Working with Co-operatives
Co-operatives, credit unions, and other forms of self-help organisations are an
important part of the world economy. The United Nations has estimated that the
livelihood of nearly three billion people, or half of the world's population, is
made secure by co-operative enterprise. Co-operatives directly employ an estimated 100
million workers, more than all the world’s multinational companies. They play a particularly important role in developing countries where
they can provide goods, services and employment for people not catered for by
either the state or private business.
Because of their importance, DFID undertakes a range of work to foster and encourage the co-operative sectors of developing countries. We work with specific co-operatives, offering aid and assistance. And we work with governments and regulatory bodies to make setting up and running co-operatives easier.
Definition
A co-operative is an independent enterprise, promoted, owned and controlled by its members. Whereas companies and corporations are obliged to focus on profit, co-operatives are more likely to focus on providing benefits to their members and the wider community.
Co-operatives are active in markets around the world at local, national and even global levels. Many co-operatives help to reduce poverty by offering economic opportunities to people at the margins of the mainstream economy. Co-operatives can:
- help small producers to access markets
- promote savings, credit and banking services to people who otherwise couldn't access them
- reduce people's vulnerability and promote security by offering insurance at very local levels
- provide important goods and services not provided by the state – including health, education, water and housing.
DFID has published a 'How to' note with advice on working with co-operatives in
developing countries -
How to work with
Co-operatives
(265
kb).
Agricultural co-operatives
Agricultural cooperatives are among the oldest forms of co-operative in the
world. Their importance for the production and marketing of food among local
communities across the developing world cannot be
over-emphasised. More than a third of the membership of the worldwide 
International
Co-operative Alliance represents agricultural co-operatives.
Credit co-operatives
Co-operatives needn’t be limited to products and trade. There is a wide range of
financial co-operatives offering services to people and communities beyond the
reach of traditional banks
and finance houses. Local savings-based, user-owned organisations such as
Savings and Credit Co-operative Organisations (SACCOs) can provide vital
financing. Worldwide it is estimated that more than 46,000 credit unions in 97
countries serve 172 million people. The regional and national credit union and
financial cooperative associations affiliated with the World Council of Credit
Unions represent 73 countries across the globe.
An example – Ghana’s chocolate co-operative
Kuapa Kokoo Union (KKU)
in Ghana is well-known as the supplier of almost
two-thirds of the international supply of fair trade chocolate. It is a
secondary co-operative – the members are not individuals, but village-based
co-operative societies, which collect cocoa beans from 49,000 members and then
sell them to KKU. 25% of these members are women. While fair trade is important,
most of the cocoa marketed by the co-operative is sold through normal channels.
DFID guaranteed a business loan to help KKU expand, and also helped Kuapa establish the Kuapa Farmers Credit Union. DFID also financed the Kuapa Impact assessment survey and gave a credit guarantee for KKU's bestselling brand, Day Chocolate Company. (Case study: DFID's contribution to a Fair Trade success.)
Links
Last updated: 1 January 2009
