Credit co-operatives performed for another year and grew more than the rest of the Brazilian financial system in 2022, according to a July note from the Central Bank of Brazil.
At the end of 2022, 55.3% of Brazilian municipalities had at least one credit union branch. The number of co-operative members has reached 15.6 million.
Total assets for the financial co-operative sector reached 590bn reais ($122bn) in December 2022, an increase of 28.6% in that year. The sector supports small and medium-sized enterprises and rural producers.
The biggest co-operative financial institutions in the country, Banco Cooperativo Sicredi and Bancoob, were among the new entrants this year in The Banker’s Top 1000 ranking following their strong growth in Tier 1 capital. At the end of 2022, Sicredi reported a 51.22% jump in Tier 1 capital to $725m, while Bancoob reached $627m, an increase of more than 30%.
The growth follows the passing of legislation last year. The new law has allowed promotional campaigns to attract new members and authorised credit co-operatives to make new products available to their members.
Regulation and supervision across the credit co-operative sector in Latin America could change rapidly while governments in the region look to explore these institutions’ potential in fostering financial inclusion, as reported earlier this year by The Banker. Brazil makes up 50% of all assets of financial co-operatives at the regional level.
