06 April 2013


Investment option in a Cooperative Bank

Cooperative bank came to exist under the emancipation of the Republic Act No. 720 also known as Rural Bank Act, “An act of providing for the creation, organization and operation of rural banks, and for other purposes”.

Under its provision, the aim is to promote rural economy by providing people a good opportunity in productive activities by providing them good access to financial credit facilities at reasonable terms.

A cooperative bank is one that is organized by cooperatives in which registered members and majority shareholders mainly controlled the programs.  Certain cooperatives accept membership in a 200 Php per share wherein a minimum of 10 shares required together with the cooperative membership seminar and financial training. Registered member in a particular cooperative is entitled to such privileges and benefits such as burial financial support from a death of registered member or a family member, a dividend and a loan of any type with flexible terms.

A cooperative bank provides products to non-bankable but economically active poor individual. Sometimes, saving deposit applied would be a little bit higher than any big commercial banks. Also, interest rate for savings account compounded quarterly making it a good value to let savings grow further.

Cooperative banks mostly are microfinance based cooperative which provides livelihood assistance program, financial assistance for micro entrepreneurs and special financial assistance loan to overseas Filipino workers (OFWs’).

Micro financing in cooperative banks allow the marginalized poor to get a piece of society’s mainstream by giving them access to different financial services.

A cooperative has more diversified financial services to its members, though it is still under the regulation of Bangko Sentral ng Pilipinas (BSP), all is designed for the benefits of its members.

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