Cooperative banks are set to make a comeback, with regional meetings to inform the public scheduled for October, during which people will be able to sign up.
Learning from the disastrous past, which saw the collapse of the co-op banking movement with €7.5 billion in non-performing loans in 2018, the new cooperative will not make the same mistake of competing with the commercial sector of the banks.
The pancyprian society for the promotion of cooperativism was set up in 2021 and has been working towards opening the first cooperative bank, with an aim to give a fresh impetus to the economy.
Chairman of the society Panikos Hambas told daily Haravgi that the members of the society are individuals backed by trade unions and agricultural and professional organisations, such as the police, the fire department, teachers’ unions and the union of communities, which represent the workers.
Hambas said there was a great interest among people who wish to free themselves from the “suffocating hold” of commercial banks.
He added that all legal procedures will be followed before the first co-op opens.
The co-op will support those on low incomes and especially the younger generations, which cannot start a new life with loans from a commercial bank.
“Our aim through this cooperative is to support these people, to buy a house, to pay for education, to take their first steps in business, to cope with a medical issue etc.,” Hambas told Haravgi.
He added that everyone learnt their lesson from the past and that the re-establishment of the co-op in Pelendri was proof that the idea had not been lost.
Hambas pointed out that the impression given to the people that there were no co-ops in Europe was wrong and said a quick search on the web could dispel any doubt.
Financing the operation of the new cooperatives will demand capital, and Hambas said a large part would be covered by selling stocks.
Hambas clarified that shareholders would have one vote, irrespective of the number of shares they held.
Shares will be available for purchase online before the co-op opens. All money will be returned if the effort flops.
He also explained that the new company would not pay high salaries and would thus be able to sell its products to the people at lower prices than commercial banks.
This, he said, would not contradict EU legislation because the cooperative would operate based on the free market, which the EU adopted.
