Scaling cooperative banking frameworks to support MSMEs, foster resilience, and promote inclusive financial systems across emerging economies
MSME Partnerships & Cooperatives Business Development at Sterling Financial Holdings Company, Nigeria.
Review Article
World Journal of Advanced Research and Reviews, 2024, 23(01), 3225-3247
Publication history:
Received on 10 April 2024; revised on 23 July 2024; accepted on 28 July 2024
Abstract:
Micro, Small, and Medium Enterprises (MSMEs) constitute a vital pillar of emerging economies, driving job creation, innovation, and local value addition. However, they often face systemic exclusion from traditional banking systems due to high collateral requirements, limited credit histories, and volatile economic environments. These challenges have underscored the need for inclusive financial frameworks capable of offering affordable, sustainable, and resilient financing solutions. Cooperative banking models, rooted in community-based governance and member-oriented principles, have increasingly emerged as viable mechanisms for addressing such gaps. This article explores the scaling of cooperative banking frameworks as a strategic pathway for expanding MSME financial access while strengthening resilience against systemic shocks. It highlights how cooperative banks can bridge the financing gap by pooling community resources, promoting shared risk management, and tailoring credit products to the specific needs of MSMEs. At the same time, partnerships with government institutions, fintech innovators, and international development agencies are shown to enhance scalability, digital integration, and regulatory compliance, enabling cooperative banks to operate effectively within broader financial systems. Through the integration of resilience-building mechanisms such as diversified credit portfolios, collective savings schemes, and digital platforms cooperative banking frameworks can promote long-term financial sustainability. Case evidence from emerging economies demonstrates how scaled cooperative models contribute not only to MSME growth but also to broader objectives of financial inclusion, social equity, and sustainable economic development. By situating cooperative banking as a cornerstone of inclusive finance, this paper emphasizes its potential to transform fragmented financial access into a resilient, community-driven ecosystem for MSMEs across emerging markets.
Keywords:
MSMEs; Cooperative banking; Financial inclusion; Resilience; Emerging economies; Sustainable finance
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0