INTRODUCTION

Life is full of expenses, full of things that we need to fulfill ourselves and sometimes we
tend to lose the future just to satisfy daily needs. People are living in a difficult life and
some of them are not capable to stabilize their standard of living and because of that
they are being dependent to others just to sustain their needs or wants. They
continuously strive for high ideals on finding out the better way of living and allowing
themselves on extending their capabilities in owing from institutions to sustain their
needs. However, there are certain people fail to pay their indebtedness and may lead to
difficult situation. Until when that people learn to use the credit properly? Therefore, it is
very timely to talk about credit. So, where credit started?

Credit in ancient times gives rise to other process of generating income to financial
institution and have profoundly affected decision making, accumulation of wealth
and defraying some financial needs. It also stands as a status symbol of an
individual. Having no debt means having a high quality of life, conversely, a debt
refers to the individual who cannot sustain his life even though he has the capability
to pay his indebtedness. In that time, Credit separated the status of people in
defining life standing either rich or a poor but besides of those negative
connotations, financial institution attracted people with not so good credit standing
who incurred debts out of pure necessity, or worse have an intention to defraud
creditors just like a tenant who are perpetually indebtedness to the landlords and
had to depend on credit opportunities to survive.

Technically, Credit is derived from the Latin word credo which means to trust or
to believe. The essential element of credit is trust. Credit is a sale on trust, where you
trust the debtors or credit clients that they will bring back the amount of money they
owed with stated interest incurred.
 As time passes by, credit becomes one of the remedies used by individuals and
businesses to sustain their financial needs and it has a great contribution in commercial
aspect. More often than not, people rely on credit especially in times of financial
difficulties.

Large number of credit institutions has been emerging occupying a significant

niche in the society. One of these institutions is multi-purpose cooperatives; the latter
referring to the cooperatives engaging in diversified nature of operations. The
cooperative plays a vital role to the development of the society and its primary objective
is to help improve the quality of life of its members.

The primary objective of every cooperative is to help improve the quality of life of
its members. IMCO Multipurpose Cooperative, a institution, promotes good welfare
between individuals and companies by providing and meeting their financial needs.

BCC has a great contributions in enhancing the lives of its members and the
community did not go unnoticed.Barangka Credit Cooperative is one of the cooperative
that provides several credit facilities to its members which became the coops main
business. The various kinds of loans it extends include commercial, discounting,
microfinance, starting capital for business, salary, petty cash, pensioner and mortgage,
among others.

This study attempts to provide an adequate understanding of what a

Multipurpose cooperative is, in terms of operations and policies, financial performance,
and membership. Specifically, the major objectives of the study are, to determine the
effectiveness of cooperative in meeting the needs of their members and, where
applicable, to suggest ways and means to improve services; and to identify possible
management financial weaknesses in their operations. Thus, the analysis is divided into
three major groupings: Operations and Policies, the policies and practices associated
with the savings and lending activities of credit cooperatives; the degree of flexibility
they adopt in implementing credit cooperative rules and regulations; the issues and
problems encountered in their regular operations, and the way to handle them; their
relationship with other savings and credit institutions, both formal and informal, and the
extent of competition among themselves and with other institutions of similar functions;
and the relationship and/or affiliations of primary credit cooperatives with associations or
federations. Financial Performance, the growth performance and patterns of credit
cooperatives; and the problems and constraints in their growth process. Membership
the overall profile and characteristics of credit cooperative members; the saving and
borrowing behavior of members; the extent of membership participation in cooperative
activities; the lending behavior of members; and the members' level of awareness about
cooperative issues and related matters.

Background of the Study

A Credit cooperative is a financial organization owned and operated by its members

with the following objectives to encourage savings among its members , to create a pool
of such savings for which loans for productive or provident purpose may be granted to
its members and to provide related services to enable its members to maximize the
benefit for such loan.

Barangka Credit Cooperative avail of the financial assistance and grants from different
organizations such as the Peoples Credit & Finance Corporation, LANDBANK,
Philippine Federation of Credit Cooperatives and Asian Confederation of Credit Union,
etc. Beneficiaries were also given opportunities to venture on small businesses such as
sari-sari stores, specialty shops, shoe making, balut, salted eggs making, fruit vending,
catering and dress making. Provident services and support programs including time
deposits, kiddie savers and savings deposits, emergency, appliance, rice and grocery
loans, health maintenance, and housing lot, educational, calamity, and service vehicle
assistance are also provided by BCC.
 Barangka Credit Cooperative founders, the association was turned into a
cooperative by December 16, 1985. Thirty seven (37) cooperators pooled their
resources which totaled Php 5,300.00. They named the organization C & K Barangka
Community Credit Cooperative, Inc. However, several pains came with the coops birth.
Its problems included finding a place where it can hold office, lack of supporters, U/Texs
refusal to recognize the coop and being unacquainted with the people in barangay,
among others. Its first office was in Boni Avenue, Barangka, Marikina, where the coop
only stayed for a month due to lack of funds to pay for rent. On September 15, 1995,
the coop adopted the name Barangka Credit Cooperative (BCC)

Scope and Limitations

The researchers focus on the credit policies and procedures of loans receivable.
Other receivables as a result of their other operations are not included in the scope of
this study.

The respondents of this study are selected employees /members in BCC extending
credit services located in Marikina City .

The evaluation of the degree of compliance with the particular cooperative-based

collection policies and procedures and its corresponding implementation will be based
only from the information gathered through questionnaire and interview.

The project is only up to the determination of problems regarding the collection policies
and procedures and not on the causes of such problems.

Significance of the study

The researchers aim to determine the current credit process of Barangka Credit
Cooperative extending credit services in Marikina City and to evaluate how efficient they
are in the implementation of their loan collection policies and procedures that could also
contribute to their Financial Stability.
The study will also give valuable information that will aid in the improvement of these
credit policies and procedures.

Specifically, this study aims to equip relevant information to the following users:

To the Members of the cooperative

Members will be able to know how efficient and effective the credit
process in BCC.

It will also help the members to easily apply for the needed credit
opportunity in the cooperative.

Potential Borrowers

The credit information will represent as a basis in determining if a credit

institution is financially stable.

The information regarding the credit process will help them to decide to
avail the credit in a particular credit institution such as cooperative.

The borrowers will also be protected with the new credit process in case
the existing credit process is not favorable to them.

Other Credit Institutions/Cooperatives

The credit information of the study can be used as a way to judge and
determine the quality and effectiveness of the existing credit process.

The study will also help the credit institutions/cooperative to enhance their
credit process.
Definition of terms

Asset- the entire property of a person, association, corporation, estate applicable or

subject to the payment of debts.

Bank an establishment for the custody, loan, exchange, or issue of money, for the

extension of credit and for facilitating the transmission of funds.

Benefits money that is paid by a company or by government when dies, become

sick, stop working.

Collateral something that you promise to give someone if you cannot pay back a

loan.

Collection- a request for money in order to help people or to pay for something

important.

Cooperative- business, or other organization that is owned and run jointly by its

members, who share the profits or benefits.

Credit money that a bank or business will allow a person to use and then pay

back in the future.

Credit- the ability of a customer to obtain goods or services before payment, based

on the trust that payment will be made in the future.

Debt- an amount of money that you owe to a person, bank, company.

Economic- relating to a economy, process or system by which goods and services

are produced, sold, and bought.

Efficiency the ability to do something or produce something without wasting

material, time, energy.

Evaluation - the making of a judgment about the amount number, or value of

something; assessment.

Financial stability- is a state in which the financial system, i.e. the key financial

markets and the financial institutional system is resistant to economic shocks and

is fit to smoothly fulfil its basic functions: the intermediation of financial funds,

management of risks and the arrangement of payments.

Income- money received, especially on a regular basis, for work or through

investments.

Institution- a society or organization having a particular object or common factor,

especially a scientific, educational, or social one.

Lending to give money to someone who agrees to pay it back in the future.

Loan an amount of money that is given to someone for a period of time with a

promise that it will be paid back, or an amount of money that is borrowed.

Management the act or skill of controlling and making decisions about a

business, department.

Marketing the activities that are involved in making people aware of a company

products, making sure that the products are available to be bought.

Organization a company or business that is formed for a particular purpose.

Overdue- not paid at an expected or required time

Resources a supply of something such as money that someone has and can use

when is needed.

Savings the amount of money that you have saved especially in a bank over a

period of time.

Turnover the amount of money that is received in sales by a store or company.

Conceptual framework

INPUT PROCESS

OUTPUT

Board of Survey Evaluation of

Directors Credit Process
of Barangka
Management Credit
Interviews Cooperative
Officers through
Financial
Committee Stability
Questioners
members

Members of
cooperatives
Feedback

This research is created to evaluate the credit process of Baranka Credit

Cooperative in Marikina City with regards to its financial stability through the use of

surveys, questioners and interviews gathered enough data in determining the

relationship of credit process to the financial stability of BCC.

The researcher must conduct a methods and procedures to be used to

analyze the variables by using all the process with regards to the title and to

gathered data through interviews, survey, questioners to meet the goal of the

researcher clearly and reliable information coming from the respondent.

The output of our procedures and methods to formulate a good outcome to our

research for the Evaluation of Credit Process of Barangka Credit Cooperative

through Financial Stability.