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Success Story: From Farming to Commercial Banking

After years of engaging in farming, members of a farmers’ cooperative in Naval, Biliran now ventured into the world of banking. The Lico Agrarian Reform Cooperative (LARCoop) added quasi-banking into their list of income generating projects. With some members who are college graduates, the Coop bravely gave this practically new field a try.
 
In preparation, its management team together with other cooperatives attended the Microfinance, Governance and Administration (MIGOA) seminar-workshop held in Naval in 2012. Chairperson Rebecca Payos together with seven other coop members underwent a seminar on Microfinance Basic Capacity Building (MBCB) in Cebu City and a 5-day on-the-job training in Siaton, Negros Oriental.
 
Last year, the Department of Agrarian Reform (DAR) recommended LARCoop to avail of the National Confederation of Cooperatives’ (NATCCO) credit facilities and other assistances. Hence, LARCoop became the 56th cooperative and the first from Region 8 to avail of NATCCO’s microfinance assistance which includes a P1-million loan payable in five years at 13 percent interest per annum.
 
With the loan, LARCoop opened a quasi-bank at the downtown area in Naval, Biliran. DAR officials last December 18, 2012, representatives from the NATCCO and local government units witnessed the event and the growth of the said cooperative.
 
The quasi bank according to Bibian Sereño, microfinance operations manager, offers savings deposit, time deposit, kiddie deposit as well as loan assistance (providential, productive and microfinance). Its primary goal is to address the financial needs of its members at very low interest rates.
 
On its launching day, 35 member-depositors opened an account. As of this writing, Sereño reported that the quasi bank has already 524 depositors. LARCoop was organized by DAR in 2003 and registered as Lico Agrarian Reform Beneficiaries Multi Purpose Cooperative (LARBMPC) and registered at the Cooperative Development Authority (CDA) on February 21 of the same year with only 23 members composed of agrarian reform beneficiaries (ARBs) and other farmers from the Naval-2 Agrarian Reform Community (ARC).
 
The cooperative is engaged in micro-lending activities and food processing business with the joint effort of the DAR and the Department of Trade and Industry (DTI) who assisted them through the years. The meager income of the cooperative was not enough to provide the growing needs of its members, particularly the rice farmers who needed bigger amount during planting season that would serve them as capital for their farm operations hence, they ventured in to banking.
 
Though apprehensive, the cooperative took the risk of availing of production loan assistance from DAR’s Credit Assistance Program for Program Beneficiaries Development (CAP-PBD) thru the Land Bank of the Philippines. The cooperative was able to maintain a good standing with the bank. From the coop’s income, they were able to acquire a 120 square meter lot in the village where they built their office.
 
In 2012, they changed their name to Lico Agrarian Reform Cooperative or LARCoop.
 
From 23 members, the cooperative has already 120 members as of December 18, 2012. Eighty of them are ARBs. Since the opening of the quasi bank, 636 members more were added, bringing the total members of the organization to 705.
 
From P 4,600 initial paid-up capital, LARCoop now posts a total asset of more than P5.6-million. These include the 120 square meter lot and an office in Barangay Lico, and the recently inaugurated quasi bank.
 
As the coop expanded their operations, LARCoop opened their membership to residents of other barangays and adjacent towns. During the inauguration of the cooperative’s quasi bank, DAR Regional Director Eliasem Castillo advised the officers and members to never give up when faced with challenges. He added that DAR will always be there to guide and assist them. Castillo also reminded them the many assistances extended by DAR to its beneficiaries which include credit facilities.
 
Recently, according to Provincial Agrarian Reform Officer (PARO) Ismael Aya-ay, the Coop was chosen by his office to be the lead agrarian reform beneficiary organization (ARBO) who will take charge of the farm machineries distributed under the Agrarian Reform Communities Connectivity and Economic Support Services (ARCCESS). These machines will be used in realizing their agribusiness activities, such as their “Rice Productivity Enhancement Project” that can lead to additional income in the form of rentals.
 
LARCoop is now among the more stable organizations in the province.

Region VIII News

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