Human Empowerment through Cooperation
Making the Cooperative the Ideal Business ModelThe ideal of the 'cooperative' was first developed in the 1820s, long before privately held corporations by individuals, based on the development of the free and fair exchange of legally held assets through common ownership of a business or distribution system designed to benefit its members who collectively own the institution as a society. The non-profit and for profit co-operative embodiment today has become a solid institutional part of the corporate laws of many countries while in other countries that depend on the concept of international cooperation from other nations have yet to allow the concept of an employee owned business or corporation to emerge in their legal systems. Cooperatives are tax-free and generally protected by governments as social orders within the area of human and civil rights in addition to being legal businesses.
|Cooperatives empower communities.|
What you choose to follow or be a part of in life is generally based solely in your personal character and personality, but we do know that, once people begin to realize the potential of cooperatives and the benefits that are possible they will always cherish their cooperative memberships with our global development and by being a part of cooperatives locally in their own communities, cooperatives are security. Cooperatives are known for being socially responsible, fair, fraternal, equal and democratic. They are also designed to distribute benefits and profits equally to members. Commentary by David J. Wright
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Scaling Up Cooperatives to Reach the Sustainable Development GoalsArticle: Huffington-Post
Cooperatives are Naturally the Best Way to promote the SDGs
|Cooperatives empower women.|
Over the decades, cooperatives have had success in areas like savings, agriculture, housing, or distribution of electricity. While there have been many improvements, they have faced challenges in areas such as tax policy, discriminatory regulation, achieving scale, and prevailing business attitudes toward their mission and business model.
To achieve the Sustainable Development Goals (SDGs) — a set of 17 global goals which seek to end poverty by 2030, promote peace, and preserve the planet for future generations — we need to take advantage of the power of cooperatives. The SDGs fit nicely under the umbrella of the World Bank Group’s twin goals of ending poverty by 2030 and promoting shared prosperity.
The work is daunting, particularly in the area of financial inclusion. In 2014, only 62 percent of the world’s adult population had a financial account - leaving 2 billion adults without one.
Cooperative Financial Institutions (or CFI’s) include savings and credit cooperatives, credit unions, financial cooperatives, as well as savings and loan associations. They are key strategic partners in achieving both the goals of universal financial access, ending extreme poverty. They have low operating costs and are located in remote, rural areas with no financial institutions.
Yet for many of these member-owned institutions, scaling up savings services is impaired by challenges related to management and staff capacity, governance, and oversight and supervision. Some financial cooperatives and credit unions cannot safely lend funds received as deposits due to lack of credit capacity and systems.
We can help financial cooperatives scale-up by supporting them with technical advice and new technology to help them share data and information with their clients and with development practitioners. They can also benefit from active global partnerships with multilateral institutions, non-governmental organizations, and the private sector.
CFIs are one of the main providers of financial services to low-income people, with 700 million members and accountholders worldwide. CFIs have large constituencies in India, China, Indonesia, Brazil, Mexico, Kenya, Morocco, and over 35 smaller developing countries such as Togo and Haiti.
Last year, the World Bank Group’s private sector arm, the IFC, had an estimated $500 million of investments in CFIs around the world. The World Bank Group has been active for decades in this area. Some of the most notable programs include the Indian Dairy Cooperative, which has created an estimated 250,000 jobs, mostly in rural areas. Similarly, Mexico’s National Savings and Financial Services Bank has helped strengthen savings and credit institutions that serve millions of rural residents, who would otherwise have been relegated to the margins of the formal financial sector.
The World Bank Group’s policy teams have helped governments supervise and regulate cooperative financial institutions. For example, in 2009, the Bank Group worked with Rwanda to strengthen both the supervision and reach of Savings and Credit Cooperatives. By mid-2012 financial access in Rwanda increased from 47 percent to 72 percent. The newly created savings and credit cooperatives played an important role in this increase since they operated in 215 rural locations in which no financial institution existed previously. And the partnership with Rwanda also significantly increased the financial sustainability of the savings and credit cooperatives.
In a more mobile and urban world, cooperatives must adapt, while maintaining their basic values and approach. As seen in Sub-Saharan Africa, mobile money accounts can drive financial inclusion. While just 1 percent of adults globally say they use a mobile money account and nothing else, in Sub-Saharan Africa, 12 percent of adults (64 million adults) have mobile money accounts (compared to just 2 percent worldwide); 45 percent of them have only a mobile money account. Mobile money accounts can help narrow the gap in financial inclusion between men and women, which could have important effects on inequality and child welfare. CFIs will have to stay abreast of these developments and exploit these new technologies to maximize financial inclusion, particularly for the poor.
Capitalizing on cooperatives’ successes and learning from their mistakes can help us expand the menu of options as we search for more inclusive and sustainable models of development, and new ways of building and sharing knowledge. In this way we can significantly contribute to our common goal of ending extreme poverty in a single generation.
Republished from the Huffington Post, Scaling Up Cooperatives to Reach the Sustainable Development Goals by Mahmoud Mohieldin Senior Vice President for the 2030 Development Agenda, UN Relations and Partnerships