Financial Cooperative Theory

Financial Cooperative Theory explains how individuals or organizations form cooperative financial institutions, like credit unions, to serve members' shared financial needs. By pooling resources and making collective decisions, members benefit from better interest rates, lower fees, and access to financial services that might not be available through traditional banks. This theory emphasizes the principles of cooperation, mutual benefit, and democratic control—members are both users and owners of the institution. The goal is to create a financially sustainable organization that prioritizes members' interests over profit, fostering trust and stability within the community.