1. Quebec 2012 International
Summit of Cooperatives
Financing & Capitalization
Arnold Kuijpers
Rabobank Nederland

2. Success creates capital shortage (1)
Early stage (financial) cooperative:
•Limited number of services
•Small amount of customers; small scale
•Modest infrastructure
•Limited geographical spread
Capital intensity per member is low;
members can afford capitalization
Rabobank Nederland

3. Success creates capital shortage (2)
Sophisticated (financial) cooperative:
-Many and also complex services
-Many customers; economies of scale/ diversification
-Geographical spread
-Multiple channels; complex infrastructure
Capital intensity for members (<customers) is high;
members cannot afford capitalization.
Rabobank Nederland

4. Success creates capital shortage (3)
At some stage of development of the cooperative
the capitalization is at a bifurcation:
•External capital added, implying double orientation
regarding control and profit focus
•Internal capital only; growth restricted to
- capacity to retain profits and
- capacity and willingness by members to
provide additional capital
Rabobank Nederland

5. Conclusion
A successful and expanding (financial) cooperative,
that wants to stay a cooperative in the future,
will face a capital shortage at some stage of its
development with consequences for its strategy.
Rabobank Nederland

6. Mitigating practices
• Achieve high level of efficiency relative to
industry; creating high profitability; enabling high
addition to equity
• Increase number of members and subsequently
the volume of member capital
• Reduce activities for which the significance for
members is modest relative to the capital usage
Rabobank Nederland

7. Mitigating practices
• Achieve high level of efficiency relative to
industry; creating high profitability; enabling high
addition to equity
• Increase number of members and subsequently
the volume of member capital
• Reduce activities for which the significance for
members is modest relative to the capital usage
Rabobank Nederland