Labo Progressive Multi–Purpose Cooperative (LPMPC)

Increase profitability by matching product development to market demand 

About the organisation:  

Labo Progressive Multi-Purpose Cooperative (LPMPC, since 1990) aims to provide better services to their members through establishing markets (local and international). LPMPC provides better income for members by providing decent jobs to the large number of unemployed in the province.

Originally, LPMPC was set up as a micro-finance cooperative and extended its services with savings and consumers stores for their growing members. Nowadays they are also into marketing of their members' products like piña cloth and other products.

Engaging in different agri-business project, members rose to more than 2,500, increasing paid-up capital to PhP 7 million and savings rose to PhP 7 million with present assets of more than PhP 28 million. Operations extended from municipality to province wide.

The social impact of the organisation is to develop lives of indigenous people through capacity building. LPMPC reduces unemployment and provides an alternative source of income to small farmers. As of 30 June 2009, there are 2,879 members. The current goal is to strengthen their national market position and to develop more financial products for potential clients.

Business case
The assignment was to increase profitability of the Microfinance business by matching product development to market demand.

Guus Hulsker is a business developer with a banking background, yet without professional experience in micro finance. However, experience in pioneering in new markets and submerging in different cultures and more importantly genuine interest, helped him deliver results. In his former job he had an independent position in which he oversaw and was involved in the whole banking process. He utilized this by exposing the organization's financial flow and translated this into recommendations ranging from asset and liability strategy via lending operations to product development.

Results

Analysis
In preparation Guus performed desk research in the Netherlands starting 6 weeks before departure and held face to face and telephone interviews with organizations such as the Micro Insurance Association Netherlands, ICCO, OikoCredit and Agriterra. Also contact was established with LPMPC's General Manager to discuss the foundation of the assignment.

Upon arrival in Labo, he held interviews with the team members and  the General Manager of the local Coop bank. Additionally Guus did fieldwork and interviewed members by visiting their stores and farms and on location in the Microfinance branche.

In order to assess where improvements could be made, the following topics were touched upon:

• market supply and demand
• funding levels vs. interest rates
• PEST and SWOT analysis
• financial flow
• from funding (matching assets to liabilities) via lending operations to the development of products

All findings were presented to Microfinance stakeholders in the region's capital Naga.

Advice
Recommendations were delivered according to a timeline from April to June 2010:

- training: programme, incl. tools, for employees in relationship management and market research

- personnel: adjust job description, incorporate incentive scheme, appoint credit supervisor

- proposals for amendments to microfinance policy and develop asset & liability strategy

- seminars to include market update and education on products

- further strengthen cooperation with other market players for instance further explore possibilities ATM services

Impact on the partners
‘It was an experience that adds to your resume as well as your personal life'
 
Follow up
This is a start of a two-year partnership between SharePeople and LPMPC.  Both organisations will keep in touch (a.o. via the SharePeople liaison, at least every 3 months), and with the experts as well. After this Programme, an official update on the status of the organisation takes place every 12 months. With this information, an new Programme is one of the possibilities to boost the organisation if needed. Participation in a yearly SharePeople Experience Week is also an option. Some of the recommendations have already been implemented. The timeline of recommendations was between April and June 2010 and implementation is in progress.

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• Labo Progressive Multi–Purpose Cooperative (LPMPC), 2010, Expert Program, Philippines
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