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Stabilization Fund System Keeps Co-op Trust

26,000 cooperatives in the Philippines with memberships ranging in size from 15 to 100,000 manage the hard-earned money of their members.  Their foundation is trust.  When trust is gone, co-ops are gone.
 
The Stabilization Fund System (SFS) is a form of “solidarity fund” as cooperatives contributing to it, in effect, are coming together to help one another to prevent insolvency (or bankruptcy) – thus maintaining the trust and confidence of depositors.
 
Following the models in Germany, Netherlands, Canada and South Korea, NATCCO Network established the SFS in 2008 with 3 elements: 
 
1) SUPERVISION AND MONITORING through on-site Risk-Based Evaluation (RBE) of member-cooperatives by the SFS Team
 
2) OFF-SITE MONITORING AND FOLLOW-THROUGH of compliance to RBE recommendations
 
3) FINANCIAL ASSISTANCE, or use of the Stabilization Fund, as a last resort to prevent co-op run/bankruptcy.
 
Overseeing the Fund is the SF Committee comprising the NATCCO CEO, NATCCO Chairperson, the Cooperative Development Authority (CDA), the Dept. of Finance or the Bangko Sentral ng Pilipinas, and the Association of Asian Confederation of Credit Unions.
 
The SFS provides co-ops:
 
1) Supervision and monitoring of cooperatives, and if necessary, remedial measures 
 
2) Awareness of the cooperative’s risk level and recommendations to control and mitigate risks
 
3) Self-Regulation to protect cooperatives against insolvency, thus protecting the investments of individual members
 
4) Increase of public trust and confidence in cooperatives
 
5) Cooperatives recognized as a self-regulated financial provider of choice to the marginalized 
 
6) If all co-ops participate in the SFS, this displays Solidarity 
 
The approaches of the SFS are 1) pro-active prevention, avoiding problems in the first place, and 2) holistic, evaluation of a co-op’s financials, investments, credit, cash, controls and systems,  governance, compliance and human resources.
A cooperative under the SFS agrees to:
 
Contribute 0.5% of Total Assets to the Fund which the cooperative builds up  over time
 
Submit financial data for monitoring
 
Open books for inspection
 
The SFS has 50 member co-operatives nationwide, contributing P24.3 Million to the Stabilization Fund.  
 
Holy Child Multi-Purpose Cooperative (Bato, Leyte) joined the SFS in 2008.  General Manager Lorna Gesultura, says: “We never regret investing in the SFS. Aside from securing co-op assets, it earns interest. At inspections, we're guided and monitored in our operations.”   
 
St. Vincent Ferrer Parish MPC (Odiongan, Romblon) Chairperson Martin Lasaga says: “We’re happy to know the areas in our operation where we need to focus!”
 
Technical partner is German co-op federation Deutsche Genosenschafts Raiffeissen Verband (DGRV).
 
The National Association of Training Centers for Cooperatives was established in 1977 to provide and standardize the education and training components of cooperatives.
 
Today, the National Confederation of Cooperatives’ (NATCCO Network’s) Mission is to “build the socio-economic capabilities of cooperatives through the delivery of superior financial products and allied services.”
 
For co-ops to be able to help their members rise out of poverty, the NATCCO Network offers training to co-op leaders, managers and staff in Financial and Risk Management to Bookkeeping, from Marketing to Information Technology, from gender & development and Disaster-Readiness for business continuity, and every aspect of a co-op’s operations.
 
Other services include Financial Intermediation (taking deposits and providing loans), Information Technology (Financial software, ATMs, POS, mobile payment platform) Conditional Cash Transfer, Stabilization Fund, Life Insurance, and Advocacy & Networking.
 

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NATCCO Network
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For more Information:
913.70.11-15 loc.310
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