Functional models for the development of rural credit cooperation as a niche mechanism for ensuring financial inclusion
Abstract The relevance of the topic of this article is determined by the importance of maintaining and developing credit cooperation as a niche financial instrument that contributes to the increased availability of financial services for rural residents and small agribusiness. The purpose of the study is to highlight and reveal the content of the main functional strategies for the development of the operational activities of rural credit cooperatives based on a generalization of accumulated practices. The used research methods include abstraction, generalization, formalization, analogies and other theoretical and general logical methods. A five-element model for the development of rural credit cooperation has been developed, which differs from the known ones by the inclusion of three "horizontal" strategies (mobilization mechanism, transmission mechanism, internal multifunctionality), describing promising directions for the development of rural credit cooperation in the functional area, and two "vertical" strategies (hierarchy and inter-cooperative integration ones) systematizing organizational alternatives. For the "mobilization mechanism" strategy, aimed at mobilizing internal financial resources and organizing mutual lending, external and internal mechanisms for protectingthe funds (savings) of shareholders have been developed. For the "transmission mechanism" strategy, which involves the use of external borrowing to expand indirect access to bank loans, restrictive and security instruments have been proposed. Within the framework of the "internal multifunctionality" strategy, which involves the development of activities not related to the organization of mutual financial assistance, its inexpediency is justified with the proper development of other types of consumer cooperation.
Keywords: credit cooperation, agricultural credit consumer cooperatives, financial institutions, savings contributions, microloans, financial standards, personal savings guarantee system, financial inclusion.
Highlights:
♦ rural credit cooperation is developing as a niche mechanism for ensuring financial inclusion in rural areas. From the point of view of the institutions being implemented, rural credit cooperation performs economic and social functions; in organizational terms, it is represented by a set of cooperative organizations of different levels;
♦ a five-element model is proposed, includingthree "horizontal" strategies that describe promising directions for the development of rural credit cooperation in the functional area, and two "vertical" strategies that systematize organizational alternatives;
♦ mechanisms for protectingthe funds (savings) of shareholders within the framework of the "mobilization mechanism" strategy include financial standards, guarantees, insurance, reservations, strengthening of internal control;
♦ within the framework of the transmission mechanism strategy, restrictive and security instruments are required to ensure the preservation of the financial stability of credit cooperatives.
Dmitry A. Korobeinikov - Volgograd State Agrarian University, Volgograd, Russia