Acd Savings And Credit Cooperative.docx

HOLY CHILD COLLEGE OF INFORMATION TECHNOLOGY, INC Allah Valley Drive, Surallah, South Cotabato

In Partial Fulfillment Of the Requirements In (Mgt. 3) MICROFINANCE

March 23, 2019

Submitted to: JOEL SARILLO

Submitted by: ALVIN CRIS DECHAVES

ACD Savings and Credit Cooperative

LOCATION It’s headquarter is located in Zone 2, Barangay Libertad, Surallah, South Cotabato. Vision Our long-term vision is to become an ACD Savings and Credit Cooperative a competitive, viable and sustainable with capacity for fulfilling members’ economic and social needs. Mission To be a strong, member-only financial cooperative providing innovative financial services and products while increasing the community’s savings, providing loans and offering services to support our members and their communities in poverty alleviation efforts. Core Values With integrity, respect (equality, dignity), excellence (highest standards), flexibility (interactive); safety and security (protect your funds and personal information). Description This business plan was established using a participatory process that involved executives, Board members, supervisory committee members and village leaders. Initially, an internal scan helped to assess the adequacy and completeness of systems and procedures; to identify the operational challenges facing ACD Savings and Credit

Cooperative the; to give recommendations; and to establish the ACD Savings and Credit Cooperative financial position. The internal scan reviewed all operational areas including performance management and accounting, governance and administration, Back Office Savings Activities (BOSA) and internal audit. To be able the project be implemented the project will ensure first the papers and basic documentary requirements as provided in RA 9474 also known as Lending Company Regulation Act of 2007 an Act Governing the Establishment, Operation and Regulation of Lending Companies. To name those documents and requirements, the project will establish as corporation, with a minimum paid-in capital of One Million Pesos (P1,000,000.00) and secure a license to operate from Securities and Exchange Commission (SEC), other documentary requirements shall secure from the Municipality where the business will be located. The business will grant loan to the borrowers with a reasonable interest rate of 2% per month. The company will also deduct an advance one (1) month interest from the proceeds of loan as well as the other fees. The loan must be payable within one (1) month up to six (6) months term base on the amount borrowed and the agreement between the borrower and the company. Since the target market of the project will be the employees of LGUs, other offices and Schools and also the pensioners, the proponent will propose to have a Memorandum of Agreement (MOA) between the lending company and their respective employers to deduct a corresponding amount from their monthly salary and remit the same to the lending company. This will ensure the smooth collection of loans. On the other hand, on the part of the pensioners they will surrender their Passbooks, or ATMs to the company as collateral since this is the only way to protect and as assurance to pay their lent amount. And for some

instances, for the convenient collection of matured loans, the company will propose to the bank where the monthly pensions of pensioners are remitted in the area to debit the account of the pensioners with matured loan once their pensions credited to their respective accounts and credit the same to the account of the company. Since, the company will open a bank account preferably checking account for easy releasing of loans. As one of the requirements to avail a loan from the company, borrower must have a co-maker and it must be his/her officemate. To ensure that whenever the borrower fails to settle his/her obligation, the co-maker will be liable for that obligation. The company will provide a promissory note stating the amount of loan, the interest rate, the term of loan, other fees and other terms and conditions and this will be signed by both the representatives of the company and the borrower same as with his/her co-maker. This is

PROJECT EQUIPMENTS Every business cannot operate without equipment’s in the workplace. The proposed equipment’s to be acquired before the project be implemented are the following: 1. Two (3) sets of computer 2. Two (3) units of printer 3. One (1) unit of telephone/fax machine 4. One (2) unit of typewriter 5. Three (5) calculators The owners will canvass those equipment’s to qualified suppliers. Setting a parameters to get a lowest price with good standard will observe by the owners. The project will prioritize the supplier who have a better offer. These equipment’s will be used

by the employees of the business to ensure the smooth operation of the business. The proponent suggested to have 3 sets of computer, one (1) for the manager and the other two(2) is to be used by his/her staff or co-employees same as the printer for preparing and printing the reports. The company must have of at least one (1) unit of telephone/fax machine for the queries of the prospective clients and for follow-upping other business related concerns. Two (2) unit of typewriter for preparing cash vouchers, promissory notes, checks and other documents. And of course calculators to be used for computation of interest and other related mathematical matters. Since the office space is completely furnished. The proponent will also propose to have the following furnitures and fixtures. Proper canvassing as what had observe in purchasing office equipments will also follow. Three (3) sets of office tables Three (3) roving chairs three (3) sets of waiting chairs for clients Two (2) electric fans, 1 aircon.

ORGANIZATIONS AND MANAGEMENT ASPECTS ORGANIZATIONAL STRUCTURE The business will employ employees in the office, the cashier, clerk, bookkeeper and operations head or manager. Duties and responsibilities of each employees are stated below: Loans Clerk – responsible in releasing and accepting payments of loans. - Prepares cheques, vouchers, promissory notes to be issued to borrowers. - Prepares Official Receipts (ORs) when the borrowers pay their due amount. - Update the ledger of each borrowers.

- Make a bank reconciliation. - Handles petty cash in the company for petty expenses. Loans Supervisor – act as supervisor/bookkeeper. - Checks the works of cashier (cheques, vouchers, ORs, promissory notes & etc.) - Handles and prepares the General Ledger/Subsidiary Ledger of the business - In charge of closely monitoring collections of delinquent loans. Manager/Operations Head – over-all in-charge in the lending operations - Approve the loan application and vouchers. - Analyze borrower’s financial & credit status to determine weather the loans will be granted or denied. - Responsible in overseeing the performance in processing loans documents. - Prepares and analyzes variance on budget vs actual. - Understands, manages and supervises all aspects of cash flow, such as but not limited to: a. Ensures all collections are deposited and accounted for. b. Ensures all disbursements are approved by authorized personnel before processing. c. Prepares cash flow projections.

PROFILES AND QUALIFICATIONS For Loans Clerk Graduate of any business related course Proficient in MS Office With good communication skills Entry-Level . For Loans Supervisor Graduate of Accounting or equivalent Knowledgeable in bookkeeping With 1-2 years experience in related field. Proficient in MS Office With Good communication skills For Manager/Operations Head Graduate of any business related course Not more than 45 years of age With 2-3 years experience in microlending Must be Computer Literate FINANCIAL ASPECTS A. CAPITAL CONTRIBUTION The study shows that in order to establish a lending company in Surallah, South Cotabato. The project must have of at least P1,000,000.00 paid-in capital. The proponent will propose to have P2,000,000.00 paid-in capital twice of the minimum paid-in capital, due to greater demand of the project. The capital will be from the eleven (11) private individuals whether they are retired employees or employed but does not affect/influence the interest of both the business and the company where they employed. They will contribute as to how much investment they want to raise the projected paid-in capital. B.

BASIC ASSUMPTION

The proponent will assume that the 273 present demand will all avail loans within the year from the business amounting to P 25,000.00 each with an interest rate of 3% for 3 months term. On the other hand, the proponent will project 3uncollectible accounts, this will be the basis to be used in projecting loans receivables & the one-percent (1%) provision for

bad debts. As well as the 2.5%penalties will be imposed for late payments and the proponent will assume that 5 borrowers may fail their outstanding obligation on the specified term. The company will also open a bank account and assumed to earn a 1% interest on deposit. For the purpose of preparing Financial Statements the proponent will assume that the project will start its first year of operation on the first day of January2014. Other related matters will be based on the current trend such as utilities (electricity & water expenses). FINANCIAL ANALYSIS A.

OPERATING EXPENSES The projected monthly operating expenses of the project will be as follows:

Rent Expense P 2,500.00 Water Expense 467.50 Electricity 500.00 Telephone Expense 400.00 TOTAL P 3,867.50 B. SCHEDULE OF SALARIES To attract qualified employees to fit the position. The company will offer an above minimum wage. The salaries of each employees are as follows depending on the postion they will handle. POSITIONS MONTHLY SALARIES (PHP) Loans Clerk 7,600.00 Loans Supervisor 9,000.00 Manager/Operations Head 12,400.00

C. SCHEDULE OF FRINGE BENEFITS All employees will receive a mid-year bonus equivalent to their one (1) month salaries. A Christmas bonus base on the company’s performance. Thirteenth month pay will be given also as provided by our labor code. Aside from fringe benefits mentioned above the company will also give a yearly medicine allowance of P1,200.00 for each employees. Other benefits as provided by our Labor Code will be given also.

PROJECTED INCOME STATEMENT ACD Savings and Credit Cooperative PROJECTED INCOME STATEMENT For the Year Ended December 31, 2019 INCOME Interest Income

P 569,250.00

Late Fees

3,125.00

Other Income (Interest on Deposit)

16,000.00

Total Income

P 588,375.00

Less: EXPENSES Salaries

P 348,000.00

Fringe Benefits

61,600.00

Supplies Expense

12,000.00

Power, Light & Water

15,210.00

Rent Expense

30,000.00

Telephone Expense

3,000.00

PHIC, SSS & Pag-ibig Dues

36,351.60

Permits & Licenses

24,436.00

Provision for Bad Debts (1%)

12,250.00

Total Expense

P 542,847.60

Net Income Before Income Tax

45,527.40

Provison for income Tax

28,462.50

Net Income After Income Tax

P 17,064.90

PROJECTED BALANCE SHEET ACD Savings and Credit Cooperative PROJECTED BALANCE SHEET As of December 31, 2019 ASSETS Cash in Bank

P 705,012.40

Loans Receivables

P 1,225,000.00

Less: Allowance for Bad Debts

12,250.00

1,212,750.00

Interest Receivables

2,250.00

Unused Supplies

6,000.00

Office Equipments

78,000.00

Furniture and Fixture

34,320.00

Total Assets

P 2,038,332.40

LIABILITIES Accounts Payable

P 2,500.00

Accrued Other Expenses Payable

1,517.50

Unearned Interest Income

17,250.00

Total Liabilities

P 21,267.50

STOCK HOLDERS EQUITY Retained Earnings

P 17,064.90

Common stock

2,000,000.00

Total Stockholders Equity

P 2,017,064.90

Total Liabilities & Stockholders Equity

P 2,038,332.40

CONCLUSIONS AND RECOMMENDATIONS Establishing of Lending Business in Surallah, South Cotabato appears to be feasible on its first year of operation. As per the interviews and questions conducted by the proponent, having a lending company in the area will assist the needs of certain individuals for their financial shortcomings. Therefore, I conclude as per the data gathered and based on the results, it shows that the project will help and assist the financial needs of different individuals and in return it will give an income to the company. I also conclude that with this, it will minimize and later on eliminate the traditional lending from underground lenders that offer a short-time lending like Bombay ( 5-6). On the other hand, I recommend that this project be implemented. And research supports that with the 65% increase for the future demand, this industry will continue to grow for the following years.