The study was primarily conducted effectiveness of the leaning policies of to determine the the HORLU-affiliated cooperatives and non-NORLU-affiliated cooperatives in the province of Ifugao.

It was specifically intended to shed light on loaning policies. and the status. average annual income of the NORLU- and non-NORLU-affiliated cooperatives. It sought also to establish the relationship between loaning policies and amount of loans extended to the income of the cooperative; and the satisfaction of the member-borrowers on the loan extended and gain after investing the loan and repayment performance.

A normative survey was used in the study.

The respondents of the study chairmen of the Board of Directors consisted of 20 managers /(BOD) which provided the data shout the cooperatives and 80 member-borrowers which provided data about the services of the cooperativen. selected using purposive sampling method. the The respondents vers

A combination of statistical tools were used in the study. Descriptive statistics such as percentages was employed the frequency of occurrence of responses / variables of the total frequency. to express as a fraction

The t-test was employed in comparing the two groups of cooperatives where the observations / responses parametric type. are of the

In assessing the effectiveness of the loaning policies, multiple regression and correlation analysis was employed to relate the independent variables (loaning policies) variables (cooperatives to the dependent income and member-borrowers income. needs satisfaction and repayment performance). loan

Findings:
Profile and performance of the cooperatives. Ten cooperatives for each of the NORLU-affiliated and non-NORLU-affiliated groups were considered. multipurpose type. were either of the credit The cooperatives They offered various types of loans such productive, providential, and emergency loan. offered only by the NORLU-affiliated cooperatives. loans extended to member-borrowers or as Salary loan is The type and was independent of the affiliations of the cooperatives.

The amount and number of loans released NORLU-affiliated cooperatives were significantly higher granted by the non-NORLU-affilinted cooperatives. Loans. the by the than those From these cooperatives outperformed NORLU-affiliated counterparts in terms of the amount repaid on time. their The amount of loans restructured did not significantly differ between the twoO groups of cooperatives. unpaid amount unpaid loans Except for the providential loan wherein was significantly lower, productive and emergency significantly were higher in NORLU-affiliated cooperatives than in the non-NORLU-affiliated cooperativen.

The gross income accrued from interests. service fee, fines and penalties, and filing fees were significantly more in the NORLU-affiliated cooperatives than in the non-NORLU-affiliated cooperatives. In terms of total assets, liabilities, capital and income the NORLU-affiliated cooperatives significantly surpassed the records of their counterpart in the non-NORLU-affiliated group. For both groups of cooperatives, the Board of Directors (BOD) was the policy making body. All of them formed committees such credit, election and education committees. as

Profiles and perception of member-borrowers. Forty member-borrowers from each of the NORLU-affiliated cooperatives and mon-NORLU-affiliated cooperatives were interviewed. The impact of the loans extended and the affiliation of the cooperative offering the loans were dependent with each other suggesting that they were significantly related to the income of the borrowers. Majority of the clientele of the NORLU-affiliated cooperativen had neccumulated gains while most of the non-NORLU-nffilinted cooperativen borrowers reported unchanged economic status after the loan was granted.

Effectiveness of the loaning policies. The cooperative loaning policies when considered together, has no relationship with the cooperatives income. Considering the different policies independently with each other. the loan requirements for salary loans has the highest correlation with the income followed by the maturity of the salary loans, interest rate for salary loans, and loan requirements for the providential loan.

Eight of the 16 loaning policies considered were found to be effective in defining the loan needs satisfaction of the member-borrowers. These were the loan requirements for productive. providential, and salary loans, maturity date for providential loan, interest rate for the salary loan, and loanable amount the productive, providential, and salary loans. for

The member-borrowers income was dictated by eight of the 16 loaning policies considered. These were loan requirements for productive, providential. and emergency loans, the maturity schedule for productive and providential loans, the interest rate for the emergency loan, and loanable amount for the productive and providential loans.

The loaning policies were not effective in defining the repayment performance of the member-borrowers.

The age of the member-borrowers was a determinant that defined their repayment performance. Educational attainment and occupation, however, were not related with the member-borrower'e repayment performance.

Conclusions:
Based on the results of the findings, the following major conclusions are drawn: (a), during the 1989 to 1991 the cooperatives. the average annual net operations of income of the NORLU-affiliated cooperative in significantly higher than the net income of the non-NOBLU-affiliated cooperatives; (b). cooperative loaning policies when considered together, have relationship with the cooperative's income. the no Considering the different policies independently, the loan requirements for nalary loans has the histhest correlation with the income, followed by maturity of the salary loans: interest rate for salary loans: and loan requirements for the providential loan; (c), eight of the 16 loaning policies considered were found to be effective in defining the loan needs satisfaction of the member-borrowers. These are the loan requirements for productive, providential, and salary loans: maturity date for providential loan: interest rate for the calary loan; and loanable amount for the productive, providential, and malary loans; (d), the member-borrowers income in dictated by eight of the 16 loaning policien considered. These are loan requirements for productive, providentini, and emergency loans: maturity schedule for productive and providential loans: interest rate for emergency loan; and leanable amount for productive and providential loans: (e), the loaning policies are not effective in defining the repayment performance of the member-borrowers; and (f), the age of the member-borrowers in repayment performance. however. one determinant that defines their Educational attainment and occupation, are not related with the member-borrowers repayment performance.

Recommendations:
Based on the findings of the study, the following recommendations are hereby forwarded: (a) capital build-up should be a major concern of cooperatives. This recommendation is borne out of the fact that NORLU-affiliated cooperatives with higher capital performed better as compared to the non-NORLU-affiliated cooperatives in terms of their average annual income: (b) per findings of the study, the leaning policy on loan requirements have significant impact on satisfaction and income. the cooperative's income, borrowers It is therefore recommended that cooperatives with credit ventures should impose some sort of security measures before granting loans to borrowers; and (c) the study did not take into account cultural considerations as focus was limited only in the province of Ifugao. along this line is hereby recommended to its A further study evaluate the effect of cultural factors on the performance of cooperatives with different affiliations.

Thesis (Master of Science in Rural Development)

Includes appendices and bibliographical references