Credit and Collection Management Practices of Selected Cooperatives in Manila

Abstract

In today’s society, one of cooperatives’ key benefits is financial assistance, and unlike other financial institutions that offer credit service to its clients, cooperatives are friendlier, having lower loan interest rate and easier credit terms. In light of this, the main purpose of the study is to determine the level of effectiveness of the credit and collection management practices of selected cooperatives in Manila with regards to the following aspects –credit policies and procedures, credit approval, collection process and credit and collection control. The researchers utilized the descriptive method using the survey questionnaire which was distributed to 102 cooperatives in Manila. Based on the assessment of the respondents, the management practices under credit approval, collection process, and credit and collection control aspects were very effective. On the other hand, the management practices with regards to credit policies and procedures aspects were considered effective by the respondents. Moreover, there are no significant differences on the respondents’ assessments of the effectiveness of credit and collection management practices according to their profile except for credit and collection control, whereas there is a significant difference on the assessment of respondents when grouped according to age. With all the information gathered by the researchers, they recommend that cooperatives may require members to pay their credits in installment basis, send an officer to check the validity of information given by members, lay out more effective sanctions (e.g. reassignment) corresponding the level or degree of offense made by an officer, and implement job rotation to avoid the formation of personal relationship between the member and the said officer.