Analysis of performance and evolution of rural credit cooperatives in Brazil from 1990 to 2005

Abstract

This paper aims to analyze how rural credit co-operatives work and their evolution in Brazil from 1990 to 2005. Special attention is paid to their advantages and disadvantages in relation to commercial banks. Report analysis of subtypes of cooperatives are employed, highlighting Schulze-Delitzsch and Raiffeisen types as precursor of Luzzatti co-operatives and Desjardins as the most modern co-operative type. The main findings are: rural credit co-operatives are significant, answering for 14.97% of total number of co-operatives, having 30.7% of total associates andemploying 13.36% of total co-operative system’s employees on December, 2004. Southeast and northeast are the house for 39.78% and 22.67%, respectively, of total number of co-operatives in Brazil. States of Rio de Janeiro and Sao Paulo harbor most of co-operatives and together they house 27.02% of total number of co-operatives in Brazil. Rural credit co-operatives have advantages in relation to commercial banks in relation to: system organization, lower rates charged from loaners and participants have the opportunity to share co-operative’s profits.