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(NAR) VOL. IV NO. 4 / OCTOBER-DECEMBER 1993
[ CDA RESOLUTION NO. 39, s. 1993, February 19, 1993 ]
COOPERATIVE SUPPORT FUND (SAMAHANG NAYON SUPPORT PROJECT) POLICIES AND PROCEDURES
The Samahang Nayon Support Project (SNSP) was formerly implemented/administered by the Bureau of Agricultural Cooperatives Development (BACOD) and transferred to the Cooperative Development Authority in compliance with Section 10 of Republic Act No. 6939.
The project started its operation in January, 1979 and was implemented nationwide specifically in the provinces of Camarines Sur, Pangasinan, Tarlac, Occidental Mindoro, Bulacan, Aklan, North Cotabato, South Cotabato, Iloilo, Laguna, Batangas, Sorsogon, Leyte and Palawan.
The project is now known as the Cooperative Support Fund.
The program funds came from USAID in the amount of P4.719 Million and a GOP counterpart of P2.723 Million or a total of P7.442 Million. NEDA authorized BACOD to utilize the collection for reloaning.
Generally, the project aims to develop and pilot test a viable and realistic package of support service technology which will provide SNs, now primary cooperatives, both direct and indirect socio-economic benefits to farmer-member beneficiaries of agrarian reform. Its specific objectives are:
1. To determine to what extent primary cooperatives can exhibit the capability to provide viable support services to their members.
2. To provide a channel for new agricultural technologies to be field-tested for both profitability and farmer receptivity.
3. To determine which farmer support system, and/or mechanism is appropriate to meet the members' basic needs.
4. To develop a network of services within the cooperative which will allow for effective division and decentralization of various program activities and responsibilities.
The project was conceived to pilot test the efficacy of making primary cooperatives undertake economic projects for the benefit of the members. The basic loaning policy is to provide funds in the form of loans to finance the needs and purposes of identified projects at reasonable terms and conditions.
The following are the types of loans that may be extended under the CSF:
1. Marketing Loan — for the purchase of members' produce and for the procurement and distribution to farmer/members of farm inputs such as fertilizers, insecticides, seeds, palay trading and other marketing activities.
2. Facility Loan — for the purchase of light and locally produced farm equipment such as rice thresher, handtractor, etc.
3. Land/Building Loan — for the purchase of land/materials for the construction of multi-purpose office/bodega.
4. Merchandising Loan — for the purchase of consumers goods.
5. Operating Loan — to finance the administrative and operating expenses to support the economic activities of the borrower.
Duly registered primary cooperatives undertaking economic activities which are not recipients of financial assistance from private or government lending institutions.
1. Amount of Loan — The amount of loan shall be based on the actual needs of the project but not to exceed P100,000.00. The borrower shall be required to provide counterpart (equity contribution) minimum of 15% of the cost of the project.
2. Security of the Loan — The existing assets of the cooperative and the assets to be acquired out of the proceeds of the loan.
3. Interest Rates —
1. Marketing/Operating Loan — not less than eight percent (8%) per annum.
2. Land/Building Loan — not less than eight percent (8%) per annum.
3. Facility Loan — not less than six percent (6%) per annum.
4. Terms and Repayment —
1. Marketing/Merchandising Loan — payable within a period of one (1) year.
2. Operating Loan — One (1) year to 2 years to be paid in equal quarterly amortizations including interest.
3. Facility Loan — 3 to 5 years to be amortized semi-annually including interest.
4. Land/Building Loan — 5 to 10 years with a grace period of one (1) year on the payment of principal. Computation of interest will start on the first year.
1. Duly accomplished application for loan form to be supported by the following documents:
1. Project feasibility study
2. Resolution of the cooperative's General Assembly signifying their intention to apply for a loan (amount and purpose) and the officers authorized to negotiate and enter into contract for financial assistance;
3. Certification of the Area Extension Office Director, CDA that the cooperative is registered, operating and in good standing;
4. Listing of cooperative officers including addresses, signatures and expiration of terms and Certificate of Incumbency by CDS and attested by Area Director.
5. Latest financial statements and audited annual financial statements.
6. Certified xerox copy of Certificate of Registration/confirmation, By-Laws and Articles of Cooperation.
1. The borrowing cooperative shall file application for loan together with all supporting documents with CDA Area Extension Office.
2. Preliminary processing, review and evaluation on the application will be conducted by Area Extension Office. Upon positive result of evaluation on the loan application, the AEO shall indorse the application together with supporting documents and result of evaluation to the Cooperative Finance Group (CFG), local counterpart in the Extension Office.
3. The CFG, Institutional Development Department, CDA Central Office receives and further evaluates the loan application. Field credit investigations when necessary are conducted by CFG to determine the following:
a. actual purpose of the loan.
b. eligibility of the borrowing cooperative.
c. viability and feasibility of the project.
d. existing accounting system and procedures.
4. The CFG through the OED recommends approval/disapproval of the loan application to the Board of Administrators taking into consideration the evaluation made by the extension office and its own credit investigation.
The proceeds of the loan are released by the CFG/IDD by telegraphic transfer from the CDA depository bank to local branch in the area where the cooperative applicant conducts its business activities. A board resolution designating the cooperative bank or any commercial bank/rural bank in the locality and the bank's acceptance must also be submitted to CDA before the funds are released.
The funds released shall remain in a savings deposit account of the cooperative borrower with the designated bank. When the project is ready to operate, disbursements shall be authorized by CFG.
In case the loan is for the purchase of post harvest facilities like thresher, the delivery receipt shall be signed by the authorized official of the borrower together with the Certificate of Acceptance.
If within 60 days from the release whereof, the funds are not utilized for the purpose of the loan, the CDS assigned in the area has to communicate with CDA/IDD if there is any change in the project or deferment due to justifiable reasons. Otherwise, the loan is recalled by the CDA.
Adopted: 19 Feb. 1993
Chairperson