Cooperative Bank Sustainability after Demutualization
Strategies and Indicators.
DOI:
https://doi.org/10.58547/4278fq84Keywords:
Demutualization, Sustainable Cooperatives, Banks, Strategies, IndicatorsAbstract
A fundamental shift in cooperative governance improves market share, financial service provision, product cost control, and enhances financial stability. However, despite ongoing efforts toward structural ownership changes among cooperative banks, governance and compliance gaps continue to hinder the sustainability of the cooperative banking system. The study examined sustainable strategies and indicators in the transition of a demutualized local cooperative bank to a National Cooperative Bank (NCB). The study employed purposive and simple random sampling to collect data via questionnaires from 54 cooperative societies and 162 cooperative leaders. Exploratory factor analysis was conducted to identify strategies that enhance bank sustainability. The study employed a binary multiple regression model to analyze sustainability indicators. Results indicate that effective bank operations, inclusive management, and strict adherence to implementation processes are critical strategies influencing the sustainability of the National Cooperative Bank (NCB). Externalities, financial crises, and financial markets were found to be significant indicators (P <0.05) influencing NCB sustainability. Lastly, prior to the NCB take-off, financial crisis mitigation and risk assessment strategies are recommended. Cooperatives and policymakers are advised to ensure that the cooperative identity is maintained through integrated training on bank governance conducted by cooperatives. Further, perception of mergers and acquisition by NCB and non-cooperative shareholders is recommended for further study.
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