Few Canadians realize how significant a role co-operatives play as an economic driver. With more than 9,000 co-operatives, 18 million members and 155,000 Canadian employees, they generate in excess of $50 billion in revenue annually.
While this is impressive, one of the key themes discussed at the International Summit of Cooperatives is the challenge of access to capital. A panel discussion will look at the complex legal, financial, governmental and governance barriers unique to co-operatives, and examine new and creative approaches to co-op ﬁnancing.
Unlike publicly traded corporations that can raise funds through shareholders and other financial mechanisms, co-ops must rely on reserves of member contributions as the primary source of ﬁnancing, says Réal Bellemare, senior vice president of Desjardins Group. Canada’s first and the world’s fifth largest co-operative financial group with assets of $210 billion, Desjardins Group is an exceptional success story and role model to coops across North America and around the world.
Mr. Bellemare says he is proud that Desjardins has achieved one of the highest capital ratios and credit ratings in the industry and is considered the fourth safest and strongest bank in North America, according to Global Finance magazine and Bloomberg News.
Co-operatives often face stiff regulations that limit their access to capital, says Réal Bellemare, senior vicepresident of Desjardins Group. PHOTO SUPPLIED
While Desjardins is a dominant player, it cannot escape the fact that co-operatives face stiff regulations that vary provincially, constraining their ability to finance projects. “We recognize that with size comes responsibility, so we must ensure whatever future financing and capitalization tools are introduced, that they will protect Canadians’ money and provide peace of mind.”
More broadly, Mr. Bellemare believes that the future success of the co-operative movement is predicated upon its ability to adapt to a rapidly changing financial environment. Co-ops have to stay competitive, know their strength, listen and deliver exceptional services to their members, he says.
“Co-ops have to be profitable – they are not only competing with other co-ops, they are also competing with publicly traded corporations, so they have to offer exceptional services and competitive rates,” Mr. Bellemare says, adding that due to limited resources, they have to be highly strategic and selective in where they wish to specialize and invest their time and money. For example, Desjardins has earned a dominant market position in Quebec, with a 36 per cent market share in mortgage lending and 43 per cent market share in lending in the farming sector.
Mr. Bellemare also says it’s crucial to have ongoing dialogue with members to understand their needs today and anticipate future needs.