Lessons from a well-managed co-op

TACLOBAN CITY, Philippines—Public school teacher Teresita Bautista cannot remember how many times she has borrowed money just to make both ends meet.

Before, she would run to a loan shark and close her eyes on the exorbitant interest rates just to solve her immediate need for money.

But now, she and the rest of the 480 teachers of the Leyte National High School (LNHS) no longer have to fall prey to these unscrupulous loan sharks.

They can turn to the LNHS Multi-Purpose Cooperative to help them tide over their financial difficulties at a lower interest rate.

The LNHS-MPC was put up in 1983 by 40 LNHS teachers as a nonlending cooperative to address their basic necessities especially during hard times.

Mini grocery

They contributed P300 each as start-up capital for a mini grocery inside the school. Cooperative members could buy grocery items on credit.

In December 1992, the cooperative decided to go into money lending upon the prodding of then school principal Patria Yutangco in order “to help the teachers on their financial needs,” said Romeo Mobolo, LNHS-MPC chair.

“This way, she told us, we would no longer run to a lending institution which offers exorbitant interest rates,” said Mabolo, 55, one of the original members of the cooperative. He assumed position as chair in February 2008.

At that time, the cooperative had only P30,000 although it was registered with the Cooperatives Development Authority.

The cooperative took Yutangco’s advice. It turned out to be a wise business move.

After 28 years, the LNHS-MPC has grown into one of the most established cooperatives in Eastern Visayas with assets of more than P20 million.

It now has 342 members, 50 of them nonteaching personnel of the LNHS.

It also has a credit line of P10 million from the government-owned Land Bank of the Philippines.

But more than anything else, the cooperative has saved the LNHS teachers from loan sharks who took advantage of their financial difficulties.

“Whenever I am in need of money, all I have to do now is visit our cooperative office and apply for a loan,” said Bautista, an English teacher.

Big help

She and husband Jedduh, 57, who works as LNHS supply officer, can barely sustain the needs of their four children, one of them a student of medicine.

Mabolo said he too was a favorite “client” of the cooperative because he had secured several loans just to survive the daily grind.

“The cooperative is really a big help, a blessing to us teachers. It helps somehow to ease our financial burden,” said Mabolo, who has been a teacher at the LNHS for 30 years. He is handling the Teaching and Livelihood Education (TLE) subject.

School principal Miguel Daguinod, 62, said the cooperative has been a big help to the LNHS teachers.

“I myself has benefited from it. I have secured loans at the cooperative countless of times,” Daguinod said.

“Whenever I need money, I don’t have to worry where I will go. All I have to do is apply for a loan at the cooperative and, my financial problem is solved,” he added.

The LNHS-MPC offers an interest rate of two percent per month—lower than the 20-percent interest rate collected by loan sharks to teachers.

The loan is also payable up to 36 months, depending on the loaned amount.

To become a member, an LNHS teacher will have to put up P2,500 in deposit as start-up investment to the cooperative.

Members can avail of educational and hospitalization loans. The cooperative also offers a calamity loan of P10,000 to the families affected by the recent flood in Tacloban City and other areas in the province.

It also offers a kabuhayan (livelihood) loan by as much as P100,000.

The cooperative has a “redeem-a-pawn-policy” that allows the LNHS-MPC to redeem the items pawned by a member. The cooperative charges a two-percent interest on the amount paid to recover the item.

Mabolo said that just like any organization, their cooperative encountered a rough start.

“For one, some of our teachers did not believe that we can survive. Some chose other cooperatives,” he said.

Although they were hurt, he added they opted to move forward. With determination and courage of the members, they were able to succeed.

“Of course, we have to give credit to our members for patronizing the cooperative and for being a good member,” Mabolo said.

He admitted that it never crossed their minds that the cooperative, which ran a small grocery inside the school, would get big.

“It really boosted our morale and changed the lifestyle of some of our members as they would no longer secure loans from the outside offering high interest rates or sell items to their students …” said Mabolo.

As of now, the cooperative only services the teachers of the LNHS-MPC. But it plans to expand its membership to teachers in other schools in Tacloban and even some parts of Leyte and Samar.

Many teachers in other public schools cannot wait for the LNHS-MPC to expand.

One of them was Lemuel Pagliawan, a science teacher at the San Jose National High School Tacloban, who, this early, said that being a member of the cooperative could indeed help him financially.