I. Title: A Draft Policy On credit / Lending application of CSMPC
1. To generate funds and extend credit to the members for productive and provident purposes (Article 6 (2) of R.A. 9520); 2. To provide goods and services to its members to enable them to attain increased income, savings, investments, productivity and purchasing power, and promote among themselves equitable and distribution of net surplus through maximum utilization of economies of scale, cost-sharing and risk-sharing (Article 7 (a) Objectives and Goals of a Cooperative); 3. To provide optimum social and economic benefit to its members (Article 7 (b) of R. A. 9520) (Article 7 (b) Objectives And Goals of Cooperatives); 4. To insure against losses of the members (Article 6 (7) of R.A. 9520); 5. To ensure that all cash collections are deposited in accordance with the policies set by the Board of Directors (Article V, Section 7 (3) (a) of the Cooperative Bylaws); 6. To ensure that the Treasurer shall have the custody of all funds, securities, and documentations relating to all assets, liabilities, income and expenditures and such other functions as may be prescribed in the Bylaws or authorized by the General Assembly (Article V, Section 7 (3) (b-f) of the Cooperative Bylaws); 7. To provide assistance to members who shall avail the credit/loan and other financial assistance and services to its members for productive and provident purposes (Article 23 (a) of R.A. 9520).
A. Definition of Terms:
1. Share Capital refers to the unit of capital, the value of which is stated in the Articles of Cooperation (Article IX, Section 7 of the Cooperative Bylaws); 2. Capital Paid-Up shall refer to the money of a member deposited in the cooperative; 3. Time Deposits refer to the a fixed period of time for a fixed rate of interest may be accepted by the cooperative (Article IX, Section 3 (b) of the Cooperative Bylaws); 4. Members shall refer to the legally registered members of the cooperative as provided in Article III, Section 1 of the Articles of Cooperation of CSMPC); 5. Loan Officer refers to the assigned officer in Lending Division to process the Loan Application Form of members; 6. CRECOM shall refer to the committee to check and validate the share capital and accounts payable by the members; 7. Manager shall refer to the Chief Executive Officer of the entire operations of the cooperative (Article V, Section 14 of the Cooperative Bylaws; 8. BOD, Chairman shall refer to the head of the Board of Directors who formulates policies in the cooperative; 9. Collateral is a borrower’s pledge of specific property to a lender, to secure repayment of a loan. ( Wikipedia.) 10. Charges on loan shall refer to agreed upon interest rate, service charge, penalty, discount, and such other charges incidental to lending activity (R.A. 9474, Rule 2 (g)); 11. Debtor shall refer to a borrower or person granted a loan by a lending company (R.A. 9474, Rule 2 (h); 12. Co-Maker is a person, natural or juridical who binds himself jointly to just guarantee in the payment of loan of the primary debtor; 13. Social Audit refers to the Cooperative Committee to assess the cooperative social impact and ethical performance vis-à-vis stated mission, vision, goals and code of social responsibility.
B. IMPLEMENTING Guidelines and Procedures:
1. Only the registered Members In Good Standing (MIGS) of CSMPC Consumer and at the same time a registered member of the Lending Division shall avail the credit/lending program of the cooperative; 2. An applicant must sign the Lending Application Form (LAF) which will be provided by the Loan Officer as scheduled by the Lending Division. Prior to signing the said form, the applicant will be informed in the terms and conditions in credit/lending program as stated in the Terms and Conditions Form (TCF); 3. The Lending Officer shall forward the duly accomplished Lending Application Form (LAF) to the Credit Committee (CRECOM); 4. The Credit Committee (CRECOM) is in charge for the checking and validation of member’s Share Capital and or Capital Paid-Up, and Accounts Payable both in Consumer and in Credit/Lending divisions. The CRECOM Chairman shall sign the form right after of his/her thorough evaluation of member’s share capital and liabilities in the current fiscal year; 5. After a careful evaluation of member’s current accounts and or liabilities, the member shall be informed by the CRECOM Chairman of whether he/she could avail the proposed loan and if he/she is qualified, therefore, a collateral is to be personally checked and shall be carefully evaluated by the Loan Officer. The Loan Officer shall sign the form and ask the member-applicant to look for a registered member that would serve as a co-maker or guarantor of the said loan; 6. The manager shall re-check and re-validate the credit/lending application of the member and shall sign the form for approval; 7. All Lending Application Forms shall be signed by the Chairman of the Board of Directors. 8. After the Lending Application Form (LAF) has fully signed by the Member-Applicant or Debtor, CRECOM, Loan Clerk, Co-Maker, Manager, Chairman of the Board of Directors, the Treasurer must disburse the approved loan amount to the Member-Applicant himself/herself. And the disbursed loan amount shall be reflected in the Cash Disbursement Voucher signed by the Debtor and the Treasurer stating for the purpose of Credit or Lending Disbursement (Article V, Section 7 (3) (b-f) of the Cooperative Bylaws); 9. The Treasurer shall provide one (1) copy of the Lending Application Form (LAF) to the Debtor; one (1) copy to the Loan Clerk (LC); and one (1) copy to the Audit Committee (AC) considering the Policy on Social Responsibility (Section 2, IRR of R.A. 9520, otherwise known as the Cooperative Code of 2008).
C. Penalty of Violation:
Anybody who violates this policy shall be liable for Written Reprimand in the first offense; Oral Reprimand in the Second Offense; and Suspension from Work in one regular working day without pay in the Third Offense. Beyond these violations stated is subject for Involuntary Termination as stipulated in Article III, Section 9 (c) (ii) and (iii) that state … When he/she has continuously failed to comply with his/her obligations and when he/she has violated any provision of this By-laws and the rules promulgated by the cooperative as provided by Republic Act 9520.
IV. Separability Clause:
Should any part of this policy is found inconsistent with existing laws, rules, and regulations, the remaining guidelines and procedures hereof shall remain in full force and effect.
The General Manager shall oversee the overall day to day business operations of the cooperative by providing general direction, supervision, management and administrative control over all the operating departments subject to such limitations as may be set forth by the Board of Directors or the General/Representative Assembly (Rule 7, Section 4.9).
This policy shall take effect fifteen (15) days following the approval of the Board of Directors and posting of this policy in three (3) public areas where the cooperative operates.
Article 6 (2) of R.A. 9520 Philippine Cooperative Code of 2008 Article 6 (7) of R.A. 9520 Philippine Cooperative Code of 2008 Article 7 (a-b) of Objectives and Goals of a Cooperative Article 7 (b) of R. A. Philippine Cooperative Code of 2008 Article V, Section 7 (3) (a) of the Cooperative Bylaws of CSMPC Article V, Section 7 (3) (b-f) of the Cooperative Bylaws of CSMPC Article IX, Section 7 of the Cooperative Bylaws of CSMPC Article IX, Section 3 (b) of the Cooperative Bylaws of CSMPC Article III, Section 1 of the Articles of Cooperation of CSMPC Article V, Section 14 of the Cooperative Bylaws of CSMPC R.A. 9474, Rule 2 (g) IRR Lending Company Regulation Act of 2007 R.A. 9474, Rule 2 (h) IRR Lending Company Regulation Act of 2007