One of the most essential tools that cooperatives need to survive and thrive is a bank, which can provide loans, credit facilities, and other services.

But there are far too few banks worldwide that understand cooperatives or want to work with them. The United Nations recently launched a leadership program called "Bank for Cooperatives", and money collected from this program will go towards creating such institutions all around the world.

The Bank for Cooperatives is a global financial institution that provides financial products and services to cooperatives, credit unions, and other non-profit groups.

The Bank for Cooperatives plays a key role in connecting cooperative developers with major banks and global networks of other financial institutions.

Created by the International Cooperative Alliance in 1967, the Bank for Cooperatives has its headquarters in Dakar, Senegal; it also runs regional offices in Africa (Nairobi), Asia (Bangkok), Europe (Brussels) and the Americas (Washington DC).

The Bank offers twelve different loan programs with terms of up to 25 years. These programs provide finance to small businesses, cooperatives of all types who serve their communities, and new or under-capitalized institutions. The Bank can also provide capital investment advice through its Regional Offices.

The Bank for Cooperatives provides loans and grants on commercial terms to small and medium-sized (SME) enterprises and cooperatives of all types, including credit unions and alternative investment funds.

The Bank can also provide business advisory services to client organizations concerning market research and technical assistance. The Bank is particularly active at the African, Caribbean and Pacific (ACP) levels.

The Bank aims to assist the development of small and micro-enterprises in developing countries by providing financial products that are tailored to meet the specific needs of cooperatives in particular sectors of the economy.

History Of Bank For Cooperatives Explained

The Bank for Cooperatives was created in 1967, at the International Cooperative Alliance meeting in Dakar, Senegal, under the leadership of the Senegalese Minister of Planning and Cooperation, Lamine Guèye. The meeting adopted an ambitious plan to provide financial support to small-scale enterprises and cooperatives in developing countries.

The Bank's first President was Jacobo Arbenz from Guatemala. He served from 1968 until 1979. At that time, the Bank had a capital base of USD 1 million (EUR 400 thousand).

The Board of Directors comprises 16 members (eighteen if one includes Mr Arbenz, who has resigned). Currently, the Bank has nearly 500 members and 17 additional entities affiliated with the International Cooperative Alliance.

The Bank enjoys close links with cooperatives and other organizations at a regional level, particularly in Africa (ACP) and Asia (ASEAN).

An Advisory Council supports the activities of the Bank made up of 30 members that advise the Board on matters such as strategic development, financial policy and financial risk management.

There is a working relationship with other international financial institutions such as Redefining Development, UNIDO or the World Trade Organization.

The development objective of the Bank for Cooperatives is to foster economic development in all its dimensions, particularly poverty alleviation and the creation of employment. The Bank has adopted the following strategic goals:

In addition to these three overall objectives, there are specific objectives linked to each of the twelve loan programmes.

A full list of all loans granted by the Bank since its creation can be found on its website

In 2010, total disbursements amounted to USD 1.3 billion (EUR 1.1 billion).

The ACP group is made up of 79 countries that have preferential economic ties with Europe; it represents about 880 million people who live on less than USD 2 per day.

In 2010, the Bank granted USD 848.6 million (EUR 673.8 million) to its ACP members through its various loan programmes.

In 2011, the Bank intended to grant USD 1 billion (EUR 0.8 billion) or more to its ACP members through its various loan programmes.

Bank of Cooperatives Explained

Credit and other financial services for domestic agricultural borrowers (such as farmers, ranchers, rural cooperatives, and those qualified to borrow from the System) are CoBank's responsibility under the FCS framework. CoBank's main clientele are farmer-owned cooperatives, and the bank does everything it can to facilitate its international trade.

Each of the four System banks sells assets on the domestic and global financial markets to generate funds. Finally, they reinvest the funds by lending to System organizations, which provide loans to qualified borrowers like farmers, ranchers, and others throughout the United States.

The Farm Credit System's overall loan portfolio was $287 billion at the end of 2019.

In 2019, the FCS was responsible for 43% of all debt in the agricultural industry.

Over thirty percent of the credit and financial requirements for U.S. agricultural output are met by the FCS. Government borrowing and taxes fund the System.

For those unfamiliar, CoBank is one of the four financial institutions that make up the Farm Credit System. It follows the same structure as the other three agricultural credit banks (ACBs): AgriBank, FCB, AgFirst Farm Credit Bank, and Farm Credit Bank of Texas (FCBs).

CoBank has more power than farm credit banks due to its status as an agricultural credit bank (ACB). CoBank offers loans to cooperatives in the agricultural, aquatic, and public utility sectors, funding agricultural exports from the United States and offering international banking services to farmer-owned cooperatives.

CoBank provides many services, including collateral custody and affordable lending rates. When it comes to international transactions involving foreign currencies and agricultural exports, the bank is also permitted to help.

Among the Bank for Cooperatives' many stated goals and values are:

• The protection of member ownership and democratic decision-making.
• The provision of educational and training opportunities for members and the general public.
• The promotion of sustainable practices in the communities it serves.
• The advancement of the interests of the agricultural sector.

Conclusion

The Bank for Cooperatives is a valuable resource for credit unions and their members. By providing financing, technical assistance, and other resources to cooperatives, the bank helps these organizations thrive and better serve their communities.

If you're looking for a financial institution that supports cooperative values, the Bank for Cooperatives should be at the top of your list.