Credit Cooperatives in Brazil

This case investigated the credit cooperatives in Brazil, in comparison with the worlds largest ones. In Latin America, the first credit cooperative was created by the Swiss priest Theodor Armstad, on December 28th, 1902, at Nova Petrpolis, Rio Grande do Sul state, southern Brazil Caixa de Economias e Emprstimos Armstad (Armstad Savings and Loans Bank. The first Brazilian credit cooperative is still working, renamed as Cooperativa Sicredi Pioneira. However, Brazilian Federal Government only regulated Cooperatives through the adoption of Law no 5, 764, on December 16, 1971, after 69 years from creation. There are currently 13 different types of cooperatives operating in Brazil (Credit ones included), which are represented by the Brazilian Cooperatives Organization (Organizao das Cooperativas Brasileiras OCB). In this article we compared the current facts and figures of the Brazilian credit cooperatives along with World Co-operative Monitors, discussed in this single case study. Credit cooperatives are prohibited by Law 5, 764/71 from using the name bank in their corporate name. If they were allowed, they would represent the sixth largest Brazilian bank. We found an increasing participation of the credit cooperatives in Brazilian economy, approximately $ 44 billion in 2018. Credit cooperatives operation in Brazil were then analyzed, critical success factors and best practices to the sector were discussed in this article. Finally, recommendations for future research complete the present work.