Analysis of the Financial Sustainability and Outreach Performance of Selected Credit Cooperatives in Leyte, Philippines

ABSTRACTCredit cooperatives are cooperatives which primary mission is to provide its members access to financial services like lending and deposits. They take part in the goal of eradicating poverty by remaining sustainable in offering financial services through increased accessibility and economic viability. Assessments of the credit cooperatives’ outreach effectiveness and financial viability using econometric models are quite rare here in the Philippines. Realizing this, this study aimed to assess the financial sustainability and outreach performance of selected credit cooperatives in Leyte through the application of cointegrated time series regression analysis. We used secondary times series data extracted from audited annual reports of selected credit cooperatives operating for at least twenty years. It was found that indicators directly related to credit cooperative operations have an impact on both its financial and outreach performance. External factors, like natural disasters and health crises also affects the organization’s performance. Cooperative size, value of loans granted and the external shocks are significant indicators of the credit cooperative’s financial sustainability. Meanwhile, variables such as cooperative size, mandatory expenses and leverage are significant predictors in explaining the outreach performance of credit cooperatives