The Role and Importance of Savings and Credit Cooperatives in Microfinancing and the Worldwide Activities of the German Cooperative and Raiffeisen Confederation (DGRV)

This paper discusses the importance of cooperatives in Germany, and examines the activities of the German Cooperative and Raiffeisen Confederation (DGRV).

Cooperatives are useful for the economic and social structure of a country since they use local initiative and local economic strength. They are also well-equipped to combine the advantage of local activities with regional and national networking. Cooperative institutions promote savings generation and finance 75% of all small and medium-sized businesses in Germany. DGRV promotes cooperatives and integrates individual local cooperatives into overall decentralized systems. In its project activities, DGRV gives priority to:

• Development and expansion of cooperative societies in financial, crafts, and agricultural sectors;
• Establishment of centralized institutions, such as cooperative central banks;
• Development of training systems;
• Development of auditing systems in cooperation with national banking supervisory authorities and national central banks;
• Advice to cooperatives, including member relations in rural and urban areas;
• Creation of framework conditions conducive to cooperatives such as banking supervision, banking law and cooperative law.

The paper presents examples of DGRV projects in various countries including South Africa, Kyrgyzstan, Mexico, and Ecuador.