as amechanism design problem.

Two major approaches to analysing credit co-operatives have thus beenput forward. The first has focused on the long-term interaction that they

ensure. According to this view, co-operatives should be designed to ensurethat members have durable long-term relations among themselves or elseidentify sufficiently with the collective (Banerjee et al. 1994). This approachgives reasons why privately optimal, short-sighted behaviour may be curtailedin a credit co-operative. The sociological reason emphasises the role of thecommunity in sustaining non opportunistic behaviour among participants.


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Social sanctions are typically not available in a conventional bank, but areavailable in a credit co-operative. The second reason is based on the fact thatthe co-operative is sustained by repeated action among the participants.

Another approach considers that credit co-operatives are an

organisational form that tries to use local information and enforcement, andaims at providing a closer monitoring of borrowers than do conventionalbanks3. They have a comparative advantage in using local information,monitoring and enforcing sanctions on borrowers. This is the so-called peermonitoring view4 (Stiglitz, 1990; Arnott and Stiglitz, 1990). Individuals whointeract in a variety of non-market contexts tend to know each other well.Thus they may have greater ability to monitor each other than do formalfinancial institutions, such as banks. This can explain why many non-marketinstitutions function effectively where formal institutions fail. For example, thefrequent failure of formal banking arrangements in low-income situations23 is commonly attributed to informational problems such as adverse

selection and moral hazard (Braverman and Guash, 1986; Binswanger, 1986).In such contexts non-market institutions may still be able to work.

While in a large-scale bank an individual may wish to monitor those whohave been granted loans and on whose performance the return to his savingsdepends, it is usually extremely costly for him to do so. By contrast, in a creditco-operative such monitoring may be easier, given the individuals localknowledge of borrowers and the relatively small size of membership. This mayreduce the two kinds of agency problems experienced in banking: theborrowers and the monitors. Borrowing members of the co-operativeundertake projects about which they have some private information. If there is

a moral hazard problem, the other members of the credit co-operative have tobe induced to monitor.

There are at least three ways of providing incentives to the borrowersand to the monitors. The first consists in making the non-borrowing memberliable for the debts of the credit co-operative, so as to encourage him tomonitor, by serving as a guarantor, to which outside creditors will appeal incase there is a default on loans from non-members. The second involvesmaking the non-borrowing member a creditor. Internal fund raising is then ofmajor importance, as well as generating internal funds. The third impliesaltering the terms of the contract. For instance the interest rate on internal

funds may be made to depend on the success of the borrowers project.Banerjee et al. (1994) shows that providing incentives via liability rules and viausing internally generated funds are substitutes. Each system can be optimalunder some configurations of parameters.

The comparative advantage of informal non-market institutions in termsof enforcement has two features. The first concerns the scope of sanctions. Inmost social structures, mechanisms of social control already exist to limit


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antisocial behavior. The second feature concerns the depth of sanctions. Inlow-income countries, many formal institutions, such as banks, are new, butthere is a long history of co-operation in informal settings.

In theory as well as in practice, credit co-operatives raise two major

problems: free riding and collusion (Besley, 1995b). The first stems from thefact that among the members of a co-operative many may very well benonborrowers. Each of them may be required to play some monitoring roleaccording to the type of structure which prevails among the three mentionedabove. Free rider problems would emerge in case none of the non-borrowers isready to put in the effort required to get the optimal level of monitoring. Thesecond problem is linked to the possibility of collusion between nonborrowersand borrowers who may find themselves in a better situation by not repayingtheir loan to the lender. The fact that individuals have good information abouteach other may indeed be both a good thing since this would make co-operatives more effective from a monitoring point of view and a bad thing,

in as much as these individuals know each other well and can potentiallycollude.

Credit expansion by credit co-operatives may be viewed as a source ofdifficulty for monetary control. While such credit expansion is subject toceilings set by the comprehensive credit plan1 compliance with the plan mayhave proved much more difficult to monitor. Thus Credit Cooperative wouldrepresent an important source of faster than planned credit expansion.However, this assertion should be qualified since the loans of CreditCooperatives have represented only a fraction of the deposits they collect. Ofcourse this does not imply that Credit Cooperatives have not participated

during certain periods in excessive credit expansion. These excesses haveled the authorities to try to enforce existing regulations and to reinforce them.Furthermore they recently designed asset liability ratios as an alternative formof management to the credit ceilings.

credit cooperative coop_mgt (1)

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