Why We Can No Longer Afford to Ignore Financial Cooperatives in the Effort to Increase Access to Financial Services

This paper was commissioned by the Microcredit Summit Campaign in 2006. The document attempts to stimulate a discussion on why we must no longer ignore the power of financial cooperatives in increasing the access of the poor to financial services. It makes the following arguments in favor of financial cooperatives:

• Cooperatives are amazing delivery mechanisms when networked;
• They fit the need to build up local and collective wealth;
• The governance and performance of financial cooperatives is strengthened when they organize themselves into federated networks;
• Cooperatives can be synonymous with sustainability and outreach.

The document:

• Provides examples of successful financial cooperatives to substantiate each point in the argument;
• Details the success of the Desjardins financial cooperatives in Canada.

The document concludes by recommending that cooperatives:

• Be organized and effective;
• Demonstrate transparency and rely on effective performance reporting and controls;
• Offer quality services delivered by qualified and local employees;
• Get inter-connected and integrated to benefit from the force of federation;
• Become capable of optimizing their cooperative advantages;
• Be rooted in communities and look after their collective wealth.