Financial co-operatives and rural development in Greece
2010-03-15T10:12:32Z (GMT) by
The present research work has set to examine the performance of Greek co-operative banks and their importance for the development of the local areas they serve. The decade of the '90s can be regarded as the one in which Greek co-operative banks has actually emerged and made their first successful steps. Three credit co-operatives at the beginning of the decade were transformed into cooperative banks in 1992 when the legal framework provided such an opportunity. At the dawn of the new millennium there were 15 co-operative banks, all located at provincial towns. Within this period they have managed to build their apex institutions, a national association and their central bank. In order to form the framework of analysis, the research approach focussed on the dual capacity of co-operative banks i.e. as a local grass-root initiative and as a local financial intermediary. It questioned, from a theoretical and from a policy implementation perspective, the characteristics that a local initiative should enjoy in order to contribute to local and regional development. On the other hand, it tried to explore the potential of a local bank in a rapidly changing European banking market. The history and experiences of financial co-operatives under different settings has been used as a reference point for comparisons and necessary evaluations. This work examines the guidelines for the evaluation of the performance of the Greek co-operative banks. However, as this thesis is the first systematic approach of the co-operative banking in Greece, it had to provide evidence for the reasons that delayed their appearance until 1993 and for the reasons that made their entrance in the market possible. These required a review of the evolution of the Greek banking system and of the historical developmental conditions in order to be addressed. Field work comprised two surveys conducted by the researcher. The first was addressed to the fifteen co-operative banks. With the second survey, the researcher approached a stratified sample of 308 members, whom he contacted for personal interviews on the basis of a structured questionnaire. Information derived from these surveys along with secondary data that were collected from various sources, were used for the evaluation of the performance of the Greek co-operative banking system. The analysis showed that Greek co-operative banks are still found in a period of transition. This rather concerns internal growth strategies and policies to strengthen their position at local markets and less the possibility of new entrances in the local scene. Moreover, there appears to be a wide gap in the performance of various initiatives that stress for the necessity of strengthening further their organizational structure. On the other hand, the analysis provided evidence for a performance that can alter essentially the quantitative and qualitative characteristics in the local context and influence positively the development process in the periphery. In order to retain their ability to influence the financial markets and the development process, the Greek co-operative banks would have to create strong links with local people. Building a co-operative corporate identity is regarded as the most promising direction for them to follow in order to signal their difference in a highly competitive banking market and within a most demanding rural development context.