The journey of the Lico Agrarian Reform cooperative

Agrarian reform coop ventures from farming to commercial banking

By Philippine Information Agency (PIA 8)
July 18, 2013

NAVAL, Biliran – After years of engaging in farming, members of a farmers’ cooperative here has ventured into another world this time as bankers.

“Very inspiring is the story of the Lico Agrarian Reform Cooperative or LARCoop,” Department of Agrarian Reform Region 8 Director Eliasem Castillo said.

From a struggling farmers organization, slowly but surely, LARCoop is now among the more stable organizations in the province of Biliran, Director Castillo said.

The Lico Agrarian Reform Cooperative (LARCoop) added not so long ago 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.

As preparation, its management team together with other cooperatives attended in 2012 the Microfinance, Governance and Administration (MIGOA) seminar-workshop held here in Naval.

Chairperson Rebecca Payos afterwards together with seven other coop members, as a follow through activity, underwent a seminar on Microfinance Basic Capacity Building (MBCB) in Cebu City and a 5-day on-the-job training in Siaton, Negros Oriental.

The Department of Agrarian Reform (DAR) recommended LARCoop to National Confederation of Cooperatives (NATCCO) to avail of the latter’s credit facilities and other assistances.

Unfortunately, LARCoop failed to get NATCCO’s nod in its first try. Determined, however, LARCoop in its second attempt finally became the 56th cooperative and the first from Region-8 to be able to avail of NATCCO’s microfinance assistance which included a P1-million loan payable in five years at 13 percent interest per annum.

From this loan, the LARCoop opened a quasi-bank on December 18, 2012 at the downtown area of Naval, the provincial capital of Biliran with DAR officials, representatives from the NATCCO and local government units in attendance to witness the event, which was a monumental manifestation of the growth of the said cooperative.

The quasi bank according to Bibian Sereño, microfinance operations manager, offers savings deposit, time deposit, kiddiie deposit as well as loan assistance (providential, productive and microfinance), though limited to members only. Its primary goal is to address the financial needs of its members at very low interest rates.

On its launching day alone, 35 member-depositors opened accounts. 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 with 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 initially engaged in micro-lending activities and food processing business with the joint effort of the DAR and the Department of Trade and Industry (DTI) which painstakingly assisted them in their struggling years.

But the meager income of the cooperative then 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.

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 sq. m. lot in their 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 ballooned to 120 by 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 P4,600 initial paid-up capital, LARCoop now posts a total asset of more than P5.6-million.

These include the 120 sq.m. 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.

Further, Castillo disclosed 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), which will be used in realizing their agribusiness activities, such as their “Rice Productivity Enhancement Project”.