This case study shows how the Cooperative Rural Bank of Bulacan, Inc. (CRBBI) in the Philippines has successfully ventured into commercial banking, in accordance with the government policy reforms of 1986. The bank provides services to its cooperative members as well. This study outlines the measures that CRBBI adopted to achieve sustainability, increase outreach and expand its portfolio. The bank:
* Encouraged member participation in ownership and governance issues,
* Employed forward-looking, professional management and staff,
* Standardized banking operations by establishing an online computer system,
* Improved its financial standing by re-evaluating and re-accrediting member organizations,
* Adopted market-oriented interest rates to improve viability,
* Provided incentives to staff for excellence in performance,
* Weaned away from government-directed credit programs thereby improving sustainability,
* Diversified portfolio and used innovative credit products to increase outreach.
The author mentions the following challenges that the bank faces in carrying out its dual functions as a cooperative and a commercial bank:
* Dealing simultaneously with the cooperative bank members and the increasing non-members that use commercial banking services,
* Deciding whether to lend to member organizations or to invest in higher-return investments elsewhere,
* Competing with its own member organizations.
