Brasília, May 14, 2004 (Agência Brasil) - The Organization of Brazilian Cooperatives (OCB) registered a 29.6% expansion in the sector last year, compared to 2002, and believes that this year's growth will be even greater, as a result of a National Monetary Council (CMN) resolution last June making access easier to the cooperative system.

Optimism was voiced by the OCB's economic advisor, Evandro Ninaut, who said that the creation of new cooperatives is easier, despite some difficulties in the sphere of taxation. But, in general, the evolution is clear when one observes the figures of the Department of Norms of the Central Bank (BC), which registered the constitution of 25 credit cooperatives in 2003, as against the more than 28 that have been started in just the first quarter of this year. This brings the total number of credit cooperatives listed with the BC through March to 1,427.

Nunes points out that the expansion of the sector is in full swing in Brazil, even though its performance is modest compared with countries with a cooperative tradition, such as Germany, where credit cooperatives account for 20% of all financial and banking activities, or the Netherlands, where cooperatives handle practically all of the country's rural financial requirements.

In Brazil credit cooperatives are responsible for slightly over 2% of credit operations in the National Financial System (SFN). But, compared with 1995, when this participation represented only 0.47% of total credit operations, the system has more than quadrupled in eight years. In all, the cooperatives have 6.3 million associates and are responsible for 110 thousand direct jobs.

To provide an even greater impulse to the sector, the CMN, at it meeting last March, authorized Brazil's only two cooperative banks (the Bancoop, in Brasília, and the Bansicred, in Porto Alegre) to operate as well in the capture of savings to apply in the rural sector.

Ninaut emphasized that the sector has a strong growth potential, and he commemorated the recent announcement by the BC's director of Norms, Sérgio Darcy, that over 56 requests from credit cooperatives to begin operations are awaiting approval.

Translator: David Silberstein