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OUR LADY OF GRACE CREDIT COOPERATIVE

The OLGCC experience: A Proof of Resiliency Against Economic & Social Crisis

OLGCC’s experience is a proof of resiliency against economic and social crisis. It is a history of Caloocan’s community - of people’s plight throughout these years.

“OLGCC is like the steel under the blacksmiths’ hammer. It gets stronger in every blow!”

Introduction

Our Lady of Grace Credit Cooperative (OLGCC) is one of the biggest and oldest operating cooperative in Caloocan City. Being an economic enterprise and at the same time a community organization with credit and savings facility, it played a meaningful role in uplifting the economic conditions of members and assist in barangay and parochial socio-community concerns of Caloocan.

Mr NELSON F. DELA CRUZ is the current Chairman and CEO of OLGCC. He has been in the OLGCC since 1996 and elected as Chairman since the year 2002 up to present. He was the 9th and longest-serving Chairman of the OLGCC.

For forty six (46) years, OLGCC have successfully delivered its services and give members incomparable benefits no other financing institutions can. Having this kind of concern for members and communities, OLGCC, imbedded in its name “Our Lady of Grace” represented as the mother of Christ (in Catholic religion) who cares for her children in the name of God. The name itself earns the respect and trust of its members and the Caloocan community.

Over the years as the Philippines economic condition becomes unstable, particularly in Caloocan City where there is increasing threat of demolition of homes along barangay where most of coop members are located, daily and routinely displacement of coop members who are ambulant vendors, increasing fees charged to peddlers who are mostly coop members by the corrupt local officials and barangay police, and other oppressive forms of socio-economic discrimination experience by the members and local community, the OLGCC acts as their “saving grace” in times of financial needs.

OLGCC as a cooperative savings and credit focus primarily on the needs of the members and have displayed prudence and avoided the excessive risk-taking business unlike the practices of many private banks and other private financing institutions. As it continues to operate and provide loans to members, OLGCC earned the trust and confidence of members and depositors.

“Ang pinagsama-samang kapital at perang inipon (savings), bayanihan at kooperasyon ng mga kasapi bilang pagtataguyod sa simulain ng kooperatiba ay nagsilbing pananggalang laban sa kahirapan at krisis panlipunan.” (OLGCC’s strong capital build-up, cooperation and member’s patronage served as its shield against poverty and social crisis.)

One of the significant lessons that OLGCC can contribute in its 46 years of cooperative operation is that the social capital coming from the hard earnings of the cooperative members when consolidated becomes the most powerful shield against social and economic crisis.

The social capital refers to the seed money invested by the cooperative members as their savings and share capital in the cooperative. The OLGCC cooperative sustained its operations over the years due to the continuous capital build up and patronage of the members. It regained and sustained its financial stability at the edge of Philippine economic crisis. This makes the social capital permeable.

OLGCC has the ability of regenerating and regaining its financial status over the years. Members will contribute and help the cooperative regain itself and strengthen its operations. In times of crisis, the members are always there to assist the cooperative and the members.

“Ang kooperatiba ay hindi matitinag dumaan man sa maraming pagsubok – hanggat nakalubog ka sa kooperasyon ng mga kasapi. Nananatiling nananalig ang mga kasapi sa kooperatiba bagaman may kahinaan sa pamumuno at pamamalakad. Patuloy na susuporta ang mga kasapi.”

OLGCC BRIEF History

“The evolution of social seed of capital with the capability of regenerating itself hereby sustaining its operations over the years.”

As early as 1960’s the clutches of credit financing with high interest lurks within the economic activities of Caloocan. The people were victims of bombays, ‘usurero’ (private individuals lending high interest), financing companies, credit banks and other loan sharks.

Even before the Philippines became a country, Caloocan Community has proven itself in Philippine history. It is the center of activity of Katipunan a secret society that initiates the Philippine Revolution in 1896. The very first armed encountered also begun in the city.

The “Monumento of Bonifacio” is the edifice of Freedom in memory of the Filipino heroes. Even a street near the train station was called Heroesdel came from the Spanish word “heroes del 1896” which means heroes of 1896.

Near this Monumento Circle is a community market called Monumento Market. And here is where the first OLGCC community of people began recruiting its members.

Way back in 1960’s the wife of one of the first founding member of OLGCC owns a small sari-sari store in Monumento Market. As ordinary store owner she and the other community vendors feel the oppressive economic system during these times. His husband Brother Angel Gallardo, a parishioner brought the problems to the concerns of the Parish community-OLGP Church. Being one of the members of the HOLY NAME SOCIETY, a group of parishioners under the umbrella organization of the OLGP, they created the Cooperative in 1965 named it – “Our Lady of Grace –Holy Name Society-Kilusang Kooperatiba, Inc.”

The capital seed started in 1965 at P750 pesos with the initiative of 15 incorporators composed of middle class parishioners of HNS (Holy Name Society). The social and economic condition in the 1960’s spark the middle class to help and each other help the people against the loan sharks.

Significant years:

1965 – initial organizing efforts from the Parish priest and parish leaders 1967, November 23 – formal registration of the OLG-HNS. With 750.00 as initial capital of 15 incorporators mostly middle class citizens and parishioners. 2000- YOUTH BEE was formally registered as a cooperative Laboratory 2002– purchase land and building through a special time deposit “Haligi ng Bagong Gusali” initial at 30k mostly from Youth Bee depositors and parish pensioners. 3-years TD hold-out agreement up to the full construction of the building. 2003-2004 – construction of coop building in San Diego St., 11th Avenue December 2004- Inauguration of the new coop building (4-storey building) with Rev. Bishop Fr. Iniguez, Dd 2004: Initiatives of ACCU/WOCCU to professionalize the cooperatives by using standard forms and policies creating the 4-modules of policy that shall serve as guide to the management’s operations.

Overcoming weakness and lack of professionalism in governance and management

In the past years, OLGCC suffered low income due to weaknesses in governance and weak management.

In spite of these weaknesses, the member’s commitment and trust to the cooperative remain. Each member continuously shared their money and deposit more in order to regain and strengthen the financial status of the cooperative.

It can be traced from their experience because the members are just paying gratitude to the cooperative because during their times of crisis it is the coop who had helped them regain their financial status. The banks and financing institutions owned by individuals and corporations do not help poor people. Instead they victimized and lured these poor people into debts that pushed them into bankruptcy. OLGCC saves the poor members from bankruptcy and offers amnesty and compromise agreements in case of delinquency.

Now that the coop is in crisis, the members are just paying gratitude and it is now their time to help the cooperative in return.

On the dynamic character of cooperative’s social capital.

“OLGCC ang tunay na sandalan ng kasapi sa lahat ng pagkakataon. Hindi magsasamantala sa panahon ng kagipitan at takbuhan sa panahon ng pangangailangan (pambayad ng tuition, kapag mapuputulan ng ilaw, at kapag may nagkasakit sa pamilya.”

The money invested by the cooperative’s members has a savings component. The savings deposits once accumulated can be converted to share capital and Time deposits. Because of this dynamic character, the member becomes a co-owner. During Pre-membership seminar, this orientation is coached in the minds of the member and therefore it becomes imperative for them to perform an obligation which is the continuity of savings as capital build up and never delay in loan payments.

The passion of cooperation is innate in every community of people. All savings, time deposits and share capital they deposit and invest in the cooperative are hard earned money from the poor community. Unlike private banks and big financing companies whose capitalization came from rich individuals and foreign corporations, these money are not hard earned since it was funded from the rich and fortunate individuals.

The OLGCC has proven itself over the years that assisted and help the poor Caloocan communities uplift their lives. The component of social capital is a history of peoples struggle against poverty and OLGCC is there to help them. It is OLGCC who have uplifted them from poverty, let their children go to school, serves in assisting them in their livelihood and lend a hand in their times of crisis. The members will not let OLGCC fall down. The members will continue to support and strengthen the cooperative in order for it to survive.

The Members are the owners of OLGCC.

“Ang pondo ng koop ay galing sa members kaya sila naging kamay-ari. Gayunpaman, ang lahat ng mga gawain ng kooperatiba ay dapat na tumutugon sa pangangailangan ng mga kasapi nito.”

“OLGCC came from the members, it belongs to the members; therefore the more it should serve the members. “From the members; To the members; For the members.”

Majority of the members of the cooperative belong to class C-D-E of Caloocan community (poorest and marginalized). Most often than not, members belonging to the upper class of society have already uplifted their livelihood through the help of the OLGCC. Most of them started from small capital which they borrowed from the cooperative. Later as their capital grow the amount that they borrow from the cooperative also increased to accommodate their increasing capital requirements. All throughout these years, it is the cooperative that lends them the seed capital for their business. Since they are in good standing, they were rewarded by an extended loan which can be borrowed at a discounted rate. These are tuition fee, emergency loan, and patronage assistance loan. They can avail these loans even if they still have an existing loan because they are good payer. They can avail two (2) loans at the same time if they are good payers.

OLGCC saves the members from poverty and bankruptcy caused by financing institutions and social crisis. The coop offers livelihood and subsidies for members with financial problems.

These motivate members to stay in the cooperative despite delinquency and bankruptcy. No other financing institution offers them this kind of benefits.

On management and governance.

OLGCC have several managers, observations is that managers who are not particularly familiar with the operations of the cooperative usually did not bring much development to the coop. But those who rose from the ranks of OLGCC staff became efficient supervisors and managers of the cooperative. These employees displayed a more systematic way of operating the cooperative.

Delinquency and Economic downturns.

The policies of CBU-capital build-up program contributes to the stability of the cooperative in covering up the losses in delinquency.

From 1999 up to 2008, delinquency almost reached at rate of 35-68%. Restructured loans clogged up the credit and collection department and for almost five years, the coop deals with the main operations of amnesty strategies and collection strategies using amnesty and restructuring as a tool of motivating people to pay. Just to retain their Damayan benefits. Most delinquent members hold-on to their membership in order to preserve their benefits from “damayan.”

Several business were tried and accommodated such as Western Union, GPRS, Loan central networking, Bazaar activities and other product networking. No long term business products were sustained because the law is restricting coops to deal with other products. The IRR is too strict in implementing new business ventures and you need to comply with the required feasibility studies per product which cost high professional fees. Otherwise, the coop will be subject to tax charges. The coop is being boxed-in limitations therefore preventing its potential growth and sustainability of operations.(“kinakapon o bino-bonsai ng mga batas ng gobyerno ang mga kooperatiba”)

Inability of government to serve the cooperative community

Bounded by the government restrictions, the OLGCC continued its pilot testing in products worth accommodating. The Bazaar was produced as an activity to promote the livelihood and products of the cooperative members. It is a way of livelihood that assists members in patronizing its own products. Coop products patronize by other co-operators. It is one way of coping up with government imposed restrictions

The government entities (such as CDA, DTI, ICP) did not serve the cooperative, instead, they form mandates and circulars that regulated the cooperative sector. Most often than not, memos and circulars from the government favours banks and private financing institutions because it restricts the cooperative in competing these big and rich private financing companies.

Example is the “Damayan” of the cooperative. It was regulated by the Insurance commission of the Philippines.

“Nagpalabas ng Memorandum Circular ang CDA at Insurance Commission para pagbawalan ang mga kooperatiba sa kanilang “Damayan Program.”

All cooperatives have their own “damayan” program. This is a classic form of cooperation since history. People give a certain amount of money contribution for every member who dies. It is also a form of savings capital that is used by the cooperative as its seed capital in its lending activities. This also motivates the people to become a member of the cooperative because this secures their family in case of sudden death in the family.

The law is hard but it is the law.

Despite negative impact of the government mandate, OLGCC humbly complied with the memorandum. The coop management immediately canvass an insurance company that offers similar benefits like the Damayan. The bidders were the following:

1.	Coco life 2.	PFCCO NCRL 3.	CISP 4.	CLIMBS 5.	Ayala Insurance 6.	Malayan

Unfortunately, no insurance companies offer the same benefits like the damayan benefits. But we need to follow the mandate of the law. OLGCC has no other choice but to transfer the Millions worth of “Damayan Fund” an insurance company.

Another problem is that these insurance companies do not accommodate old members beginning from 60-years old. This has brought problem to OLGCC because our members stayed with us since we started in 1967. Our old members are the most loyal to us who continued their patronage and have contributed to Damayan since the time they become members of the cooperative.

The management has no choice but to create a contingency plan to accommodate the members because of the issues that was created by the memorandum. With this, OLGCC was disheartened and feel sorry for the members.

To accommodate our old members, a resolution was made by the board of directors to reserve a portion of the Damayan fund and save it for the benefits of the old Damayan members who cannot be accommodated by the insurance company.

The Damayan fund was awarded to CISP and immediately a Members Forum was held to explain to the members regarding the mandate of the CDA. In this forum, to minimize the dismay and anger of the old damayan members, we have awarded a certificate of recognition to the oldest members of the cooperative.

Awards to Senior Members of OLGCC PINAKAMATAGAL NA KASAPI NG KOOPERATIBA (NA BUHAY PA) Virginia Abanilla;, Magdalena Alcantara; Aurelia Domingo-namatay nito lang 2012

The transfer of fund to an insurance company is a big loss to the cooperative. The Millions of funds of Damayan that are kept in banks earning interest for the coop and were used in cooperative operations are transferred to the chosen insurance company. Instead of benefitting the cooperative, it was the insurance company that benefitted from the funds. Sorry also because the amount is lesser than the benefits received in Damayan.

But after a year, this awarded insurance company created problems with the coop operations. Due to the tedious paper works and requirements that dragged the cooperative’s resources and workforce, the cooperative’s expenses increased and might incur losses. We need to cut-off the negotiations with the insurance company and look for another insurance provider.

OLGCC’s management assessed that the coops money are not being used and taken care of by the insurance providers. Upon assessment the board of director through the treasurer suggested that instead of transferring the Damayan funds, we totally scrap Damayan and create the PSF – Provident Savings Fund.

Therefore, the creation of PSF was initiated in replacement of the scrapped Damayan fund. OLGCC hired an actuarial service to assess how much premium shall be charged to members.