At the monthly meeting of the Board of Directors held on February 20, 2019, the board has approved revisions to our Share Capital Policy. The objective is to give members flexibility on their investments with the cooperative.
You can read the new policy here but the salient points are as follows:
- Share Capital Build-Up is now mandatory only up to P20,000.00. Once a member reaches at least P20,000.00 share capital, capital build-up becomes optional.
- The maximum share capital a member can have is P500,000.00. Once a member reaches P500,000.00 share capital, he/she will not be allowed to add any more share capital contribution.
Further, as a result of the above changes, for those members with P20,000.00 or more share capital already, their current monthly capital build-up wll be transferred as monthlly savings deposit. Members who wish to continue with share capital build-up just need to inform the cooperative of their preference.
The Board believes that making these changes will help members manage their funds better because unlike share capital which can only be withdrawn upon termination of membership, savings deposit are withdrawable anytime. Also, the cap of P500,000.00 maximum share capital will make the coop more equitable to all members.
Frequently Asked Questions
1. Does this mean you will transfer my share capital in excess of P20,000.00 to my savings account?
Answer: No. Per cooperative bylaws, share capital can only be withdrawn/transferred upon membership termination.
2. Can I make partial withdrawal of my share capital and just leave the minimum required paid-up of P20,000.00?
Answer: No. Per cooperative bylaws, share capital can only be withdrawn/transferred upon membership termination.
3. Once I reach at least P20,000.00 share capital, can I totally stop my monthly capital build-up contribution?
Answer: Yes. However, we encourage you to at least maintain monthly savings deposit so you can continue the habit of saving.
4. When is the effectivity?
Answer: The new policy will take effect next pay period (i.e. Mar 10 payroll).
5. Can I change the amount of my monthly capital build-up later?
Answer: Yes. Monthly capital build-up can be changed anytime within policy.
6. What are the pros and cons of Share Capital vs Savings Deposit?
| PROS | CONS | |
| Share Capital | Share Capital is like Stocks in corporations. It earns dividends which is normally higher than interest on savings deposit.
Most coop loans require 20% Share Capital. Thus, the higher the Share Capital, the higher the maximum loanable amount. Note: Like Corporate Stocks, dividend rate depends on the performance of the cooperative. The more members patronize the products of the cooperative (e.g. loans), the better the coop performance will be which will mean better dividends. |
Cannot be withdrawn unless member resigns from cooperative.
As earnings depend on the performance of the cooperative, Share Capital is inherently riskier than Savings Deposit. |
| Savings Deposit | Can be withdrawn anytime if needed (e.g. emergencies) without the need to resign from coop.
Earns fixed interest. Rates are similar to most commercial banks but coop interest earnings are tax-free. As earning is fixed, Savings Deposit is inherently the more conservative option vs Savings Deposit. |
Historically, Savings Deposit (<1%) earns lower than Share Capital (3-4%). |