Evaluation of Cooperative Risks in Eastern Visayas: Basis for the Development of Risk Management Manual

This study evaluated the risk exposure of cooperatives in Eastern Visayas as basis for the development of a comprehensive risk management manual. The research provided a detailed overview of cooperative profiles, encompassing factors such as membership, asset size, loan portfolio, savings/deposits, equity, and years of operation. The examination extended to the assessment of risk levels across institutional, financial, operational, and external dimensions. Employing a descriptive survey methodology, the study utilized a validated self-made survey schedule as the primary data-gathering instrument for risk assessment. Data analysis involved the application of statistical measures such as arithmetic mean, Pearson correlation, risk severity matrix, and standard deviation. The sample comprised thirty (30) credit and multi-purpose cooperatives, representing 75% of medium and large cooperatives in Leyte, Southern Leyte, Biliran, and Samar provinces. Results indicated an overall low risk level for cooperatives in the institutional, financial, operational, and external dimensions. Particularly, the financial aspect exhibited the highest mean score compared to other risk categories. Factors like the number of members, asset size, loan portfolio, and equity demonstrated significant correlations with identified risks, except for members' savings deposits and years of existence. The study highlighted that the top 5 specific risks carried a combination of high and medium probabilities and impacts. Mitigation strategies, including an internal control system and internal audit, emerged as crucial measures to manage these risks. These strategies were subsequently incorporated into the developed risk management manual, which is recommended for implementation by cooperatives as a proactive measure.