Professional Documents
Culture Documents
system to take care of recording of transactions on a day to day basis. However due to the
increase of its members, the cooperative demands for a system in which it will improve
the registration of the members, application of loans, as well as the monitoring and the
update of loans. The research group plans to establish an electronic accounting system to
simplify the recording tasks of the cooperative which focuses on the aging of accounts
loan approval procedures. Through this the PBDMPC is planning to undertake the task of
strengthening the cooperatives from within. Given the fact that several cooperatives have
the weakness in control of its credit policies and monitoring procedures among the
accounts of its members, the proposed system aims to uplift these difficulties. In order to
launch this proposed system, the research group decided to review its current system.
This report addresses the entire issue of the operations in the cooperative. This report is
divided into two distinct parts. The first pertains to the existing system being followed,
where they need to be strengthened. The second part deals with accounting formats and
an interview was conducted at the principal office of PBDMPC with the manager as the
The major transaction of PBDMPC is divided into two categories - those transactions
involving member interface and those involving interface with others. The researchers
will provide a flow chart that is composed of transactions how a person is admitted and
what a member is bound to have from the time she is admitted in the cooperative.
a Director. The form is forwarded to the manager accompanied by P500.00 for an initial
paid up share and P110.00 as membership fee. Upon the acceptance of the application by
the Board and upon receipt of the amount paid by the member, PBDMPC Treasurer will
issue a receipt. In case of rejection of the application, the amount is returned to the
applicant. The amount of one hundred fifty (150.00) or more is pledged by the member to
form part of the members capital share build-up. The member is entitled to participate for
capital build-up scheme as approved by the BOD or the General Assembly. The member
is obliged to pay the contribution religiously to the programs and other financial
A full pledged member and a member in good standing can borrow an amount equivalent
to three times her paid up capital or the amount recommended by the Credit Committee
and approved by the Board at a reasonably low rate of interest. Loans are payable daily,
weekly, bi-monthly or monthly for the periods of one month or three months as the case
may be, depending on the amount of loan granted. Delinquent loan accounts are subject
Renewal of loan may be made upon full payment of the current loan.
Lending policies are subject to changes due to exigencies and conditions of the PBDMPC
and upon approval of the Board or the General Assembly as the case maybe. Loans are
covered by loan redemption insurance with the Cooperative Insurance System of the
Philippines (CISP).
Loan Applications
The member accomplishes two copies of loan application to the Credit Committee
together with the passbook at least one week before the date of the loan.
Upon the receipt of the application and supporting documents, the Credit Committee is
now ready to conduct loan counseling and background investigation with the prospective
The said application will be evaluated based on credit policies and results of background
investigation. Decision should be made within 3 days after the receipt. However, in case
loan application should be returned to the member with corresponding explanations. The
actions of the Credit Committee should be noted down on Loan Register Book. A notice
The researchers find the loan procedure ambiguous especially the 3day policy regarding
the decision making of the committee. The manner of decision making is unsystematic.
Apparently, the procedure consumes a lot of time because the approval is being finalized
by the BOD. There is no proper delegation of authority regarding the approval of loans.
The cooperative needs to specify who is responsible for the approval of emergency loans
Prepaid Collection System – interests, and other charges are already deducted on the
principal loan; full amount should be paid when the loan becomes due.
Add On Collection System – interests and other charges are added to the principal loan.
The borrower receives less than the full amount but she shall pay the added interests and
Amortize Collection System – interests and other charges are added to the cost of the loan
The appraised value of the pledged item shall be at least 50% more than the amount of
her loan.
The Treasurer is responsible for recording and issuing checks for the
A collector is assigned to go house to house to gather dues from the borrowers; others
would prefer to have their payment directly at the office. The day to day collections are
summed up and recorded by the clerk/book keeper in the books. After a certain amount
has been reached, the Treasurer will deposit the accumulated collection in the bank.
Types of Loans
Other Charges
our control.
one year.
The cooperative can accept deposits from the members and non members such as
savings and time deposits. This will be used by the cooperative as an additional capital in
order to provide services to its members. A Certificate of Time Deposit shall be issued to
time depositors. Interests on both deposits are not clearly stated, but time deposits will be
based on the prevailing interest rates or higher than those of existing banks.
copy of the receipt is issued to the member and a corresponding entry is made in the
member passbook. All these entries pertaining to the member transactions are also
entered in the subsidiary ledger. As far as receipts from members are concerned,
there are no vouchers issued. But, the cash receipt acts as a good mechanism of capturing
all member transactions. The cash book is well designed and accounts are being
summarized by the book keeper, hence there is no problem in finalizing the accounts.
However, a problem exists on the manner of computing and recording of the outstanding
loan balances of the members. The researchers found out that there is no concrete form of
the aging of accounts receivable although the manager informed that the cooperative is
using the aging system to determine delinquent accounts. The balances are computed
manually which holdups the collections and determination of delinquent accounts. The
subsidiary ledger which presents the payments, balances, interest paid, dues and collateral
needs a supporting document or form that will prove the amounts embedded therein. It is
recording balances directly on the subsidiary ledger, since it is difficult to trace the
balances. The manual operation of the organization delays the collections. The proposed
system will offer timely, precise and accurate computation of the outstanding loan
balances.