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Empowering Cooperatives through Information & Communication Technology: Connectivity & Accessibility

Empowering Cooperatives through Information & Communication Technology: Connectivity & Accessibility. Cresente C. Paez President & CEO National Confederation of Cooperatives (NATCCO) - Philippines. About NATCCO….

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Empowering Cooperatives through Information & Communication Technology: Connectivity & Accessibility

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  1. Empowering Cooperatives through Information & Communication Technology: Connectivity & Accessibility Cresente C. Paez President & CEO National Confederation of Cooperatives (NATCCO) - Philippines

  2. 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@coops), and professionalization of cooperatives.

  3. 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.

  4. ….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

  5. The NATCCO NETWORK • 1.2 million members • 589 co-ops with 354 branches • Php60 billion (US$1.5 billion) • 6,000 Employees

  6. The NATCCO Central (As of Dec. 31, 2007) • US$17 million (P683 million) assets • US$1 million (P40.4 million) – shares of co-ops • US$9.2 million (P369 million) – deposits • US$5.3 million (P212 million) – borrowings • US$7.9 million (P317 million) – loans disbursed • PAR – 0.6% • US$0.17 million (P7 million) - Net Surplus • 87 employees

  7. NATCCO MEMBERS BY LOCATION As of January 31, 2008 1 Kalinga 4 Cagayan 2 Abra 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

  8. ICT-Driven Co-ops • Accounting software (100) • Internet Connections • ATMs (6)

  9. 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

  10. 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

  11. Specific problems… • The inconvenience of transactions “over the counter” • Crowding of customers during peak hours. • Offices are closed before 8:00 a.m. and after 5:00 p.m. and during Saturdays & Sundays • Proximity: Long distances to travel

  12. 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

  13. eKoopBanker - Coop Banking System

  14. Input LOAN Data Input Savings Data Input Accounting Data Data LOAN PORTFOLIO MGT. SYSTEM SAVINGS DEPOSIT/ WITHDRAWAL TRACKING SYSTEM GENERAL ACCOUNTING SYSTEM CHART OF ACCOUNTS POLICIES & PROCEDURES Generally Accepted Accounting Principles Information Management Reports Financial Statements System’s Framework

  15. 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

  16. eKoopBanker - Coop Banking System • Automating the operations of the cooperative • Loan portfolio management • Savings tracking • General accounting • Standardization • Streamline the operations • Member Satisfaction

  17. 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)

  18. 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

  19. Growth for the eKoopBanker • Migration to open-source system • Web-base application • Inter-branch capabilities • Data warehousing • Online member transaction • SMS transactions • ATM Integration

  20. 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.

  21. 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

  22. Cooperative Cooperative ATM Withdrawal ATM

  23. 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

  24. 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 Member’s name (1st line) Coop name (2nd line)

  25. POS Cooperative ATM Withdrawal Cash Card Approval Card Loading

  26. ATM & Cash Card - Bills Payment

  27. 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

  28. Website Development Connecting co-ops through virtual networking: LINKING WEBSITES

  29. NATCCO Website

  30. Recent Site Created by NATCCO

  31. Recent Site Created by NATCCO

  32. Site Created by it@coops Specialist trained my Inwent, AWCF and NATCCO

  33. Site Created by it@coops Specialist trained by NATCCO in partnership with AWCF & INWent-Germany.

  34. 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

  35. 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

  36. 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.

  37. Key Learnings… ”ICT?” “Do it Fast, Do it Right and Do it Cheap.”

  38. Thank you very much!

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