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Wednesday, December 18, 2002
Editorial: The cooperative challenge
'Cooperative leaders should willingly discuss in public the problems that led cooperatives to their perdition. We will never learn from their experience if we keep them like some dark family secrets.'
Philippine authorities, specifically lawmakers, should accept the challenge of overhauling the laws governing cooperatives in this country in order to prevent the rapid demise of many of them.
The challenge was hurled by the World of Council of Credit Union (Woccu) which has analyzed what the problems Philippine cooperatives.
Lois Kitsch, Woccu regional manager for Europe and Asia, said in Davao City last week that the mortality rate of Philippine cooperatives is alarming. Kitsch was referring to data from the Cooperative Development Authority stating that of the country's 64,000 cooperatives, only 37,000 remain viable. This mortality rate Kitsch is talking about is virtually non-existent in the United States and countries in Europe.
She also pointed to lack of adherence to strict credential standards and discipline as the culprit behind the increasing deaths of Philippine cooperatives.
"These dead cooperatives have been plagued with high delinquency which resulted to shortages in liquidity nd earnings that they just dry up and fade away, " she said succinctly.
Indeed, according to Kitsch, employing financial discipline involves improvement of earnings, delinquency control, ensuring high liquidity, management, and control of non-earning assets.
Our lawmakers should listen to Ms Kitsch very intently. We should learn very hard lessons from the recent closure of cooperatives bruited about to be very stable until we heard about their collapse.
For instance, the demise of the Davao City Cooperative Bank of Davao City and another cooperative in Tagum City also accepting deposits like a bank made big headlines that once again obliterated whatever credibility was left of cooperativism.
Cooperative leaders should willingly discuss in public the problems that led cooperatives to their perdition. We will never learn from their experience if we keep them like some dark family secrets. |
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