Co-operatives have launched an initiative to raise $50 million (US) to help finance co-operatives in developing countries.
Following the launch of the International Year of Co-operatives at the United Nations in New York City, the Global Development Co-operative was launched at an evening reception in the city, which plans to provide access to low cost loans for capital and infrastructure projects.
The fund will target investors with an interest in international development and extending the reach and benefits of the co-operative model. The investment concept has been developed by the UK’s Co-operative Bank — part of the Co-operative Group — and the International Co-operative Alliance.
Among the early investors committed to the initiative are the All China Federation of Supply and Marketing Co-operatives, Credit Cooperatif of France, SOK Corporation from Finland and IFFCO of India. Midcounties Co-operative as well as the Co-operative Bank from the UK have also pledged their support.
Paul Flowers, Chairman of the Global Development Co-operative, said: “Against a backdrop of a financial crisis exacerbated by corporate greed and speculation, the co-operative model has proved to be one of the most enduring and successful ways of running a business for the last 150 years.
“Despite the tough economic times, co-operative members across the world want the movement to maintain support for international development. It’s important we use our influence to support communities across the developing world.
“The launch of the GDC symbolises everything that is great about the movement as the International Year approaches. With the UK being the birthplace of co-operation I am extremely proud to be involved.”
Dame Pauline Green, President of the ICA, said: “This initiative is a clear illustration of one of the founding principles of the movement — self help among co-operatives.
“It will ensure that a positive and long-lasting legacy will remain from the International Year, helping thousands of co-operators in the developing world. It will also continue our work to develop sustainable member-owned enterprises, and embed civil society across the globe.
“We urge those with an interest in furthering social and economic development in developing countries to support the GDC.”
The Co-operative Bank has developed the initiative as part of the Co-operative Group's Ethical Plan, a three year rolling programme that sets out goals and targets to drive its ethical and co-operative aspirations. It will provide administrative support to the GDC.
The GDC is currently seeking investors to help reach the $50m goal, and it is expected to start lending in the second-half of 2012. It will make loans available primarily through experienced intermediaries such as established co–operative lenders, existing secondary co–operatives/apex organisations, microfinance institutions/credit unions and large co–operative businesses.
It will focus, not exclusively, on large co–operative sectors: agriculture, where co–operatives represent 50% of the world’s agricultural produce, and finance, where co–operatives serve 13% of the world’s population. Target lending is US$50m at between 2% and 5% interest pa, with terms up to seven years. The interest will cover administration costs and a bad debt reserve. The key performance targets are social returns.
• To become an investor partner in the GDC, contact Stuart Coe at the Co-operative Group by email: [email protected]
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- Geography of England
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- Midcounties Co-operative
- New York City
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- Social economy
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- SOK Corporation
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- North America
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