Objectives and principles of operation of the Savings and Credit Cooperative
The purpose of the Savings and Credit Cooperative:
The Savings and Credit Cooperative is a dual-purpose organization. The dual purpose is to meet the economic, social and cultural needs of its members and to improve their quality of life.
The Savings and Credit Cooperative's deposit service is a policy aimed at improving the quality of life of its members, while providing credit services to each member.
Principles of operation of Savings and Credit Cooperatives:
The International Congress of Manchester has approved the 7 Basic Principles of the Cooperative Movement for the 21st Century (10 Principles for Savings and Credit Cooperatives). The essence of the principles of this activity is to expand the cooperation of individuals in society, to develop people and to create a better social wealth through cooperation.
In addition to the principles, the World Association of Savings and Credit Cooperatives (WOCCU) declares its vision, mission and beliefs as follows:
OUR VISION To increase access to global financial services through a consortium of savings and credit cooperatives around the world.
OUR MISSION Improve life through savings, credit and other financial cooperatives.
OUR TRUST Everyone should have access to affordable, reliable and stable financial services.
Principles of operation:
Service to Members
Maximizing Member Economic Benefit
Savings, credit cooperatives and other cooperative financial institutions are owned by their clients. All members are owners of the cooperative's financial institutions. A savings and credit cooperative is an independent private organization that serves its members in accordance with the law and is controlled by its members.
Savings, credit cooperatives and other cooperative financial institutions are democratic institutions that elect a board of directors to represent them and are under the control of their active members. Elected representatives are accountable to members.
Members of the Savings and Credit Cooperative have equal voting rights (one member, one vote) and participate in decision-making on issues related to the cooperative, regardless of the amount of investment and the size of the business. The principle of one member voting is aimed at meeting the requirements for a broad membership of the cooperative. In the case of the Association of Savings and Credit Cooperatives and other supporting organizations, the right to vote may be established on a proportional or representative basis in accordance with democratic principles.
Delivery service to members:
Access to finance
Membership in a savings and credit cooperative is voluntary and open to anyone who meets the common interests of the cooperative and accepts related responsibilities. Savings, credit cooperatives and other cooperative financial institutions do not discriminate against members in any form (but not limited to) on the basis of race, ethnicity, age, sex, religion or political affiliation. Savings and credit cooperatives provide access to financial services to all, including those who do not have access to services.
Building financial capacity through adequate resources and an internal control system is the key to providing long-term, sustainable services to its members. The cooperative must pay a reasonable and sufficient deposit interest to its members from its operating income, cover all operating expenses and risk costs, and allocate a reasonable dividend to the members' equity, leaving a net income sufficient to meet the reserve level.
High economic benefits to members
Adequate interest rates should be set to raise funds for loans and other services by encouraging savings and creating savings. In addition to ensuring the financial stability of the cooperative, the terms of service and pricing are aimed at improving the economic and social well-being of all members.
Basic financial knowledge
Savings and credit cooperatives provide their members and employees with knowledge about the economy, society, democracy, and professional development. Basic financial literacy training aims to provide members with knowledge on loan use and savings, savings and liabilities, and how to properly plan and budget their finances. This knowledge and skills aimed at empowering members will help them manage their financial resources effectively and in accordance with their needs, and make effective and wise decisions. Savings and credit cooperatives also provide their members with knowledge about their rights and responsibilities.
Savings and credit cooperatives combine resources and experience to provide the best services to their members, and work with associations and other cooperatives at the local, national, and international levels to maintain the principles of the cooperative and create economic benefits.
Cooperative ethics is the idea of self-help, mutual assistance, and economic power. The vision of economic power applies to both the individual member and the community in which they live and work. Savings and credit cooperatives promote a fairer, healthier, and more prosperous growth for themselves and their members.
This vision is to create, protect, promote and expand global integration that improves the lives of the world's population through cooperative financial institutions.
This explanation is given by the World Association of Savings and Credit Cooperatives (World Council of Credit Unions, WOCCU).