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Cooperatives and Rural Financial Development

Cooperatives and Rural Financial Development. Hans Groeneveld SVP Cooperative and Sustainable Business Rabobank Nederland 15 November 2012. Rural population in developing and emerging countries classified by available level of rural finance. Source: estimations by Rabobank.

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Cooperatives and Rural Financial Development

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  1. Cooperatives and Rural Financial Development Hans Groeneveld SVP Cooperative and Sustainable Business Rabobank Nederland 15 November 2012

  2. Rural population in developing and emerging countries classified by available level of rural finance Source: estimations by Rabobank

  3. Financial players

  4. Rabobank Nederland Bank (licensed) Players and phases in rural financial development (Credit led) MFI network SACCO network Standalone formal SACCO Informal group Time

  5. Recent developments • From access to finance to access to financial services • Skipping traditional development stages: technological innovations • Overbanked in terms of institutions, underbanked in terms of products • Broadening of product range: structured products, warehouse receipt financing, supply chain financing structures • Consolidation of credit union type of institutions into banks with cooperative characteristics

  6. Cooperative beliefs of Rabobank • 1. Connecting with the customer: • Customer’s interests first • Corporate governance with members • Influence and say • Close (physical and virtual) • 3. Connecting with society: community as shareholder • Locally rooted • Dialogue with many – local – stakeholders • Social goals • ‘Co-operative dividend’ • Sustainable business Vision: Together WE achieve more • 4. Connecting with each other: • Network organisation • Local meetings • Local boards of supervisors • Knowledge and information sharing • Virtual communities • 2. Connecting with the future: • Long term focus • Long term relationships • In good and bad times • Future proof products • Solid enterprise • Innovations

  7. Determinants for successful and viable cooperatives

  8. Cooperative performance Determining Factors

  9. Rabobank cases • Peru: access to producer finance (Norandino) • Ecuador: financial inclusion for the lower segments of the F&A sector (COOPAC San Jose) • India: linking the poor to the formalfinancialsector (BWDA, Tamil Nadu) • Uganda: the added value of an APEX organization (UCCFS) • Brazil: the importance of partnerships for APEX organizations (Sicredi) • Rwanda: commercial bankwithcooperativecharacteristics and background (Banque Populaire du Rwanda) • Tanzania: a broadretailbankwith a focus on rural finance (NMB) MINORITY STAKES!!

  10. Concluding considerations • Economic motives must be guiding principles • No universal recipe: cooperative banks are not always solution • Quick development of players: scale, APEX, new products, new technologies • To ensure long-term focus by financial institutions on rural areas, both rural and urban clients should be represented in their corporate governance

  11. Thank you for your attention!

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