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Through associations, groups in society are able to join forces to obtain benefits and defend common demands. Cooperatives were born in the same spirit, but focused on the development of a business activity. Cooperatives are active, among other sectors, in agriculture, education, health and the arts. credit market.

The credit unions provide financial and banking services, such as current accounts, loans, financing and investments, under the authorization and supervision of the Central Bank. In this model, the client is also the owner of the business, with a share of the profits and participation in management.

According to "World Council of Credit UnionsThese institutions are present in 118 countries on six continents. In Brazil, according to National Confederation of Credit Unions (Confebras), there are 840 cooperatives operating in the credit sector and more than 13 million members, spread across all regions of the country.

With a strong presence and capillarity in the countryside, and proximity to the client, cooperative credit is an option for populations that lack coverage by the traditional financial system and for micro and small businesses. Data recently released by the Central Bank showed that 50% of Brazilian municipalities have a credit union unit - coverage that reaches more than 90% of municipalities in the South.

The growth of this lending model has been constant over the last decade. The credit portfolio of cooperatives grew by an average of 23% per year, from R$ 26.4 billion to R$ 202.5 billion. During the pandemic, growth was above the average of recent years and higher than the growth of other institutions' credit portfolios.

As in the traditional financial system, the credit analysis process is important for the sustainability and functioning of the cooperative business. For a long time, the credit bureau sector has contributed to minimizing the risk of default through its databases of defaulters.

What's new is that, in a recent survey by the Central Bank, credit unions reported that they are already consulting information from the Positive dataor that they intend to use soon. This will certainly help to get credit to those who need it, while keeping risk under control.

The importance of cooperative credit led the Central Bank to include cooperatives in the set of actions that make up Agenda BC#, precisely in the pillar of financial inclusion. This is a topic that, in the bureaus' opinion, will be crucial in the post-pandemic, with the growing digitalization of means of payment.

As well as enabling the full exercise of citizenship, financial inclusion promotes economic development. A study by the Economic Research Institute Foundation (FIPE) compared, with the appropriate statistical controls, the performance of municipalities with and without credit unions and concluded that the presence of these institutions can be associated with a higher GDP per capita, as well as higher percentages of the population in formal employment and a higher rate of entrepreneurship.

We believe that, given the enormous potential for growth in the Brazilian credit market and the transformations that are taking place in this sector, cooperatives will be another vector of competition, contributing to financial inclusion and regional and national economic development, alongside other credit granting models.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor