Cooperative bank strategies for social-economic problem solving: Supporting social enterprise and local development

Abstract

The strategies cooperative banks use to address local socio-economic challenges through the financing and promotion of cooperatives, socially oriented enterprises and local development initiatives are investigated. Two paradigmatic regions with strong cooperative bank sectors are compared, illustrating strategic differences in their approach to cooperative and social enterprise promotion and local development. The cooperative bank sector in the first region, Almería, Spain, has followed an aggressive growth strategy, both in terms of size and territory, resulting in a large and nationally present cooperative bank. In contrast, the cooperative bank sector in the province of Trentino, the most important region for cooperative banks in Italy, is comprised of many small scale cooperative banks, organized by consortium and tightly tied to territory. Related lines of inquiry include the trend of focusing on corporate social responsibility as opposed to local development and the relationship among different types of complementary actors in order to understand the process of promoting sustainable community development. As well, we comment on the relevance of other types of ‘alternative finance‘ in supporting such goals. These issues are particularly relevant given limited government resources to deal with pressing social and economic issues.