Adapting and Preparing Co-ops for Post-COVID
With the global pandemic caused by the Corona Virus, all establishments and institutions must adapt and prepare for the “new normal.” On April 29, Bayan Academy conducted an online forum entitled “Preparing cooperatives for new normal” hosted by Patch Dulay, Program Director of Bayan HUB and Mary Rose Gobb, Head of NATCCO Knowledge Resource Center.
The challenge is clearly for co-ops to continue serving their members during and after the crisis caused by an unseen enemy.
The panelists were Ma. Cristina Naigan, CEO of St. Martin of Tours Credit and Development in Bulacan, Rosalie Valencia, CEO of VALDECO Multi-Purpose Cooperative in Valenzuela City, Felimon Espares, CEO BARBAZA Multi-Purpose Cooperative in Antique, Rudolph “Tad” Montayre, COO of Fair Child Cebu Community Multi-Purpose Cooperative, Gadwin Handumon, CEO of PAGLAUM Multi-Purpose Cooperative in Misamis Occidental, and Engr. Sylvia Paraguya, CEO of NATCCO Network.
They all agreed that problems faced by most co-ops are liquidity, delinquency, loan collection, health and safety of staff, travel restriction, and risks of face-to-face transactions.
Dulay gave the first question to the panelists: “How is your co-op adapting to this New Normal?”
Based in Antique Province, Barbaza Multi-Purpose Cooperative has branches in Panay and Negros islands, and has operated from the start of the quarantine in March 15, giving hazard pay to employees who face risk. To ensure continued operations and so that staff do not have to travel, the staff are housed at the co-op’s offices. The co-op members can also do transactions online through KAYA Payment Platform.
Although there is a moratorium on loan payments, members have continued with their payments.
As part of their community services BARBAZA MPC gave cash assistance to members. The co-op has appropriated about P30 Million for assistance to members.
Based in Bulacan, St. Martin of Tours Credit and Development Cooperative’s initial reaction was to close its 12 branches in Central Luzon to comply with social distancing. Only two branches opened 2-3 days a week with shorter period to serve members. SMTCDC offers online transactions to the members. By the second week of April, SMTCD gradually normalized operations. There have been many withdrawals as members want to have cash at home.
“Fortunately, St. Martin is well-capitalized!” said Naigan.
Patronage refund was given to members. They conducted surveys and divided members into three categories: Bleeding, Striving and Surviving. Since most of the members are engaged in restaurants, food, and rice trading, part of the co-op’s business plan is providing financial services for members to bounce back after the crisis. They customize products to meet the needs per category.
In Cebu, Tad Montayre shared the best practices of Fair Child Cebu Community Multi-Purpose Cooperative. Currently, FCCC MPC is in the middle of rebound, but the co-op has implemented Government’s mandate for loan payments moratorium. Fairchild has started giving members cash assistance of Php. 1,800.00. Re-planning is being done, creating a scenario on how to project trends and how to assist members even more.
“The co-op must not be too dependent on loans because PAR will rise,” Montayre said.
Members are encouraged to pay their loans if they can, and not to take advantage of the government-imposed moratorium because “it will benefit the members anyway.”
The co-op also encouraged their member to reduce expenses and to think of alternative income sources like growing vegetables at home. In late March, Montayre announced that FCCC MPC attended training on “Family Budget Item discussing essential type of business for family” with NATCCO’s Diaspora Program.
Montayre urged co-ops to establishes linkages particularly in the agricultural supply chain, where, for example, co-ops in Luzon can supply rice to other co-ops, where payments can be spread.
NATCCO CEO Sylvia Paraguya replied that NATCCO has partnered with the Philippine Business for Social Progress (PBSP) to produce food packs with a co-op from Baguio City providing rice, another co-op in Nueva Ecija providing rice, and on in La Union providing dried fish.
NATCCO & PBSP are both members of the Caucus of Development NGO Networks.
Coops should buy from the farmer, and NATCCO aggregates for the wholesale and sell to members in Novaliches (Quezon City) and Paranaque City.
Paglaum Cooperative’s primary concern is agricultural supply. Handumon said it would be good if co-ops have farm-level operations. At the moment, co-ops have working capital but cannot get supplies. The co-op has also gotten approval from the Department of Agriculture for the Alpas Project to ensure that food production continues.
Many co-ops are on minimal operations, probably to avoid bank runs. In the case of Paglaum Cooperative, to avoid mass withdrawals, provide COVID Support Loan.
Guide Question: “What is the post-activity of the co-op after COVID-19?”
BARBAZA MPC needs to outsource the product, distribution and study the challenge of trading. Barbaza will provide other loan window and re-financing.
Naigan added, “The COVID Crisis has changed everything especially the needs of the member.” She also suggested: 1) review the workload of employees, 2) automate operations and provide the same services to members, 3) Revise policies to simplify processes, 4) Maximize the contact center for query, 5) promote online payments & consider data privacy to protect from fraud.
Rosalie Valencia of VALDECO, agreed online and inter-branch transactions between co-op offices are essential, as proven during the Covid Crisis. “Educate the member on emergency savings so after this bleeding time we know the target market,” Valencia said.
Guide Question: “What are the protection measures you are implementing for your employees?”
Cielito Garrido of San Dionisio Cooperative gives emphasis not to forget the silent appeal of employees. “Work from home is stressful. It adds stress so adapt new normal as sector. As we go back let us combine our best practices the same for everyone.” – Garrido said.
Lastly, Engr. Paraguya gave her insights: “Preparedness, re-planning by reviewing workload, looking out for liquidity, customizing the needs of products, look for the possible services that can be offered at this time, online banking that can allow us to operate even in systems. Digitalization on how we move online loans.”
As of late April, 28 cooperatives have submitted their financial statement that reflect liquidity. Paraguya encourages all co-ops to submit financial statements to see how figures are moving and determine co-ops’ status during the COVID-19 Crisis.
By Ma. Claudette Risa Bataller