Protecting Deposits in Savings and Credit Cooperatives

The paper states three basic conclusions from various local studies on the savings and credit cooperatives in the Philippines:

• There is rapid growth potential, both in terms of savings accounts and the volume of savings;
• Savers belong to the low and low-middle income class;
• Savings and credit cooperatives provide basic financial services to savers and borrowers.

The suggestions to protect member deposits in the savings and credit cooperatives (SSC), are:

• Make regulation and supervision effective;
• Generate greater trust among members through assurance of better integrity systems;
• Institute performance standards for financial discipline;
• Build basic information structure;
• Consider deposit insurance for deposits in savings and credit cooperatives.

The author provides examples to illustrate his suggestions. The first example is of the Bolivian approach to regulation and supervision of credit cooperatives and the second one is of the Guatemalan Credit Union approach to performance standards.