Empowering Cooperatives through Information

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Empowering Cooperatives through Information
Communication Technology Connectivity
Accessibility

• Cresente C. Paez
• President CEO
• National Confederation of Cooperatives (NATCCO) -
  Philippines

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About NATCCO

• The biggest and strongest national federation of
  cooperatives in the country in terms of
  geographical reach, membership, financial
  capacity and array of services.
• Core financial functions focused on treasury,
  deposit-taking, credit-granting, money transfer
  and cash management services
• Non-financial services include accounting
  software, website development, training
  consulting on microfinance, ICT specialization
  (it_at_coops), and professionalization of
  cooperatives.

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About NATCCO

• We are a national financial solutions
  cooperative, servicing the needs of 1.2 million
  individuals through our local cooperatives.
• Our solutions conform international financial
  intermediation standards and the highest degree
  in responding to the needs of the communities we
  serve.

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• .NATCCO throughout the country has embraced this
  financial solution for
• Liquidity pool management
• Wholesale lending
• Cash management services
• Investment in hi-impact, high growth enterprises
• Development of information technology (IT)
• Microfinance Innovations
• Capability building through training consulting

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• The NATCCO NETWORK
• 1.2 million members
• 589 co-ops with 354 branches
• Php60 billion (US1.5 billion)
• 6,000 Employees

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• The NATCCO Central (As of Dec. 31, 2007)
• US17 million (P683 million) assets
• US1 million (P40.4 million) shares of co-ops
• US9.2 million (P369 million) deposits
• US5.3 million (P212 million) borrowings
• US7.9 million (P317 million) loans disbursed
• PAR 0.6
• US0.17 million (P7 million) - Net Surplus
• 87 employees

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NATCCO MEMBERS BY LOCATION As of January 31, 2008
1 Kalinga
2 Abra
4 Cagayan
13 Ilocos Sur
3 Isabela
1 La Union
7 Ifugao
4 Benguet
2 Nueva Viscaya
4 Pangasinan
1 Quirino
3 Aurora
2 Zambales
2 Pampanga
8 Bulacan
5 Rizal
2 Bataan
1 Laguna
14 Camarines Norte
37 NCR
8 Quezon
7 Cavite
11 Camarines Sur
4 Batangas
2 Sorsogon
1 Marinduque
2 Mindoro
1 Eastern Samar
4 Antique
13 Leyte
21 Cebu
1 Iloilo
4 Negros Occidental
6 Bohol
1 Guimaras
1 Palawan
1 Camiguin
6 Misamis Oriental
4 Negros Oriental
1 Misamis Occidental
1 Surigao del Sur
1 Agusan del Sur
2 Bukidnon
2 Zamboanga del Norte
4 Lanao del Norte
11 Davao
6 Zamboanga del Sur
4 North Cotabato
2 Sulu
1 South Cotabato
1 USA
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• ICT-Driven Co-ops
• Accounting software (100)
• Internet Connections
• ATMs (6)

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Why Information Communication Technology?

• Competitiveness is the key that drove NATCCO to
  go into ICT
• ICT as a tool to deliver more competitive
  products and services to cooperatives and its
  members
• 2003, initially implemented ICT within the
  organization, giving birth to
• Local Area Network
• Internet Email
• NATCCO Website
• ICT Trainings

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Specific Developmental Problems that ICT should
Address in the Cooperatives

• Automated financial transactions accounting
• Volume of transactions shift from manualization
  to automation
• The issue of accuracy, efficiency, speed,
  analysis, and MIS (generation of reports)
• Data generation (network wide)
• The issue of different system providers (i.e.
  outsourced, in-house) and their continuity.
• Expensive to develop and maintain by one local
  co-op

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Specific problems

• The inconvenience of transactions over the
  counter
• Crowding of customers during peak hours.
• Offices are closed before 800 a.m. and after
  500 p.m. and during Saturdays Sundays
• Proximity Long distances to travel

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Specific problems

• Money Transfer
• No access to payout centers in rural areas (money
  sent from other places)
• Bank-to-bank transfer requirement to open a bank
  account and pay expensive remittance fee

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eKoopBanker - Coop Banking System
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Systems Framework
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Technical Features

• Window-Based
• Available on both stand-alone network versions
• Developed using Visual Basic 6.0
• With Microsoft Database Engine (MSDE) or
  Microsoft SQL Server as its Back-end Database
  Manager
• Crystal Report enables migration to MS Word,
  Excel other file formats

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eKoopBanker - Coop Banking System

• Automating the operations of the cooperative
• Loan portfolio management
• Savings tracking
• General accounting
• Standardization
• Streamline the operations
• Member Satisfaction

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Hindrances

• Acceptance
• End-User Resistance to change
• Fear of layoffs due to computerization
• Investment Cost
• False expectations on automation
• Lack of knowledge in the complexity and impact of
  automation
• Low staff competency
• Inability to meet automation requirements (time,
  human resources)

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Strategies used and Significant Accomplishments

• Strategies Used
• One standard accounting software for the network
• To own vs. to outsource Buy an existing software
  and enhance
• Accomplishments
• Currently installed in 96 cooperatives with 118
  branches
• On-going migration of the system to open-source
  and web-based application

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Growth for the eKoopBanker

• Migration to open-source system
• Web-base application
• Inter-branch capabilities
• Data warehousing
• Online member transaction
• SMS transactions
• ATM Integration

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ATM Cash Cards

• Strategies Used
• ATM Cash Cards to outsource the system
• For the ATM to join the ATM network as a
  non-bank
• For the Cash Card co-branding with a bank
• Accomplishments
• Installed and functional ATMs (Quezon City,
  Dumaguete, Tacloban Iligan)
• For the Cash Card - NATCCO entered into
  partnership with Chinatrust Bank.

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ATM

• NATCCO as the Settlement Bank for cooperatives
  thru Central Fund
• Cardholders can transact to any ATM network
  nationwide
• Availability of cash anytime, anywhere
• Loan disbursement
• Attract membership
• Security

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ATM
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Cash Card

• Re-loadable money card
• Withdraw Cash All ATM Networks
• VISA Debit Card Visa Accepted Worldwide
• Bills Payment

• NATCCO is the card issuer
• Cooperatives distributors of the cards
• Members users of the product

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Cash Card

• Easy cash-management
• No initial deposit
• No minimum maintaining balance
• Easy to roll-out
• Convenience with PIN Mailer
• Minimize Risk cash-less transaction
• Hassle free
• Highly secured

Members name (1st line) Coop name (2nd line)
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Cash Card
Approval
Card Loading
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ATM Cash Card - Bills Payment
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ICT Solutions

• Beneficiaries
• Cooperatives their members
• Technology
• Accounting software owned
• ATM, Cash Cards, Credit Cards, Money Transfer -
  outsourced
• Capacity building
• Training provided
• Project Partners
• Rabobank Foundation, Chinatrust, Infoserve,
  Western Union (DA5 Company) and Bankard
• Is it a pilot project?
• Open source web-based accounting software,
  MasterCard Cash Card with VISA
• Was it scaled up?
• Ekoopbanker, COOPinoy ATM, WU Money Transfer

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Website Development

• Connecting co-ops through virtual networking
• LINKING WEBSITES

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NATCCO Website
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Recent Site Created by NATCCO
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Recent Site Created by NATCCO
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Site Created by it_at_coops Specialist trained my
Inwent, AWCF and NATCCO
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Site Created by it_at_coops Specialist trained by
NATCCO in partnership with AWCF INWent-Germany.
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Major Challenges

• Accounting Software (ekoopbanker)
• To be fully developed as OPEN SOURCE and
  WEB-BASED system
• Inter-branch and inter-coop transactions as one
  NATCCO network
• One system, One Standard, One software
• COOPinoy ATM
• Co-op as non-bank is mainstreamed in the banking
  system
• NATCCO to own a co-op ATM network

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Major Challenges

• Integration of internet and mobile phone banking
  to our accounting software
• Cash Cards Credit Cards
• Targeting 100,000 cardholders
• Money Transfer
• Increase from 300 to 1,000 locations in the next
  3 years
• Card-Based Technology Development Card-to-card
  money transfer with bills payment functions

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Key Learnings

• Owning or developing a technology versus
  outsourcing is a business decision with
  reference to investment requirement, in-house
  capability, economy of scale, potential market
  impact and competition.
• Financial services delivered through ICT is a
  value proposition to win and keep your
  customers and members. Bottom line Does ICT
  create superior value in local communities?
• It is not only ICT but also innovation-driven
  ICT.

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Key Learnings

• ICT?
• Do it Fast, Do it Right and Do it Cheap.

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Thank you very much!