This month we had our Cooperative General Assembly and we got our dividends and one sack of rice as benefit of our membership. It was our 28th general assembly and I became a member for almost 13 years. Let me share to you some details about a cooperative including its benefits.
What is a Cooperative?
A cooperative is not owned by an individual or few individuals but it is owned and controlled by its members for the realization of its aspirations for both social and economical aspects. The membership to a cooperative is voluntary and open in nature. Although the "Open" term is not applicable for all because there are cooperatives that limits its members, just like our cooperative, the members are open for faculty and staff of our school.
The cooperative provides products and services decided and availed by the members and the profits will be returned to the members in terms of dividends and patronage refund.
What are the usual requirements in cooperatives?
As said earlier, membership is voluntary, so you look for legit cooperatives. The usual requirement is filling up a membership form with membership payment and your share capital for the CBU (Capital Build-Up). The share capital is usually a fixed amount for the minimum that you can pay as a whole or in staggered basis. When you reach the minimum share capital you are eligible to receive dividends. In our cooperative, we contribute at least Php 300.00 a month for our share Capital but one can decide to contribute more.
What are the benefits?
When you become a member of the cooperative you can avail all the services and products. Some cooperatives offer loans(emergency loans, gadget loan, educational loan), life and health insurance and many more. For the products, the usual are canteen and grocery store where you can buy goods. For all the services you have availed you can get a patronage refund usually every general assembly.
Also, cooperatives encourages savings by allocating some funds for the savings of its members. It can be from the patronage refund or portion of the dividend.
I have personally appreciated the benefits of our cooperative in times of emergency because I for one availed our loan services. Also in the time that I loss my mother, the cooperative has contributed financial help and it really helped us.
Can a cooperative fail?
Just like any other businesses, a cooperative may fail due to mismanagement of the management team and its officers. Cooperatives may also fail if they invest into a service/product that did not succeed. Also, if the members are not supporting or patronizing the services of their cooperatives, it would not prosper.
Our cooperative have experienced both high and low, there was a time that the debts of the cooperative members are not paid on time. Also, this time of pandemic our canteen operations stopped. But we are hopeful that in the years to come our cooperative will be more stronger.
So why invest in cooperatives?
You can start investing with a low amount and you can avail the services that you might need in times of emergency just like loans. With established cooperatives, you will really receive return of investments in due time.
Disclaimer: I am not a financial advisor, this article is based on my readings and experience.
References:
https://www.ica.coop/en/cooperatives/what-is-a-cooperative
https://ncdc.unl.edu/what-cooperative
https://bankingnsoftware.wordpress.com/2018/06/28/why-cooperatives-fails-most-of-the-times/
If you enjoyed reading this article, I would love to hear comments from you.
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