PROGRAMME

Preliminaries Jordan Madjus CDS II/ CRITS

Acknowledgment of Participants Jordan Madjus
Welcome Message Venus M. Jornales Acting Reg Director
Overview Priscila A. Acopio Acting Asst. Regional Director
Training Proper
FUNDAMENTALS OF COOPERATIVE
Origin,Philosophy and Concepts of Cooperative Jordan Madjus CDS II/ CRITS
Cooperative Laws/ Salient Provisions of Atty. Jasper Carias Legal Officer
Cooperative Laws (micro)
Articles of Cooperation and By-Laws Grace Mapanao Registration Section
Plans, Programs, and Policies of Cooperatives Rowan Delos Santos CPDAS, Chief

GOVERNANCE AND MANAGEMENT OF COOPERATIVE

Governance Principles and Practices of Good Governance Jordan Madjus CDS II/ CRITS
Priscila A. Acopio Acting Asst. Regional Director
Operation and Management of Cooperative Irene Petilla CSF, Chief
Relevant Laws Affecting Cooperative Atty. Jasper Carias Legal Officer
Mark Mapanao Regulatory Section, Chief
Overview of Social and Economics Standards for Coops Mark Mapanao Regulatory Section, Chief
Open Forum
Closing Message Priscila A. Acopio Acting Asst. Regional Director
EMCEE Jordan Madjus CDS II/ CRITS
HOUSE RULES

 Don't Be Late.
 Turn on the Camera if possible.
 Avoid multi-tasking.
 Limit distractions.
 Position your camera properly.
 Be mindful of background noise.
 Mute your microphone all the time unless
necessary.
 Post your question on the chat box.
 Questions will be entertained during the
open forum
 REMINDERS
Don’t forget
your ATTENDANCE
Click the link on the CHAT BOX
and fill-out the form.

We have separate attendance

in the morning
and in the afternoon.

Certificate will be provided.

1. Fundamentals
of Cooperatives

2. Cooperative
Governance
and Managent
 LEGAL BASES
Article 44, RA 9520

MC 2011-27 Implementation of Training Requirements

for Coop Officers

MC 2017-01 Capacity Building Program for Micro

Cooperatives
WHY A COOPERATIVE
WHAT IS A COMMUNITY
A community is made up of people with differing levels
of living, beliefs, customs, traditions, relations, needs,
aspirations and others

Community members need to define their common

development goals to be able to work and move
forward for common good.

As a member, one should be able to relate and

identify the needs and aspirations with those of others
as well as the institutions that strengthen a community
like the church, government and others.
WHAT IS A COMMUNITY
A community is made up of people with differing levels
of living, beliefs, customs, traditions, relations, needs,
aspirations and others

Community members need to define their common

development goals to be able to work and move
forward for common good.

As a member, one should be able to relate and

identify the needs and aspirations with those of others
as well as the institutions that strengthen a community
like the church, government and others.
 What are the commonly identified
community problems?
 Lack of job opportunities / high unemployment
rate;
 Inadequate income to support the family;
 Lack of education / knowledge/skills in
production/processing
 Inequitable distribution of wealth;
 Last of people’s participation in decision
making;
 wrong values and beliefs;
 People are not united, “to each his own”;
 What are the commonly identified
community problems?

Peace and order situation;

Inadequate supply or extremely
high cost of goods or services
High cost of money/lack of
access to capital; and
Poor supply of potable water
What are alternative solutions
A. Community organization/group formation
The basis of organizing and forming structures
whether formal or informal should be clear to
the people of the community.

The organizing objectives and action to be

taken shall define what kind of organization is
needed (e.g. traditional or informal ones like
the bayanihan, Tiklos, turnuhan and others or
the formal ones such as civic organizations,
cooperatives, people’s associations and
others.
What are alternative solutions
B. Education
Increase awareness and deepens the
understanding of the people on the
real issues/problems, makes people
better decision makers in solving their
problem, collectively respond to their
needs. This is done through trainings,
seminar, conferences, workshops,
dialogues, and others.
What are alternative solutions
C. Organized Action

Mobilizing the people elicits

participation and understanding
of the real purpose of grouping
themselves. It develops
confidence with the success
obtained through collective
actions.
Assessing the needs of the community is
necessary to make sure that the real needs
of community are addressed by the
proposed cooperative
Understanding your group or community is
crucial to being able to work in it. Failing to
understand it will deny you credibility and make
it difficult for you both to connect with group
members members and to negotiate the twists
and turns of starting and implementing a group
initiative or intervention. It is extremely important
to know the physical and geographical
characteristics of your community, its physical
and cultural characteristics.
Examine whether cooperative will answer the
needs and aspirations of your community
ICA BLUEPRINT
By 2020, the aim is for the co-operative form of
business to become:
• The fastest growing form of enterprise.
• The model preferred by people.
• The acknowledged leader in economic, social and
environmental
sustainability
ICA BLUEPRINT

To achieve this, the ICA Blueprint for a Co-operative

Decade identifies five key, interlinked goals:
1. Elevate participation within membership and
governance to a new level.
2. Position co-operatives as builders of sustainability.
3. Build the co-operative message and secure the co-
operative identity.
4. Ensure supportive legal frameworks for co-operative
growth.
5. Secure reliable co-operative capital while
guaranteeing member control
WHAT IS A cooperative?
"ART. 3. General Concepts. - A cooperative is an
autonomous and duly registered association of persons,
with a common bond of interest, who have voluntarily
joined together to achieve their social, economic, and
cultural needs and aspirations by making equitable
contributions to the capital required, patronizing their
products and services and accepting a fair share of the
risks and benefits of the undertaking in accordance
with universally accepted cooperative principles.
NATURE AND CHARACTER OF COOPERATIVES

Cooperatives are both associations of

people and business enterprises. They are
distinguished from other organizations by
their philosophy, nature and character.
Failure to appreciate their true nature and
character deviates from cooperative
principles and loses sight of the ultimate
objective of the coop movement
NATURE AND CHARACTER OF COOPERATIVES

1. Cooperatives are service-oriented. -

cooperatives are organized to serve
their members by providing goods
and services at reasonable cost.
2. Coops are community oriented –
coops work for the welfare of their
members by integrating themselves
into the life of the community in
particular and the nation in general
NATURE AND CHARACTER OF COOPERATIVES

3. Cooperatives are people oriented – coops

are not merely economic instruments
concerned with dividends and related
economic and financial returns. They are the
mechanisms of change for total human
development.is means that total
development of mas a human being in all the
economic, political, cultural and spiritual
aspects.
4. Coops are owned, managed and patronized
by members. – coops are member-owned,
member-controlled and member-used.
Ownership is a very important factor in the
success of any coop. It is very important that
members have full authority to manage and
control their coop.
NATURE AND CHARACTER OF COOPERATIVES

5. Coops are business enterprises – coops engage in

businesses with social responsibility. They play a
meaningful economic role in the community life
by servicing and performing as efficiently ad
responsibly as the other financial and business
enterprises. Coops have to generate surplus to be
able to continually improve and expand their
services.
6. Coops develop best through self-help and mutual
respect – Robert Owen advocated the
philosophy of self-help hath inspired the
“Rochdale Pioneers” to organize. He said, :if you
want some thing done, do it yourself.” This
philosophy has been responsible for the success
of many coops all over the world. – and it is the
best alternative for the poor in any country to
unite and help themselves out of their depressed
situation.
NATURE AND CHARACTER OF COOPERATIVES
This is not to say that they should not be assisted. But
assistance from outside, whether technical or financial must
not stifle but stimulate initiative, self-help and self-reliance.
The principle of subsidiarity also applies – that before asking
or soliciting aid from the outside, self-determination and
self-capability should be considered
7. Coops serve best when they answer the real and felt
needs f the members – It is important therefore that proper
approaches and techniques are employed to ensure that
the real needs of the members are identified and
recognized before any coop is organized. The assisting
agency/ies should make the real need be felt by the
members.
NATURE AND CHARACTER OF COOPERATIVES

8. Coops develop best from bottom to top – being mass-

based organizations, coops develop best from the
bottom to top. Organizationally, their development
should be from the primary level to the secondary,
tertiary and up to the apex.
9. The development of coops Is enhanced through a
multi-sectoral approach – the government, non-
government, and the coop sector – must play a
multi-sectoral approach to ensure that all aspects of
the development process are considered. This
enhances the smooth and continuous development
of the coops. This approach involves the participation
of all sectors from the planning stage to the
implementation, evaluation and monitoring of all
activities.
COOPERATIVE VALUES,
PRINCIPLES AND PRACTICE
 VIDEO SHOWING OF
 COOPERATIVE PRINCIPLES
 COOPERATIVE VALUES
 ME AND MY KOOP
 VIDEO SHOWING OF
 COOPERATIVE PRINCIPLES
 COOPERATIVE VALUES
 ME AND MY KOOP
COOPERATIVE PRINCIPLES

Voluntary and Open Membership —

Cooperatives are voluntary organizations,
open to all persons able to use their
services and willing to accept the
responsibilities of membership, without
gender, social, racial, cultural, political, or
religious discrimination.
 Democratic Member Control — Cooperatives
are democratic organizations that are
controlled by their members who actively
participate in setting their policies and making
decisions. Men and women serving as elected
representatives, directors or officers are
accountable to the membership. In primary
cooperatives, members have equal voting
rights of one-member, one-vote. Cooperatives
at other levels are organized in the same
democratic manner.
Member Economic Participation — Members
contribute to, and democratically control, the
capital of their cooperative. At least part of that
capital is the common property of the
cooperative. They shall receive limited
compensation or limited interest, if any, on
capital subscribed and paid as a condition of
membership. Members allocate surpluses for any
or all of the following purposes: developing the
cooperative by setting up reserves, part of which
should at least be indivisible; benefiting members
in proportion to their patronage of the
cooperative’s business, and, supporting other
activities approved by the membership.
Autonomy and Independence —
Cooperatives are autonomous, self-
help organizations controlled by their
members. If they enter into
agreements with other organizations,
including government, or raise capital
from external sources, they shall do so
on terms that ensure democratic
control of their members and maintain
their cooperative autonomy.
Education, Training, and
Information — Cooperatives shall
provide education and training for
their members, elected and
appointed representatives,
managers, and employees, so that
they can contribute effectively and
efficiently to the development of
their cooperatives
Cooperation Among Cooperatives
— Cooperatives serve their
members most effectively and
strengthen the cooperative
movement by working together
through local, national, regional,
and international structures.
Concern for Community —
Cooperatives work for the
sustainable development of
their communities through
policies approved by their
members.
Cooperative Practices

 Capital Formation - Starting a new cooperative can

create a need for substantial capital. A problem
develops when trying to operate with limited
membership equity capital. The task of financing a
new cooperative with member equity alone is usually
impossible. Therefore, the best source of additional
funds needed is from members in the form of: a)
membership fee or purchase of stock; b) agreement to
withhold portion of net earnings profits); c) by
assessment based on units of products sold or
purchased.
Cooperative Practices

 Cash trading - This is business done on a cash and

carry basis. The customer enjoys at least the use of the
goods and services for the cash payment he/she
gives. Cash trading promotes equality since anybody
with cash can enjoy the service patronage. This
practice can train members to observe the habit of
balanced spending. Furthermore, the cooperative
would be able to avoid bad debts and stabilize
business operations. Finally, it is a way of increasing
growth.
 Cooperative Practices

Selling at market price - Cooperatives offer

goods and services at prevailing market prices.
This promotes stability. It can cope with
operational expenses and cover up the negative
effects of shrinkage, depreciation and losses. It
helps maintain the prices of goods;
 Cooperative Practices
Constant Expansion - As organizations,
cooperatives have to grow for community
services. Expansion is a must. It is done
intensively and extensively. New members
should be recruited to accumulate more capital
and savings to support operation of the
expanded business and services which in the
long run will provide more benefits for them.
However, members in this regard should
undergo continuous education and training to
learn various management
practices/techniques and effective financial
supervision.
 Cooperative Practices
 Quality standardized goods - Cooperatives are intended to develop
communities through the production of high quality goods and
provision of better services. Cooperatives could help by patronizing
only standardized products and services of high quality. Hence,
different types of cooperatives will strive to improve their goods and
services to stand competition with business establishments. This in turn
will be instrumental in improving life in the country.

 Cooperative wholesale and interlending - Cooperatives can be

organized with enough people and capital. They respond to the needs
of the community. Needs arise when there are people. The expansion
of membership may result in wholesale business. In fact, to be
effective, wholesale business, interlending (cooperative bank), could
be done by primary societies. Defects from retail business could be
avoided.
 Cooperative Practices
 Minimize expenditures - A significant factor favoring the
growth of cooperative is its being a community project.
Their officers do not receive remuneration. If they get
compensation, it is only in the form of allowances, per
diems, or honoraria. When audit shows that the cooperative
is not capable or can afford the minimum wage, only
employees get paid regularly. The government can give
exemption. Furthermore, laws may allow exemption from
income and sales taxes. Minimizing expenses should not be
taken as a remedy to cover up the weaknesses of the
system. It is not to be conceived as a form of dole-outs, but
rather , it should be considered as motivation to make the
movement stand on its own and soon attain its objectives.
Once its objectives are achieved, the movement can take
its rightful place in the development of the country.
THE COOPERATIVE
DIFFERENCE
 Comparison of Cooperatives with Other Types of Business Enterprises

BASIC DIFFERENCE SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE

1. Number of Persons Required for Only one person At least two or more At least 5 persons (natural or juridical At least 15 persons (natural persons
Formation persons) can be stockholders at the can be members only of primaries,
same time while juridical can be members o
federations and/or unions

2. Grant of juridical personality No separate juridical personality from Mere agreement of partners can be a Must be registered with SEC Must be registered with the CDA
owner but business name should be partnership. However, it is better if
registered with the DTI registered under the SEC

3. Registration Requirement for Application Form Contract of Partnership Articles of Incorporation, By-laws and Articles of Cooperation, By-laws,
Documentation Bank Statement Economic Survey, Bonds of
Accountable Officers, Treasurer’s
Affidavit, Undertaking to Submit
Reportorial Requirements, name
Verification Slip, PMES, Endorsement
from Concerned Agencies (for special
types of coops)

4. Capital Contributions Only owner contributes capital Partners contribute cash or services Stockholders pay for amount of shares Member contributes (limited to 10% of
he wants to buy subscribed capital)

5. Management Structure Only one person decides Partners make a collective decision Board of Directors makes final decision General Assembly has final decision

6. Voting Rights No voting rights as it concerns only Vote proportional to interest Vote proportional to interest, proxy One member, one vote, no proxy
one person voting allowed voting

7. Liability Unlimited as to owner Unlimited as to partner except limited Limited until authorized capital Limited until subscribed capital
partnership
8. Taxability Income tax of owner Partners pay tax on share as partners Profits taxable, stockholders pay tax Net surplus non-taxable, shareholders
on dividends received pay tax on the dividends received by
them

9. Effect of death of owner, partners, End of business operations unless Partnership automatically dissolves Corporation continues, heirs inherit Cooperative continues, heirs become
stockholder of member heirs can take over business shares members if qualified

10. Motive for existence Profit Profit or service Profit Profit and service
 Statement of Cooperative Identity

 Statement of Coop identity was adopted at the 1995 General

Assembly of the International Cooperative Alliance (ICA) in
Manchester , England during the Alliance centenary. The
statement was produced from a lengthy process of
consultation with thousands of coops across the continents. It
contains the coop definition, statement of coop values,
revised coop principles.

 ICA is an independent non-government organization which

unites, represents and serves coops worldwide. It is founded in
1895.
Coop Definition (ICA)

A cooperative is an autonomous
association of persons united
voluntarily to meet their common
economic, social, and cultural needs
and aspirations through a jointly
owned and democratically
controlled enterprise.
 What is a Cooperative?
 Cooperatives called by various names around the world:

cooperativa, cooperative,
creditunion, kooperasi,
SACCO Banque Populaire
Cooperative de Ahorro Y
Credito
Cooperatives’ uniqueness…

 autonomous association of persons united voluntarily ( social

organization )
 to meet their common economic, social and cultural needs and
aspirations (total engagement of being)
 Through-jointly-owned and democratically controlled enterprise
(business enterprise)
 A dynamic school of learning, and
 A way of life
 Cooperative’s uniqueness…

Universal coop philosophy:

“People Helping People”

Or
“Mutual Self Help”
Coop uniqueness…

 Shared Universal Coop Inherent Values:

mutual responsibility
democracy, equality, equity, self
management and discipline, self help
and solidarity
Cooperative’s uniqueness…

Distinct Principles –the heart of which

is the concept of human
development and the brotherhood of
man expressed through people
working together to achieve a better
life for themselves and their
community.
Cooperatives uniqueness…

Shared universal structure :

members are the most important element
- members govern
 members have the supreme authority
Do you know that…

 The United Nations in its assembly resolution strongly recognizes the

significance and the contribution of the cooperative movement:
“… Recognizing that cooperatives, in their various forms, promote
the fullest possible participation in the economic and social
development of all people, including women, youth, older persons
and people with disabilities and are becoming a major factor of
economic and social development.”


Do you know that…

In 1995, United Nations recognized and

reaffirmed that cooperatives have an
important role to play in economic, social
and cultural development and
proclaimed a UN International Day of
Cooperatives. The celebration day
compliments with the International
Cooperative Alliance (ICA) celebration
which falls every first Saturday of July of
every year.
Do you know that…

Last 5th day of July 2009, the world coop movement was celebrating the

International Day of
Cooperatives with the theme:
“Driving Global Recovery Through
Cooperatives.”
Do you know that…

• The International Cooperative

Alliance (ICA) first celebrated
International Day of
Cooperatives in 1923.
• ICA celebrated its centennial
establishment in 1995.
Do you know that…

The ICA together with the world

coop movement is working and
strongly advocating for the
United Nation’s adoption of the
Year 2012 as the International
Year of Cooperatives!!!
and behold…!
 Last December 18,2009,

the United Nations proclaimed

2012 as the International Year of
Cooperatives.
“In so doing, UN recognized that the coop business model is a major factor in
realizing economic, social and cultural development of all peoples”.
Do you know that…

“The Co-operative Movement brings

together over One Billion people
around the world. The UN
estimated in 1994 that livelihood of
nearly 3 billion people, or half of
the world’s population, was made
secure by coop enterprises…”
The COOPERATIVE DIFFERENCE…

COOPERATIVES are enterprises that put

people at the centre of their business and
not capital.
COOPERATIVES put people at the heart of
all their business.
COOPERATIVES are also enterprises that
follow a set of principles and values.
 The coop significant gains…
 In Asia alone 45.3 M people are members of credit cooperative or
credit union
 In Argentina, there are 12,670 coop societies with 9.3 M members,
approximately 23% of its population
 In Canada, 4 of every 10 Canadians are members of at least one coop
 In Quebec, approximately 70% of the population are coop members
 Costa-Rica counts over 10% of its population as members of coops
 The coop significant gains…
 In Bolivia, close to 3M people or one-third (1/3) of its population is a
member of the 1590 cooperatives
 In Colombia over 4.4M people or 10.7% are members of the 7,833
coops. The movement report and annual growth rate of 11.27% with
453,180 new members joining cooperatives in 2008.
 In Iran, there are over 130,000 coop societies with 23 M members or
approximately 33% of the population.
 The significant gains…
 In Germany, 20 M people are members of coops,
1 out of 4 people
 In Indonesia, 27.55% families representing approx
80 M individuals are members of coops
 In Japan, 1 out of every 3 families is a member of
a cooperative
 In Kenya, 1 in 5 is a member of a coop or 5.9M
 In India, over 239 M people are members of a
cooperative
 In Malaysia, 5.9M people or 24% of the total
population are members of coops
 The significant gains…
 In New Zealand, 40% of the adult population are
members of coops
 In Singapore, 50% of the population (1.6M) are
members of a cooperative
 In the United States, 4 out of 10 individuals is a
member of a cooperative
 In Finland, close to 1.5M individuals which represents
62% of the Finnish households are members of coops
 Coops are significant economic actors in
national economies…

 In Korea, agricultural coops have membership of over 2

Million farmers (90% of all farmers)
 In Belgium, coop pharmacists have a market share of
19.5%
 In Brazil, coops are responsible for 40% of the agricultural
GDP and for 6% of total agri business exports
 Canadian maple sugar coops produce 35% of the
world’s maple sugar production
 In Cyprus, the coop movement held 30% of he market in
banking services and handled 35% of all agricultural
produce
Coops are significant actors in national
economies…
 In Japan, the agricultural coops report outputs of US$
90 billion with 91% of all Japanese farmers in
membership
 In New Zealand, 22% of GDP is generated by coop
enterprise. Coops are responsible for 95% of the dairy
market.
 In Norway, dairy coops are responsible for 99% of the
milk production
 In Singapore, consumer coops hold 55% of the market
in supermarket purchases
 In Poland, dairy coops are responsible for 75% of dairy
production
 Coops are significant actors in
national economies…
 In France, 9 out of 10 farmers are members of
agricultural coops; coop banks handle 60% of the total
deposits and 25% of all retailers in France are coops
 In Kenya, coops are responsible for 45% of the GDP
and 31% of national savings and deposits.
 In Kuwait, with coop members that is 6.5% of the
Kuwaiti population handled nearly 70% of the national
retails trade.
 In Latvia coops is responsible of the 12.3 %of the
market in food industry
 Coops are significant actors in
national economies…
 In Portugal, approximately 3000 coops are
responsible for 5% GNP of the country
 In Sweden, consumer coops held 17.5% of the market
in 2004
 In UK, largest independent travel agency is a
cooperative.
 In Uruguay, coop produce 90% of the total milk
production
 In Vietnam, coops contribute 8.6% of the GDP
SIGNIFICANT GAINS…

Coops create and maintain

employment…
Coops provide over 100 million jobs
around the world, 20% more than
multinational enterprises
 Coops create and maintain
employment…
In Canada, coops employ over 155,000
people. The Desjardin movement is the largest
employer in the province of Quebec
In Colombia, the coop movement provides
123,643 jobs through direct employment and
537,859 as owner-workers in workers coops-
providing 3.74% of all jobs in the country.
In France, 21,000 coops provide 4Million jobs
In Germany, 8106 coops provide jobs for
440,000 people
 Coops create and maintain
employment…
 In Argentina, coops are responsible for providing
direct employment to over 233,000 individuals
 In Bolivia, 1590 coops provide 32,323 direct jobs and
128,180 indirect jobs
 In Indonesia coops provide jobs to 288,589 individuals
 In Italy, 70,400 coops employed nearly 1 Million
people in 2005
 In Kenya, 250,000 people are employed by coops
 The Philippine Cooperatives…
Strongly backed by the
Philippine Constitution
Good Legislative Support:
The Cooperative Code
1.

Old (Republic Act 6938) ;

New (Republic Act 9520)
2. The Cooperative Development
Authority Republic Act 6939