HISTORY

OF
COOPERATI
(INTERNATIONAL)
VES

In

The history of mankind,

in a large part, is the
struggle for security
against poverty.
many parts of

AFRICA
ASIA

LAT
IN
AM
E

it is a battle against debt or

credit.

RIC
A

Ancient writings show that

credit and interest have
been mankinds problems
for more than 4, 000
years.
Interest is considered rent paid for use of
other peoples money. However, the poor have
always to reckon with excessive rates and
harsh term of interest in their times of need.
They have always been the victims since
earliest times.

IN 2000
BC
Hammurabi as
King of
Babylon
included
Some laws on credit to promote the welfare of
the common people against high interest rates
by few money-lenders.

In England, concern for the miserable conditions

of the workers associated with the industrial
revolution led to two known experiments on
cooperatives.
Robert Owen of Wales in his New
Lanark Mill community and
William King of Brighton in his
writings maintained that

individual competition is an evil which does

not benefit the people.

They advocated that cooperation is needed

to achieve results that will benefit all. The
other experiment which reached more
people and had more success and lasting
influence was the
Rochdale Cooperative Store in 1844.

Rochdale Equitable Pioneers Society - The

industrial Revolution completely changed the
lives of people living in Europe. Together with
progress, it brought misery. Many left the
countryside to work in factories for long hours
with little pay. There was no state help, no
sickness benefit and no free education. Among
these exploited were children who worked long
hours in the factories instead of going to
school. Soon there was famine. In history this
was often referred to as the
Hungry Forties(1840s).

It was at this time that a group of 28 people met together to

discuss what they could do to ease their suffering. It was
Saturday afternoon in 1843 in the town of Rochdale, England.
One member of the group, Charles Howarth, suggested that
each of them save two dimes a week and use their savings to
start a little store of their own. They could buy their goods
cheaper at whole sale prices. Someone objected by pointing
out that it had been tried but failed. Further analysing the
problem, they discovered that previous ventures failed
because customers were allowed to buy goods on credit. Most
often they could not pay their debts so that time came when
the store had to close for lack of money to pay whole sale for
goods ordered. To solve the problem, there was a suggestion
to make a rule of paying cash for everything bought. Then they
will always have cash to pay the wholesale.

HISTORY
OF
COOPERATIVES
(PHILIPPINES)

After defeating Spain in 1898, the United States

acquired the Philippines as a colonial territory. In
introducing western civilization to the country, the
United States included the idea of credit unions.
In the fact, Edward Filenes first thought after
observing Credit Unions in India in 1907, was to
introduce it to the Philippines which was a newly
acquired Asian territory of the USA. Later,
missionaries to the by succeeded in introducing
the movement.

The Vigan Credit Union

which was organized in
1938 by Rev. Allen Huber, a
Protestant missionary, was
a proof of this. He
organized over 30 Credit
Unions before he and his
wife were taken prisoners
by the Japanese in World
War II.

Even before the advent of

missionaries in the Philippines
several attempts were made by
the Filipinos to introduce Credit
Unions to their fellowmen. Among
them was Dr. Jose Rizal who
must have seen them work
during his travel in Europe. He
tried to introduce it in Dapitan
when he was exiled by the
Spanish government.

In 1907, Governor Teodoro

Sandiko of Bulacan drafted a bill to
organize Credit Unions patterned
after those of Raiffeisens.
Presented 1908 by Rep. Alberto Baretto of
Zambales

it was approved by the Philippine Assembly (Lower

House of the Legislature) but failed to get the
approval of the Philippine Commission (Upper
body of the Legislature).
The second attempt to institutionalize rural credit
cooperatives was through Act. No. 2508 it met
success for it was passed in both Houses of the
Philippine Legislature. However, lack of
cooperative education and training resulted in its
poor implementation.

In 1952, the Agricultural Credit and

Cooperative Financing Administration
(ACCFA) were created by Republic Act
821 to the Agricultural Credit
Administration (ACA) in taking over
ACCFAs functions reported that as of
700 Farmers Cooperative Marketing
Associations (FACOMAS) that ACCFA
organized, only 120 were operating.
Republic Act No. 2023 enacted in 1957
sought to promote, organize and
supervise all types of non-agricultural
cooperatives. Records, however, showed
that in 1971, of the total registered 4673
cooperatives only 633 were reported
active.

All the sad experiences on

cooperatives were due to a
large extent to insufficient
cooperative education and
experience and the lower
standard of living caused
by the war. The advent of
Martial Law in the country
in September, 1972
sought to remedy the
situation.

Presidential Decree 175 entitled

Strengthening the Cooperative
Movement provided the basis for a
sound and systematic program. It sought
to make cooperative a means of affecting
income redistribution so that they were tied up
with the land reform program. It required
attitudinal change by emphasizing learning,
discipline, and saving. Believing that
cooperatives should be started by the mass
base, the then Bureau of Cooperatives
introduced the Samahang Nayon Stage. Only
after meeting the requirements of at least 250
members and pooled savings in shares worth
at least P25 000 000.00 can the Samahang

As of December, 1974, the cooperatives

development program had reached 71 out of
the 73 target provinces. It covered 22, 808
barrios with a total collection in shares and
savings of P23 803 251. 05. The average
membership per Samahang Nayon was 46 with
an
collection
of p1included
952.67. the
Theaverage
cooperatives
program
establishment of the following development
projects.
Cooperative Insurance System of the
Philippine (CISP)
Area Marketing Cooperatives (AMC)
National Publishing Cooperative (NPC)
Cooperative Rural Bank (CRB)

Since 1915 (Republic Act 2508 providing for

Agricultural Credit Cooperative Associations),
many laws have been passed including P.D.
175 in 1973. On March 10, 1990, Pres. Corazon
C. Aquino signed into law R.A. 6938 the New
Cooperative Code of the Philippines and R.A.
6939 The Act Creating the Cooperative
Development Authority (CDA).
It was hoped that the enactment of these new
laws would pave the way for the accelerated
growth and development of Cooperatives in the
Philippines. The new laws simplified and
synchronized the registration and
administration of cooperatives of all types.

Credit Unions were born of

adversity amidst an atmosphere
of extreme poverty in Europe.
Just who started them is vague. It
is believed that in France,
Buchez, Proudhon, and Louis
Blanc as early as 1796, in their
discussion first evolved the
cooperative idea.

A cooperative federation is formed

primarily to engage in business
needed by its member cooperatives.
Membership in a federation requires
primary cooperatives to invest or give
capital contribution to be used by the
federation in its business operations.
Members of a federation equitably
receive share of the net surplus based
on their transactions or economic
participation.

A cooperative union engages in non

business or non-surplus
generating services that are needed
to build the institutional capability of
cooperatives and to strengthen the
movement in general. Examples of
these services are representation of
members in various for a, advocacy
work, information dissemination,
research, education, publication and
networking. A union may raise funds
from private and government donors.

What are COOPERATIVES?

COOPERATIVE
A CO-OPERATIVE is an
autonomous association of
persons united voluntarily to
meet
their
common
economic,
social,
and
cultural
needs
and
aspirations through a jointlyowed and democraticallycontrolled enterprise.

Biblical Foundation of
Cooperatives
Acts 4:32-34

All the believers were one in heart and

mind. No one claimed that any of his
possessions was his own, but they
shared everything they had. 33 with
great power and apostles continued to
testify to the resurrection of the Lord
Jesus and much grace was upon them
all. 34 There were no needy persons
among upon them. From t time to time
those who owned lands or houses sold
them, brought the money from the
sales and put it at the apostles feet
and it was distributed to anyone as he
had need

Main characteristics of
Coop Enterprise
Owned and controlled
by members who use
its services
(identity of owner &user)

Has both
economic and
social purpose

DISTINGUISHING COOPS FROM

OTHER BUSINESS

COOPS

Main purpose is to provide

service & savings to
members.
Essentially union of persons.
Control is democratic; each
member has one vote
Ownership in the hands of
members who use the service
Surplus refunded to
members in proportion to

OTHER BUSINESS
Main purpose is to make
profit for investors
Essentially a union of capital
Control is based on
number of voting shares
Ownership in the hands
of investors
Surplus allocated in
proportion to investment
Shares may be freely traded
& fluctuate in value

PHILOSOPHY
Not for PROFIT not for
CHARITY but for SERVICE

Section 12
Constitution and
By-Laws

Services over and above profit shall be

overriding
consideration
of
the
cooperative in the pursuit of its goals
and in the operation of its business.

ANCHORS OF DECISION
IN MAKING COOPERATIVES
International Coop-Alliance
Principles and Practices
RA 6938
CDA/DOF Manual of Regulations
Art of Cooperation/Constitution and
By-Laws
Coop Policies and Procedures
Rules and Regulations

Government
Regulations
Dole
SSS/Philhealth
LGU-Permits
HDMF
BIR-Taxation

Membership Control. Subject to

provisions of RA 6938 and the
rules and regulations prescribed by
the authority, the final decision in the
management and administration of
the affairs of the cooperative is vested
in the General Assembly.
GENERAL ASSEMBLY. The General Assembly of
the cooperative is composed of all the members
entitled to vote duly assembled and constituting a
quorum. In the case of cooperatives with numerous
and dispersed membership, the general assembly
may be composed of delegates elected by each
sector, chapter or district of the cooperative in
accordance with the rules and regulations of the
authority.

Subject to RA 6938, relevant rules

and regulations, the GA is the
supreme body where all authorities
emanate from

GENERAL
ASSEMBLY
AUDIT
COMMITTEE
Conducts
financial,
management,
property and
social audit

Prepares minutes
and safe keeps of
official
documents
Performs study
function for the
BOD Ad Hoc

ETHICS MEDIATIO/
CONCILIATION
COMMITTEE

Decide intracooperative
disputes, sets

BOARD OF
DIRECTOR
Sets
Sthe

ELECTION
COMMITTE
E for
Prepares

strategic
direction and
formulates
policies

and facilitates
the conduct of
election

SECRETARY

TREASURER

SPECIAL
COMMITTEE

EDUCATION
AND
MEMBERSHIP
COMMITTEE

Manages the dayto-day operations

CREDIT
COMMITTE
E

Processes and
decides on loan
application*
Applicable for coups
with credit services*

In-charge of overall
financial
management of the
coop and acts as
chief financial
officer
Plans and
implement s
education and
training programs

GENERAL
MANAGER
MANAGEMEN
T STAFF

Performs specific
tasks related to the
day-to-day
operations

UNIQUENESS OF COOP AS
BUSINESS ENTERPRISE
1. Big Business
Those Who Own

Those Who
Control

Those Who Use

Investors

Management

Costumers

2. Small Scale Business

Those Who Own and
Control

Those Who Use

3. Cooperatives
The same body of people who own, control
and use the service

 Illustrative Examples
Corporation
e.g. San
Miguel
Corporation
Variety Store
e.g. Nana's
Sari-sari store

Cooperative

Owners

Controlle Costumer
rs
s

Stockholders

Management

Owner [Nena]

Member

General Public

Owner [Nena] General Public

Member thru
the GA elect
BOD and
Committees
who manages
the coop

Member

Coops Do All
Types of
Economic
Activities
Financial services
retail, insurance, agricultural production &
marketing, industrial production, fisheries,
dairy, housing, transport, utilities
(electricity, water, gas, etc.), travel, other
services.

New generation coops

medical, child, care, social
care, funeral, tourism, sports,
schools, orchestras, etc.

TYPES OF COOPERATIVES
Credit Cooperative is
one which promote thrift
among its members and
creates funds in order to
grant loan for productive
and provident purposes;
Consumers cooperative is one of
the primary purpose of which is to
procure and distribute commodities
to members and non members;

Producers Cooperative is
one that undertakes joint
production whether
agricultural or industrial.
Marketing Cooperative is
one which engages in the
supply of production inputs
to members and markets
their products;
Service Cooperative is one which
engages in medical and dental care,
hospitalization, transportation, insurance,
housing, labor, electric light and power,
communication and other services;

Multipurpose Cooperative
is one which combines two or
more of the business
activities of these different
types of cooperatives.
Workers Cooperative is a
type of cooperative which
creates work through
collective self-employment

PRINCIPLES AND
PRACTICES
PRINCIPLES
an embodiment of
ideas that determinate
the essential
characteristics of an
organization,
distinguishing it from
all other organizations.

PRACTICES
a specific and practical
application of a principle
developed and agreed on
among co-operators of a
given country.
Practices are in accordance
with unique conditions and
circumstances, and thus
may vary as to both time
and space. In no situation
however should a practice
run counter to the essence
of a given principle.

CO-OP VALUES
Co-operatives are based on the values
of self-help, self-responsibility,
democracy, equality, equity, and
solidarity.
In the tradition of their founders, cooperative members believe in the ethical
values of honesty, openness, social
responsibility and caring for others:

1.Self-help
- the act of helping of improving
yourself without relying on
anyone else
-All people can and should strive
to control their own destiny
-Full individual development can
take place only in association
with others .
-Members need to help
themselves

2. Self-responsibility
(fact of being responsible)
Members have
responsibility :
-for the establishment and
continuing vitality their cooperative
-for ensuring that their cooperative remains
independent
-of promoting their cooperative among their
families, friends and
acquaintances

3. Democracy
(rule by-for-of the people or
political authority)
-includes considerations of
rights and responsibilities
of members
-participation in the
decision-making in the
general assembly,
members/ ownership
meeting

4. Equality
(likeness or
sameness in quality,
power, status or degree)
-members

5. Equity
(the state, quality, or
ideal of being just,
impartial, and fair)

have rights of
participation, information, a
-Members should be
right to be heard, and making equitably rewarded for
decisions.
their participation in the
co-operative, through:
-Patronage dividends
-allocations to capital
reserves in their name
-reduction in charges

6. Solidarity
(a union of interests or purposes or sympathies
among members of a group, interdependence)
-

means that co-operators

and co-operatives stand
together
-members have the
responsibility to ensure
that all members are
treated as fairly as
possible

7. Honesty
(quality of being honest; integrity)
-Honest dealings with members such
as honest measurements, high
quality, fair prices and calculation of
interest payments.
-coops are distinguished in the
market-place partly because they
insist on honest measurements, high
quality, and fair prices.
-co-operatives have aspired honest
dealings with their members, which
in turn has led to honest dealings
with non-members

8. Openness
(an attitude of ready accessibility, not
secretive)
-reports to the General
Assembly
-conducts consultation
-accepts suggestions

-regularly reveals to their

membership, the public
and government
important information on
their operations

9. Social Responsibility
(the idea that businesses should not function
immorally, but instead should contribute to the welfare
of their communities)
-they are open to the members of the community, and
they have commitment to assist individuals in helping
themselves
-concerned about the health
of individuals within the
community.
-they therefore, have an
obligation to strive to be
socially responsible in all
their activities

10. Caring for others

(assisting/helping other coops)
-within their financial
capacity to do so, many
cooperatives have made
significant contributions of
human and financial
resources to their
communities.
-big coops have provided
extensive assistance to the
growth of cooperatives
throughout the developing
world.

PRINCIPLES
1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
5. Education, Training and Information
6. Co-operation Among Co-operatives
7. Concern for Community

First Principle: Open and Voluntary

Membership

Cooperatives are voluntary organizations, open

to all persons able to use their services and
willing to accept the responsibilities of
membership, without gender, social, racial,
political or religious discrimination.
Practices:

-No compulsory membership

-No discrimination against any person on
account of religion, race or political belief.

Second Principle:
democratic
organizations controlled by their members, who
Co-operatives are

actively participate in setting their policies and

making decisions. Men and women serving as
elected representatives are accountable to the
membership. In primary Co-operatives members have
equal voting rights ( one member, one vote) and Cooperatives at other levels are organized in a
democratic manner.

Practices:
-One man, one vote & No proxy voting
-General assembly as supreme authority
-Decision-making by majority vote
-Direct or indirect participation of all members in the control
of the organization (i.e. through the election of officers,

Third Principle: Member

Economic Participation

Members contribute equitability to, and democratically

control, the capital of their Co-operative. At least part
of that capital is usually the common property of the
co-operative. They usually receive limited
compensation, if any, on capital subscribed as a
condition of membership. Members allocate surpluses
for any or all of the following purposes; developing
the co-operative, possibly by setting up reserves , part
of which at least would be indivisible; benefiting
members in proportion to their transactions with the
co-operative, and supporting other activities approved
by the membership.

Practices:

-Limited interest on share capital

-Limitation of individual share
contribution, not more than 20% of
total capital
-Provision of reserve funds
-Provision of reserves for the
development of the coop
-Distribution of interest on Capital
and Patronage refund

Fourth Principle Autonomy and

Independence
Co-operatives are autonomous, self-help organizations
controlled by their members. If they enter
into
agreement
with
other
organizations,
including
governments, or raise capital from external sources,
they do so on terms that ensure democratic control of
their members and maintain their co-opreative
autonomy.

Practices:
-The General Assembly is the coops supreme
authority.
-Leadership is confined to the coop members.
-The control and leadership is through members
democratically -elected to high responsibilities and
the independence of the coop remains even when
the coop becomes involved with other organizations
such as funding agencies.

Fifth Principle: Education,

Training and Information
Co-operatives provide
education and training for
their members, elected
representatives, managers
and employees so that they
can contribute effectively to
the development of their cooperatives. They inform the
general public- particularly
young people and opinion
leaders- about the nature
and benefits of co-operation.

Practices:
-Appointment of an education committee
-Provision of an education fund out of net
income or from gross income
-Requirements of pre-membership education
before admission
-Ownership or membership meetings
-Continuous training of officers and staff.

Sixth Principle: Cooperation

Among Cooperatives
Cooperatives serve their members most effectively and
strengthen the co-operative movement by working
together through local, national, regional and
international structures.

Practices:
-Membership in secondary and tertiary organization
-Participation in economic integration projects, like
central fund, inter-coop trade, cooperative insurance,
local, national, regional and international linkages.

Seventh Principle:
Co-operatives work for the sustainable
development of their communities through
policies accepted by their members.

Practice:
Members ensure that the policies they make
will benefit the whole cooperative community
(work towards improving their living standards
based on their social values without
compromising the resources available for
future generations)

Koop Aralan (overview)

There is one reality in
cooperatives that many of us
already know but which is
not given much importance:
Many rank and file staffs
This often results in
low no
morale,
low
have
or very
little training
commitment of theon
staff
while performing their
cooperatives.
jobs in the cooperative. To address this, the
Coop Institute has developed the KoopAralan
program. This project aims to provide training to
the coops rank and file, who are mostly left out
of training programs (most programs are
directed to managers and elected officers).
These training programs will be delivered
through distance education, reaching a wide
audience simultaneously across the country.
The education materials of KoopAralan are in the

Specifically, the KoopAralan:

Equips enrolees with working knowledge in
coop. Modules are divided into sub-modules:

Time and reader friendly

Can be completed on weekly basis
Institutionalizes staff training with merit
system Is part of staff development program
Is short-term, ladderized system of education
Is evidenced by a certificate of Completion to
be issued by Coop Institute

Features
-A distance education course designed to
imbue the staff with coop knowledge needed to
make them appreciate and value their work in
the cooperative.
-This is a program designed to institutionalize
staff training at the coop level, involving the
Human Resource staff and the coop Training
Coordinator as the lead mentors.
-This can be considered a foundation for a longterm staff development program in the coop.
-It is short-term, ladderized system of
education.

-Modules are divided into sub-modules which is

time friendly to enrolees as they can be

read/absorbed on a weekly basis.
-The modules can be completed within two to
three months depending on the pace of students.
-After each module, a test will be given to the
enrollee to ascertain if the enrollee is ready to
proceed to the next module; passers shall be given
a certificate of module completion issued by the
Coop Institute.
-The certificate of course completion can be used
as basis for staff evaluation as it can carry
additional merits for career advancement,
personal growth, promotion and salary increase.
-The Coop Institute will provide the participating
coop with the grades of its enrollees.

1.

PROCEDURES