Zvi Galor

Expert in cooperative development



International Consultancy


Internet Publications






last update: December 16th 2002

The cooperative is probably one of the only means by which poor individuals can escape their poverty and go on to develop themselves, their families, and their countries.


Cooperative Management and Financial Management:

Cooperative belongs to its members.
Cooperative renders to its members the best possible service at the lowest possible cost.
These two very important characteristics are not part of most cooperatives in the world.
The approach to cooperative development I bring puts emphasize on these two major components of what is a cooperative.

Cooperative Legislation:

One of the problems of most cooperatives worldwide is that the misunderstanding of what real cooperatives are, on one hand side, and the reticence of many to a move forward in turning their cooperatives into real ones, on the other hand, is the fact that cooperative legislation in most countries represent a wrong approach of what is a cooperative.

There are some countries where cooperative legislation is moving towards the right direction according to the new approach brought here.

Micro-Credit and Real Saving and Credit Cooperatives (SACCO):

1. The MicroCredit enterprise belongs to its members, and provides them the best possible service at the lowest possible cost.

2. The MicroCredit enterprise allows its members-owners to save their money at a competitive rate of interest, the highest possible one. A rate of interest which takes into consideration the rate of annual inflation in the given country where this enterprise exists, as well as to be higher than that offered by any other financial institution for fixed deposits..

It allows them to obtain credit when necessary, at a competitive rate of interest, the lowest possible one.


Self-Owned Economic Common Enterprises (S.E.CO):

The members are the full ownership of the cooperative. Each member is the owner of his own equal share in the cooperativeís total assets, and the total assets of the members are equivalent to the total assets of the cooperative. Each member owns an equivalent, single share of the cooperative ñ no more and no less, and he or she acquires this share through cash payments or through credit provided to him by the cooperative itself.

The number of shares is exactly the same as the number of the cooperativeís members.


Non-Agricultural Employment in Rural Areas (N.A.E.):

Development of rural areas should comprises the introduction of the Non-Agricultural Employment (N.A.E.) in the process of the national policy of the development of the rural areas.

The traditional population is forced, in many cases, to quit its rural communities, where almost no development takes place, and to migrate to urban areas, where no employment is guarantee, and as consequence, they are integrated into the marginal part of their societies.


The Essential Triangle of Production (E.T.P.):

The Essential Triangle of Production, comprises the Credit, the Supply of Inputs and the Marketing, all these three elements around the Production.

A project which is unable to close the three sides of the triangle into one, has a great risk to fail.

Poor people are unable to close by themselves the triangle. One of the ways poor people may get out of their poverty is the cooperative way, when a group of poor, would collaborate together to create a very simple Multi-Purpose cooperative, one which will comprise the following functions: Production, Saving and Credit, Supply of Inputs and Marketing

Non-Bargaining Activities of Trade Unions:

Trade Unions in most countries are concentrate in the classical task: defending the interest of their members, mostly wage-earners. It is called as well the Bargaining Activities of Trade Unions.

This way is rather limited in its ability to bring positive results to members. The employers, the biggest is the government, are not tending to improve the sort of the employees. When the workers get anything, partly, it goes to income tax authorities. What is left to the wage-earner is always less than what they have expected to get.

Another option is the Non-Bargaining Activities of Trade Unions. The Trade unions themselves create Economic and Social Enterprises whose role is to serve the members of the Union at the best possible way, and at the lowest possible cost.

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