The cooperative sector in Guatemala faces significant challenges, with 1,384 out of 2,648 registered cooperatives deemed inactive, according to the National Institute of Cooperatives (Inacop). Internal issues, lack of capital, and insufficient support from public institutions have contributed to this stagnation. Notably, 39% of inactive cooperatives are in the savings and credit sector. In contrast, 1,264 active cooperatives continue to provide essential services across various sectors. As part of efforts to revitalize the cooperative landscape, Inacop plans a collaborative census by 2025, the first since 2008, alongside modernization of its registration systems. Simultaneously occurring, 14 cooperatives are currently undergoing liquidation, highlighting the urgent need for reform and support within the sector.
Insights from the Cooperative Sector in Guatemala: an Interview with Cooperatives Expert Dr.Maria Santos
Editor: Thank you for joining us today,Dr. Santos. The statistics from the National Institute of Cooperatives reveal that a staggering 1,384 out of 2,648 registered cooperatives in Guatemala are inactive. What do you think are the core reasons behind this stagnation?
Dr. Santos: Thank you for having me. The high number of inactive cooperatives primarily stems from several interconnected issues.Internal challenges, such as poor management and lack of member engagement, play a significant role. Moreover, the cooperatives frequently enough face capital constraints, which restrict their ability to operate effectively. Another critical factor is the insufficient support from public institutions, which hampers their growth and stability.
Editor: This stagnation notably affects the savings and credit sector, where 39% of inactive cooperatives are found. Can you discuss the implications of this for individuals who rely on these services?
Dr. Santos: Absolutely.The inactivity of savings and credit cooperatives is concerning as these entities provide essential financial services, especially in rural areas where access to customary banking is limited. Inactivity means that individuals and small businesses may struggle to find reliable financial resources,which can drive them toward expensive informal lending options. This can perpetuate cycles of debt and limit economic growth in these communities.
Editor: There are plans for a collaborative census by 2025, the first since 2008.How do you see this initiative impacting the cooperative sector in Guatemala?
Dr. Santos: The upcoming census is a crucial step toward revitalizing the cooperative landscape in Guatemala. It will provide updated data on the status of cooperatives, which is vital for assessing their needs and challenges. This information can inform policymaking and help public institutions design tailored support programs. moreover, modernizing the registration systems will streamline operations and encourage more cooperatives to reactivate or form anew.
Editor: With 14 cooperatives currently undergoing liquidation, what urgent reforms do you believe are necessary to support the sector?
Dr. Santos: There is an urgent need for comprehensive reforms targeting governance structures, financial management training, and access to capital. Training programs can enhance the skills of cooperative leaders and members, while improved access to micro-loans and grants from government and NGOs coudl help stabilize these cooperatives. Additionally, fostering a supportive legal framework, as highlighted by initiatives under USAID’s Cooperative Advancement Program, can considerably strengthen cooperative resilience and functionality[1].
Editor: As an expert in this field, what practical advice can you offer to new cooperatives embarking on this challenging landscape?
Dr. Santos: new cooperatives shoudl prioritize strong governance and member engagement from the start. They should also seek collaborations with established cooperatives to benefit from shared knowledge and resources.Additionally, fostering relationships with local governments and organizations can open doors to funding and support networks. By focusing on education and training, cooperatives can build a solid foundation and increase their chances of long-term success.
Editor: Thank you for your valuable insights, Dr. Santos. the cooperative sector’s potential for community empowerment is significant,and we appreciate your expertise in shedding light on the challenges and opportunities within it.
Dr. Santos: Thank you for the opportunity to discuss this crucial topic. Together, we can advocate for a stronger cooperative movement in Guatemala.