Developing credit cooperatives in Russia: challenges and potential solutions

The Bank of Russia intends to hold a discussion with market players on how to develop credit cooperatives. To enable this dialogue, the regulator has released a consultation document dedicated to the subject.

The report notes a continued decline in both the number of credit cooperatives and their members in recent years, which is why the current state of business in this financial segment should be looked into. The report discusses consumers’ attitude towards credit cooperatives, includes analysis of a number of problems that stall their development, and offers potential solutions.

The Bank of Russia deems it necessary to discuss with the professional community how to develop community principles in the credit cooperative sphere; how should the subsidiary liability framework for cooperative shareholders operate; how feasible is it to establish a consumer credit cooperative (CCC) stabilisation system.

In particular, it has been proposed that a better cooperative governance framework and a better understanding among CCC shareholders of their responsibilities would lead to their greater involvement in cooperatives’ operations. According to the authors, risks would thereby be reduced and credit cooperation would gain traction.

Among other key subjects, the report covers measures to stimulate the advancement of credit cooperatives and steps to boost their business reputation.

Following the discussion, the Bank of Russia will determine a further policy in this area alongside a specific package of measures to encourage credit cooperation. They involve drafting strategic documents and regulatory innovations.

Please send your feedback, including answers to the questions and suggestions on the subject of the report, before 1 November 2017 to kuzyushkinvi@cbr.ru.