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Posted by on Jul 17, 2013 | 0 comments

ASOPROSBA: Credit Cooperative

ASOPROSBA: Credit Cooperative

On the outskirts of the Ecuadorian city Cuenca, in the Sinincay and Baños districts, you can learn about the initiatives driven by the Integrated Savings and Credit Cooperative.   In case there is confusion, we can clarify that this has nothing to do with what was known as an Integrated Cooperative in Catalonia (which, incidentally, is a very interesting experience.)  The Integrated Savings and Credit Cooperative (integrated cooperative from now on) is a traditional savings and credit union.  A classic alternative to the conventional private bank, with limited transformational capacity and with some interesting elements.

The clients are the partners, the partners are the owners, the owners are sovereigns and they make absolute decisions collectively.   Generally, in this type of cooperative, and likewise in this Ecuadorian cooperative too, the involvement of members in making decisions is low.  The administration of the cooperative is in the hands of an administrative board and the technical team (executive employees): in this way, many credit, work and agricultural cooperatives tend to have a less horizontal, participative and transparent operation than what the theory claims.  The size and age of the cooperative have an influence.  Often cooperatives show similar behaviours which are akin to their “capitalist” equivalents (if you enter a Caprabo-Eroski supermarket it is difficult to distinguish it from a Corte Inglés supermarket).  Credit Cooperatives usually pay and charge the same amount of interest and require the same safeguards as the bank, use the same complaints and marketing mechanisms, treat their members as customers….

Like we said, some elements are different.  Credit cooperatives (not to be confused with a savings bank!) are too small to enter into speculative games and mechanisms of power like the big banks do.  They are less likely to engage in risky operations and this makes them more resilient in crises.  To be a cooperative, the profits to shareholders are removed (though the profits on the capital of the depositors is not removedare not).  They show, at times, something more than vocation for the service to their members and society.

This last point is what brought me to know about the integrated cooperative.  Because of the direction of the people who run it, this cooperative has certain grass root support in the two neighbourhoods where they are based and is committed to the mission of boosting the local economy by supporting small businesses in the twoboth districts.     

We visited two projects, which we don’t want to present as ideal models to copy, but as examples for reflection.  The first is the introduction of a physical, complementary currency, the UDIS, which was circulated for a time but whose circulation is has been halted for the time being. [Article about the UDIS in Cuenca].

The other one is a project strengthening of a local business network in the Baños district.  The small were producers were invited to a first meeting by the integrated cooperative and from that they formed an association, ASOPROSBA.  The ultimate aim is to put a local coin into circulation here too, but in this case, the first step is to build up a local network of small producers.  The association organises markets every week and they also have a shop where they sell their products.

Here the role of the integrated cooperative is fundamentalessential, not only because they take the lead, but also because they finance the rent of the shop and the salaries of the two people who work there, and furthermore they also help to train them.  Here though, in my opinion, comes the snagbut.  This project needs many resources, has costs to implement and maintain it that the association cannot take on, which makes it necessarily dependent on the integrated cooperative and other donations.  It’s the same integrated cooperative which designs and proposes as well.  Although this is the objective, in principle, it seems difficult that the association could reach the point of being able to take care of these costs.  Some of the expenses, like the salaries of the two shop employees, could be removed if the locals took turns looking after the shop.  But these types of schemes are the closest to self-organization and are eliminated when a donor comes and brings something already done.  The question is what happens when the finance ends.

I went there and spoke to the president of ASOPROSBA.  She told me of the hope that has started with this and told me that are enthusiastic, hoping to finally have a legally constituted association.  She notes that the nearly 40 members previously didn’t know each other and now they work together to help each other.

I asked her what she worked as and she took me to a small clothes shop where she works with her sister in law and mother in law.  I thought these places didn’t exist anymore.  A tiny shop, three or four sewing machines and a table to iron and pack the clothes up.  They make quality shirts at competitive prices. I asked them if the shop was profitable, if they earned enough for all three.  Yes.    The mother in law arrived and I asked her to sew something so I could take this photo.   I was amazed at the speed of the expert hands that have worked her whole life.  These corners still survive in the vast experience of the globalised world that sew shirts in these subhuman conditions.  It made me happy that there are organizations that support treasures like this one.  

Translated by J. Lerroux and Skelly

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