Cooperative financial institutions: A review of the literature

Donal McKillop*, Declan French, Barry Quinn, Anna L. Sobiech, John O.S. Wilson

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


Financial cooperatives play an important role in the financial systems of many countries. They act as a safe haven for deposits and are major sources of credit for households and small- and medium-sized firms. A not-for-profit orientation (in many cases) and a focus on maximising benefits to members have ensured the enduring popularity and sustainability of financial cooperatives. This is particularly evident since the global financial crisis when financial cooperatives continued to extend credit to members as many profit-orientated commercial banks restricted credit to households and firms. The overarching theme of the first part of this review is the structural and behavioural characteristics of financial cooperatives. In this part we consider, the origin and diffusion of financial cooperatives, network arrangements, the business model, relationship banking, balancing the interest of members, tax treatment and regulatory framework. The second part has performance and contribution to the real economy as the overarching theme. In this part we consider, efficiency and sustainability, mergers, acquisitions and failures, the benefits (and challenges) of FinTech and the contribution of financial cooperatives to the real economy including during times of crisis. The paper concludes with a summary of what we now know (and do not know) about financial cooperatives and provides suggestions as to where future research may usefully concentrate.

Original languageEnglish
Article number101520
JournalInternational Review of Financial Analysis
Early online date18 May 2020
Publication statusPublished - 01 Oct 2020


  • Cooperative financial institutions
  • Literature review

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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