Thursday, February 28, 2008

FICCO Assists Coop Banks

What started as a small, closed-type credit union, the First Community Cooperative (FICCO) is now into helping cooperative rural banks get back on their feet.

The cooperative rural banks are supposed to be the bank of cooperatives. But in a reversal of roles, FICCO, a primary cooperative based in Cagayan de Oro City, has so far helped two cooperative banks, namely: the Misamis Occidental Cooperative Bank (MOCB) and the Cooperative Bank of Davao del Sur (CBDS).

The MOCB, which was closed by the BSP in 2003, was actually about to be liquidated by the Philippine Deposit Insurance Corporation (PDIC). In fact, the PDIC has already paid many of the small depositors. But, at the instance of then CDA Region 10 Director Manuela Pelaez, FICCO, along with Clarin National High School MPC and Paglaum MPC of Misamis Occidental, Coop Bank of Misamis Oriental, Oro Integrated Coop, Del Monte coops, PFCCO-ML of Cagayan de Oro and DEARBC of Bukidnon pooled resources together to infuse some P 12.5 million in fresh funds. FICCO’s contribution is P 9.4 million. Thus, MOCB was reopened last 16 April 2007.

This unprecedented move of resurrecting a dead bank is anchored purely on the desire to help a distressed coop, as well as the bank’s depositors. Getting some returns on the investment may take sometime considering the bank’s recent history and hazy image. This is actually also part of a grand design to create a financial system owned by the grassroots. Rabobank, a multinational bank based in Germany and the Netherlands, is actually an offshoot of the mergers of Reiffeisen credit unions of Germany and Boerlingen credit unions of the Netherlands.

Responding to another call of assistance, FICCO also infused P 10 million in fresh funds to the capital-deficient Cooperative Bank of Davao del Sur (CBDS). Laden with huge past due loans and continuing losses, the bank was about to be closed by the BSP in 2001. Under a new leadership, the leading coops of Southern Mindanao, namely, the USPD coops, SAMULCO, Silangan MPC, Panabo MPC, Kapalong MPC, Agdao MPC, BCS, JAT coop, DASURBACO and a few others, together with the Bukidnon Coop Bank, infused fresh funds to CBDS. But despite the infusion, the bank was unable to exploit its potentials until FICCO came into the picture.

FICCO saw a lot of promise in CBDS’ micro-finance programs that provide loans to very small entrepreneurs and LGU personnel. The former are considered by many as non-bankable. FICCO hopes that its involvement will hasten the emancipation of this usually neglected sector. Uplifting their economic status and bringing them to the mainstream is a challenge FICCO will always take. It is in this area that the coop has a lot of practice.

Other coop banks, whose requests for assistance are now being reviewed by FICCO, include the Coop Bank of Surigao del Sur (CBSS), Coop Bank of Zamboanga del Sur, and the Coop Bank of Camiguin (CBC).

That a primary cooperative, which started with only 17 members and P 26.30 in initial capital, has become a supporter of coop banks is indeed a remarkable feat.

FICCO actually started in 1954 as the Ateneo Credit Union, based at the then Ateneo de Cagayan, now Xavier University. Up to 1970, ACCU (the word cooperative was added to the original name in 1964) was a closed-type coop with no more than 200 members and P 184,000 in assets. In that year, it opened itself to the Cagayan de Oro community, and after ten years of hard selling, it was able to increase its membership to almost 1,000 and its assets to P 2.8 million. The name was changed to FICCCO (First Community Credit Coop) in 1978.

The next ten years (1981-1990) was the take-off decade of FICCCO. As of 31 December 1990, the coop membership reached 6,000 and total resources stood at P 33 million. In 1992, the coop turned multi-purpose and changed its name to FICCO, dropping “Credit” from its name. In a pioneering move, it started branching out also in that year. By the end of 2000, FICCO has already opened eight branches (4 in Cagayan de Oro and one each in 4 towns of Misamis Oriental), increased its membership to 24,000 and its assets to P 454 million. It also developed some five hectares of land into a housing subdivision benefiting close to 300 members.

If those accomplishments surprised many, even from within FICCO, what unfolded during that last seven years astounds many more. During this period, FICCO opened 18 more offices (5 more in Misamis Oriental, 2 in Camiguin, 6 in Bukidnon, 2 in Lanao Norte, 1 in Butuan City, 1 in Agusan del Sur and 1 in Davao City). Resources shoots up to P 2.4 billion and membership topped 103,000.

What propelled its growth is actually its unique culture that upholds or emphasizes quality service, prudent stewardship, integrity, transparency, sacrifice, low-cost/high return operations, and volunteerism among others. This culture created a positive image of the coop that converted the FICCO name into a brand. So much so that by the time FICCO opens a branch in a particular community, there are already several hundred of its residents who are already members of the nearest FICCO branch.

The commitment of the leaders, personnel and members of FICCO brings out a synergetic environment that propels its continuing growth. An average of 1,500 people joins FICCO every month and the average monthly growth in assets is P 35 million.

The high satisfaction among the members is “infectious.” Through word of mouth, the FICCO aura spreads within and among communities. It is this kind of public acceptance that positions FICCO to become a ‘rescuer’ of coop banks. (ibdaba)

FICCO Invests in Mutual Fund, Coop Guarantee Fund, Coop Banks, Coop Insurance

In a move to build an integrated financial system for the grassroots, FICCO joined the “century coops” group, otherwise known as the National Cooperative Movement (NCM) to establish a mutual fund and a deposit guaranty fund for cooperatives.

Through the guidance and encouragement of former Senator Agapto “Butz” Aquino, former Secretary of Agriculture Senen Bacani, and former PDIC President and SSS Administrator Vitaliano Nanagas, the leaders of big cooperatives in the country (Cebu CFI Com. Coop, Perpetual Help Com. Coop, NOVADECI, San Dionesio Dev. Coop, USPD Coops, FICCO and many others), in a series of meetings since November 2007, agreed to organize a coop mutual fund and a coop deposit guaranty fund.

The coop mutual fund will address the need of most cooperatives as to where to park their money. With the drastic reduction in interest rates on time deposits of banks, coops with surplus funds are desperately searching for investment opportunities to maximize return. This prompted Sen. Aquino and Sec. Bacani to spearhead the formation of a coop mutual fund, patterned after the GSIS mutual fund.

The GSIS mutual fund invested heavily in equities and, over the long term, has posted gains way higher than time deposit rates. In the initial years though up to 1999, the GSIS mutual fund lost value when the price of equities declined. But it has since performed remarkably ad recovered lost ground.

In a parallel move, the NCM also formulated guidelines for the creation of a coop guarantee fund, initially known as CODIS, or Coop Deposit Insurance System. CODIS will hopefully serve the coops in the same manner that the PDIC (Phil. Deposit Insurance Corp.) is servicing banks. It is anticipated that CODIS will assure the general public of the stability of cooperatives with the CODIS label. This will hopefully lead to a feeling of security for their funds resulting to the increase of deposits in cooperatives.

FICCO also participated in the effort to consolidate or unite all the the cooperative banks in Mindanao. With our equity investment in the Misamis Occidental Cooperative Bank, and the move to also make equity investments in the cooperative banks of Davao del Sur and Surigao del Sur, FICCO hopes to play an active, if not a leading role in the consolidation effort.

FICCO’s participation in the unification effort is anchored on a vision of building an integrated financial system for the grassroots. We look forward to the day when FICCO, just like Migros of Switzerland, Caja Laboral of Mondragon, Spain, and Rabobank of Germany and the Netherlands, will have made possible for the ordinary people to own a world-class multi-national bank. Of course, we have to start small. Let us start with the strengthening of the coop banks.

Prompted by the same vision, FICCO will also invest in the equity of the Coop Life Insurance and Mutual Benefit Services (CLIMBS). CLIMBS is a coop insurance network with more than 1,500 member-cooperatives all over the country under its wing. With the FICCO MBA already operational, FICCO will be able to provide more insurance, fidelity, assurance and guarantee services to its members.

With this move, FICCO is going into the direction taken by universal banks that invested in, if not own insurance companies, e.g. Phil. AXA of Metro Bank, Ayala Life of BPI, Malayan Insurance of RCBC, UCPB General Insurance of UCPB and Generali Pilipinas of BDO.

FICCO’s innovative and enterprising spirit lives on with the end in view of improving further the lives of its members. (IBDABA)