Dr Linda Shaw at the International Co-operative Alliance Global Conference in Cape Town, November 2013.

1. Financing co-operatives
Dr Linda Shaw

2. The Starting Point
Findings from a 2010 study, which was commissioned by the
UK Co-operative Bank, and carried out by the UK Cooperative College, which assessed the financing needs of cooperatives in developing countries in order to:
‘to inform the potential establishment of a global co-operative
development fund’
Backdrop of the global co-operative revival coupled with a
recognition of the need to scale up development assistance
for co-operatives

3. Methodology
Interviews and questionnaires
Literature review
Focus on movement views plus some external stakeholders
High level survey which did not investigate in any depth at
barriers and needs at country level

4. Key findings
Some good investment funds for co-ops existed but they were
nowhere near meeting financing needs of co-operatives
Financing needs varied according to sector - eg utilities and
housing co-ops needed large upfront capital requirements
But for agricultural and financial co-operatives there was a clear
lack of availability of mid-range and long term financing –
particularly loans between $250k to $750k
Typically such funding was needed by secondary co-operatives
such as unions, federations or consortia rather than by individual
co-operatives
These findings were in line with other studies which had identified
the ‘missing middle’ in agricultural finance

5. Main types of finance required
Lines of credit for liquidity management
Long term loans for infrastructure investment
Medium term loans for technology upgrading
On-lending funds for financial cooperatives such as SACCOs

6. Why the lack of provision for co-operatives?
Lack of access to financial intermediaries
Too large for micro-finance programmes and regarded as
risky by commercial banks
High interest rates
Lack of fixed assets
Skills gap in co-operatives themselves – especially business
planning and capacity to prepare a credible business case

7. Since then
Need for ‘missing middle’ finance further corroborated by more
recent studies
Growing local and regional market opportunities in Africa makes
need for financing even more imperative
Mobilising more resources within the movement (such as stronger
links between financial and agricultural co-operatives at the local
level) could complement any external loan financing
Based on my own experience, financing gap has become more
evident for:

8. For the tea
smallholders in
Kericho, Kenya

9. For the coffee union
at Mzuzu, Malawi

10. For the Meat
Producers Co-op
Union, Uganda

11. Thank you
• The needs are pressing, how can we to enable the financing
to happen

12. Peter Couchman
Chief Executive, Plunkett Foundation