Amid new market realities, the cooperative model roves a competitive
QUEBEC, Oct. 11, 2012 /CNW Telbec/ - The post-2008 economic crisis has
negatively impacted the ability of all commercial organizations to
achieve adequate funding. The unique structure of cooperatives further
complicates this reality, and requires a customized approach to
overcome financing challenges. In response, large cooperatives are
gaining experience with external funding sources and innovative funding
instruments, and view these as critical to achieving their strategic
objectives says a new report by Deloitte. The study, Funding the future: Emerging strategies in cooperative financing and
capitalization, presents the results of the first global survey on cooperative funding
since the 2008 financial crisis. CFOs and senior executives from the
world's largest cooperatives were asked how their organizations had
fared during the crisis, and how their financing and capitalization
strategies were evolving to respond to new market realities.
This report focuses on two major areas - the need for funds and sources
of funds - and provides clear evidence that financing and
capitalization are becoming increasingly important for cooperatives.
The survey demonstrated that the cooperative structure places
additional constraints on the types of instruments and strategies that
can be employed. In order to meet their strategic objectives, the
world's largest cooperatives are using a more diverse array of funding
options and exploring the use of non-traditional funding instruments.
Only 35% of respondents are planning to use obligatory member capital
as an equity lever, in future, compared to 50% today. To compensate,
cooperatives are expanding the use of other types of equity
instruments. Fifty-three percent are planning to issue equity
instruments to external investors compared to 38% today. Funding via
international debt markets is also set to grow from 24% to 53%.
The survey confirmed that adherence to cooperative principles remains
strong. Recommitting to cooperative principles such as a longer-term
strategic and operational focus, member economic participation, and
cooperation among cooperatives were identified as value-added
approaches to solving a cooperative's capitalization needs.
Funding the future: Emerging strategies in cooperative financing and
capitalization will be presented at the 2012 International Summit of Cooperatives held
in Quebec City, Canada, during a conference by Chris Harvey, Global
Financial Services Sector Leader. "At Deloitte, we are delighted to
contribute to this historic event by furthering the dialogue on how
cooperatives can improve access to funding at a time when this issue is
emerging as a critical determinant of business strategy, success and
sustainability", says Harvey. "We encourage cooperatives to recommit to
cooperative principles to develop a distinct and sustainable advantage,
while engaging regulators to ensure that their unique structure is
reflected in new legislation."
For a more detailed discussion of Deloitte's analysis and
recommendations, read the full report at www.deloitte.com/ca/cooperative.
About the 2012 International Summit of Cooperatives
More than 2,500 decision-makers and influential figures from the
international cooperative and mutualist community will attend the 2012
International Summit of Cooperatives in Quebec City and Lévis, Canada,
from October 8 to 11, 2012. Under the theme "The Amazing Power of
Cooperatives," the Summit aims to offer solutions that will promote the
development and performance of cooperatives and mutuals so that they
are better prepared to meet the economic and financial challenges they
face. Visit: www.2012intlsummit.coop
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SOURCE: 2012 INTERNATIONAL SUMMIT OF COOPERATIVES
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