The Stabilization Fund is a form of “solidarity fund” as cooperatives contributing to it, in effect, are coming together to help one another. Why was it established?The integrity of the cooperative is very important and thus, it must be guarded against any unfortunate incident. The failure of one cooperative can lead to a major public loss of confidence in the entire sector. This is why the National Confederation of Cooperatives initiated this Fund. Through the Fund, member cooperatives in financial distress will have access to emergency funding and technical assistance to weather a crisis.How can our co-op join?A cooperative needs to pay a one-time membership fee of P2,500 and a quarterly monitoring fee of P7,500. This will cover the cost of establishing a comprehensive financial database and monitoring for “desk analysis” requirements. Members are entitled to a quarterly analysis of its financial ratios and actual visits to the cooperative at least once a year.What are the mechanics of the contribution?Members of the Fund are required to contribute 0.2% of total deposits to the Fund per annum. It will be a 5-year term deposit and will be non-withdrawable. In the meantime, it will earn an interest of 5% per annum or equivalent of 5-year T-bill Rates, whichever is higher.Members are entitled to access its own contribution with the Fund to cover its losses only after exhausting its own local reserve fund. Any amount needed by the cooperative shall be granted as a soft loan with an interest equivalent to one year T-Bill rate plus 2%.What about technical assistance?The program is aimed at preventing insolvency or failure. So even before a co-op needs to borrow, the Fund already provides technical assistance. Member co-ops are required to submit Financial Statements, Statistical Information and Financial Ratios, Overdue and Refinanced Loans, Deposit Information, and others.A 5-member Stabilization Fund Committee shall be organized, composed of the NATCCO Chairperson, one representative each from the Cooperative Development Authority, Department of Finance or Bangko Sentral ng Pilipinas, Association of Asian Confederation of Credit Unions, and the NATCCO Chief Executive Officer. This committee meets quarterly to formulate policies on the usage of the Fund. It will also supervise member co-ops, analyze inspection and monitoring results, approve inspections plans, meets with representatives of problematic co-ops, recommends and conducts programs to address insolvency.What happens if insolvency becomes a possibility?The Committee, together with NATCCO’s Training and Consultancy Group, will draft a plan for the rehabilitation of cooperatives that need it.