WHY DO

COOPS
FAIL?
Atty. Rheneir P. Mora, CPA, REB
Resource Speaker
• 1. BAD OR
DELIN-
QUENT
LOANS (poor
collection efficiency,
high delinquency rate,
DOSRI accounts, etc.)

• Challenge: Achieve a
below 10% delinquency
rate.
 • 2. NO OR
LACK OF
INTERNAL
CONTROL
(incomplete and false
records/no to
inadequate record
keeping)
• Challenge: All
transactions must be
recorded and signed.
• 3. WEAK OR
NO
CAPITAL
BUILD-UP
SCHEMES
Challenge: Trust your
coop. Save in your
coop.
4. OVEREXPOSURE
TO OUTSIDE
LOANS OR
DEPENDENCY TO
OUTSIDE
FINANCIAL HELP
Challenge: Build-up
your funds
internally.
• 5. OVER
SPENDING
– EXPENSES ARE
HIGHER THAN
REVENUES
Challenge: Manage
your expenses
and be frugal.
• 6. WEAK OR
POOR
MANAGEMENT
• Untimely reports
– Fast turnover of staff
– Delinquent staff
Challenge: Hire
competent staff and
pay them well.
• 7. NO EXTERNAL
AUDIT, IN SOME
CASES
IRREGULAR
EXTERNAL
AUDIT
• Challenge: Be
complaint with
audit and
financial
disciplines.
 • 8. LOW
MEMBERSHIP
PATRONAGE
• Challenge:
Protect,
patronize and
trust your coop.
• 9. WEAK OR
INACTIVE
BOARD OF
DIRECTORS
(BODs)
• Challenge:
Select qualified
leaders and
train them.
• 10. NO PLANS-
strategic plan or
annual plan or
monthly
workplan.