Genossenschaften

1

German Cooperative and Raiffeisen Confederation
Deutscher Genossenschafts- und Raiffeisenverband
e.V.
2
Introduction of the DGRV

• Confederation of cooperatives whose origins go
  back to F.W. Raiffeisen and H. Schulze-Delitzsch
• Top-level association and legal auditing
  federation of the German cooperative organisation
  (with more than 16.8 mio. members and 650,000
  employees the largest business organisation in
  Germany)
• Number of employees at DGRV per 31th December
  2006
• 78 employees in Germany and
• 15 expatriates and 55 locals in projects

3
Members of the DGRV

• DGRV has 73 members
• National federations (BVR, DRV, ZGV, ZdK)
• Regional and auditing federations
• Regional and national centres
• Central and specialised companies

31th December 2006
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Basic Statutory Tasks of DGRV

• Promotion and strengthening of the cooperative
  movement and of the cooperative auditing system
• Representation of members interests in economic,
  legal and tax-related issues
• Auditing of the end-of-the-year financial
  statements and special auditing
• Cooperative development and consulting activities
  abroad
• Coordination of training services

Promotion of members interests
5
DGRV Know-How
Services of DGRV

• Auditing
• Lobbying
• Accounting
• Legal advice
• Tax advice
• Promotion of cooperative systems abroad
• Human resource development

6
Accounting

• Members and clients support in the transformation
  of
• accounting standards
• auditing standards
• regulations of the bank and financial market
  supervisory authority
• professional regulations
• Expertise on national and international
  developments in accounting issues
• Quality control in matters of accounting and audit

7
Auditing

• DGRV is the auditing federation for cooperative
  organisations
• Mandatory auditing according to 53 of the
  German cooperative law
• Audit of the annual statement of the corporate
  group
• Special business reporting requirements
• Securities account audit
• Revision activities
• Safe-custody account audit
• Cooperation with DGR Audit company

8
Legal Advice

• Legal advice for members
• Legal expertise
• Negotiation of framework contracts for the
  overall organization
• Lobbying in legal issues on national and European
  level
• Administration of GenoRechtnetwork

9
Tax Advice

• Follow-up of new developments in tax-issues
• Expertise about specific fiscal questions
• Conception of training documents
• Performing of seminars

10
International Activities of DGRV (Examples)

• Support of German and foreign cooperative
  enterprises in international activities (contact
  mediation, exchange of information initiation of
  transactions included)
• Exchange of information with cooperative
  organisations in other countries and
  international cooperative organisations, e.g.
  European Association of Cooperative Banks (EACB),
  COOPSEUROPE, International Raiffeisen Union (IRU)
  and International Cooperative Alliance (ICA),
  etc.
• Advisory and development projects (international
  programs) in cooperation with BMZ and various
  Federal Ministries, EU, World Bank, GTZ , KfW,
  Inter American Development Bank, Asian
  Development Bank, etc.

11
Human Resource Development

• Promotion of education and training services for
  members
• In close cooperation with the national Academy of
  German Cooperatives (ADG)
• coordination of curricula and HRD activities for
  cooperative banks and rural commodity
  cooperatives
• training of cooperative auditors

12
Savings and credit cooperatives in the Past and
Present

• The first cooperatives were founded more than 140
  years ago as a reaction to the economic and
  social problems, i.a. due to the peasants
  liberalisation, the industrialisation and new
  economic freedom.
• Savings and credit cooperatives took savings and
  granted loans they were the first microfinance
  institutions besides Sparkassen (savings banks)
  in the world.
• In many countries savings and credit cooperatives
  are important financial intermediaries who
  provide access to financial services,
  particularly to microcredit, to broad groups of
  population.

13
The Origins of the GermanCooperative System 1/3

• Friedrich-Wilhelm RAIFFEISEN (1818 1888)
• worked in rural areas
• tried to reduce poverty by forming charitable
  organisations
• no sustainable results by charity
• developed idea of self-help
• organised self-help organisations for small
  farmers
• problem lack of access to credit
• 1864 Raiffeisen sets up first savings and credit
  coop. for farmers rural population
• starting-point for cooperative enterprises
• access to credit
• mobilisation of local savings
• self-help institutions, self-responsible,
  self-governed

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The Origins of the GermanCooperative System 2/3

• Hermann SCHULZE DELITZSCH (1808 1883)
•  
• worked in urban areas
• similar approach as Raiffeisen
• organised self-help organisations for small
  craftsmen and merchants in urban areas
• 1850 first savings and credit coop for craftsmen
  and merchants
• aim of coops support to the individual economic
  activities of the members of a coop (bulk-buying,
  access to financial services)

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The Origins of the GermanCooperative System 3/3

• Rapid growth of coops in Germany
• 1870 80 coops
• 1889 1,600 coops
• 1925 21,000 coops
• 1870ies Some coops in crisis, Management problems
• Raiffeisen and Schulze-Delitzsch introduce
  regular audit of coops
• 1889 National Cooperative Code Legal framework
  for coops as enterprises regular audits required
• 1890 1920ies Steady growth of the cooperative
  organisation
• Late 1920ies Again coops in crisis
• Amendment of Cooperative Act Mandatory audit for
  coops by cooperative auditing federations
• 1937 Start of the Deposit- and Protection System

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Cooperative

• Corporate tradition
• Corporate experience
• Reference to members
• Professionalism
• Support by confederation and network partners
• successful type of enterprise
• in the past, present and future

• Self-help
• Self-governance
• Self-responsibility
• Promotion task (Förderauftrag)

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Key Elements of German Cooperatives Success

• Decentralised, multilevel system
• Adequate legal basis
• Regulation and supervision
• Compulsory audit by coop. federations
• Institutional protection scheme (incl. savings
  guarantee system)
• Training/Qualification

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Key elements of the cooperative audit

• Financial audit
• Audit of the annual statement
• Organisation and supervision of the coop
• Capital and liquidity requirements (banks)
• Large exposure regulations (banks)
• Special reporting requirements
• Licensing etc.
• Management audit
• business structure, assessment of the
  institution, the organisation of internal
  procedures, management mechanisms and activities,
  management policy etc.
• Other specialised audits (banks)
• Safe-custody account audits
• Money laundering
• Deposit guarantee scheme etc.

19
The Cooperative Sectorin Germany (overview)

• Cooperative banks
• 1,255 cooperative banks with 13,765 outlets
• 2 cooperative central banks
• 30.5 million clients, 15.9 Million members

• Rural Raiffeisen cooperatives
• 3,188 Raiffeisen cooperatives, 24 central
  enterprises
• 38.3 billion turnover

• Small-scale industry commodity and service
  cooperatives
• 1,003 cooperatives, 200,000 members, 7
  central cooperatives
• 95.0 billion turnover

• Consumer cooperatives
• 108 cooperatives, 970 outlets, 700,000
  members
• 2.0 billion turnover

• Housing cooperatives
• 1,961 cooperatives, 2.9 million members
• 2.15 million apartments and houses

per 31st Dec. 2006
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The Cooperative Sector in Germany
National level
22 central and specialized companies
Regional level
34 specialised regional institutions
6 specialised auditing federations
8 regional auditing federations
21 Raiffeisen central coops
1 regional central bank
7 central industry commodity coops
Local level

3,188 Raiffeisen coope-ratives incl. 925
agricult. production coops
1,255 Volksbanks and Raiffeisenbanks with 13,765
outlets
996 small-scale industry commodity and service
cooperatives and 108 consumer coops
214 with banking activit.
214 with agric. commerce
per 31st Dec. 2006
21
The Cooperative Financial Network (Finanzverbund)
Specialized affiliated enterprises
National cooperative central bank DZ-Bank
Regional cooperative central bank
1,255 l o c a l c o o p e r a t i v e b a n
k s, 13,765 o u t l e t s ( Volksbanks and
Raiffeisenbanks, Sparda-Banken, Post-Spar- und
Darlehensvereine)
Auditing federation of the Sparda-Banken
7 regional auditing federations (Baden, Bavaria,
Hesse/Rhineland-Palatinate/Saarland/Saxony/Thuring
ia, North Germany, Rhineland/Westphalia,
Weser-Ems, Württemberg)
Auditing federation of the Post-Spar-Darlehensvere
ine
National Association of Volksbanks and
Raiffeisenbanks
German Cooperative and Raiffeisen Confederation
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General Structural Problems and Poverty

• Global and national structural problems induce
  negative effects mainly in rural regions
• They cause poverty of broad groups of population
  (migration into cities, urban bias etc.)
• They cause problems particularly for micro and
  small enterprises, i.a. due to insufficient
  resources and lacking access to
• financial services
• working equipment and sales
• new technologies
• know-how

23
Development Activities of DGRV

• Technical Assistance in line with development
  approaches of the German government
• Commitment to the Millennium Development Goals
• Orientation on
• the policies / strategies of the BMZ (e.g. AP
  2015, Sektor-konzepte such as Financial System
  Development) as well as the United Nations (e.g.
  Monterrey, etc.)
• The experiences of German and international
  cooperative organisations
• DGRV cooperates as technical advisor with BMZ and
  other Federal Ministries, KfW, GTZ, World Bank,
  etc.
• Important instrument / element is the support of
  social structures and financial system development

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Support of Social Structures throughDGRV Projects
Support of social structures

• is an instrument to fight against poverty,
• aims at participation in the process of social
  and economic development for broad parts of the
  population, especially the poor,
• contributes to the fight against the origins and
  consequences of social and economic
  discrimination,
• contributes to the strengthening of the will for
  self-help and mobilisation of self-responsibility,
  
• aims at the improvement of the framework
  conditions to achieve sustainable structure
  building impacts,
• contributes to global structure policies and
  security of the future.

DGRV is member of AGS, the pool of technical
institutions to support social structures in
developing countries
25
Financial System Development

• Improving the access for a broad group of
  excluded persons to financial services, esp. SME
• Providing an institutional environment to
  strengthen the stability and the capacity of the
  financial system
• Multilevel and System Approach Development and
  promotion of cooperative financial networks (with
  central units)
• Special topics audit, supervision, microfinance
  (credit, savings, insurance, remittances)

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Basic Concept forDevelopment Services of DGRV
Long-term goal Participation of broad groups of
population in the economic and social development
for the improvement of economic and social
conditions of poor people through structural
changes
Goal Support and set-up of sustainable and
self-supporting coop. organisations and their
federations

• through
• Advice when working out a legal framework (i.a.
  supervision, auditing)
• Advice / support when setting-up coop. link-up
  systems

• Direct target groups
• Members / potential members and customers of
  cooperatives and coop. SHOs
• Cooperatives and coop. central institutions
  including coop. federations and / or specialized
  institutions

• Indirect target groups
• Policy makers
• Ministries, central banks, bank supervisory
  authorities

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Multilevel Approach in Setting-up Cooperative
Financial Systems

• Central and regional governments, ministries,
• central bank / supervisory authorities
• Legal framework for cooperatives, for SME and
  rural finance institutions
• Regulation, rules, supervision, licensing,
  norms, standards
• Refinancing programs, support, coordination

Lobbying
National federations (with different services,
i.e. consulting service, audit)
National cooperative central bank
Shares
Shares
Services
Services
Bottom up
Regional cooperative central institute (bank)
Regional federations (with different services)
Top-down
Relations based on subsidiarity principle
Shares
Shares
Services
Services
Local cooperatives (Savings and credit, agricult.
rural services, small-scale industry commodity
and services)
Shares
Services
Members / Clients of local cooperatives (SME,
farmers, population)
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Support of Cooperative Systems by DGRV
Structures of the cooperative Systems / Services
Contributions of DGRV
Business activities (e.g. central institution)
Non-business activities (e.g. federation)

• Consulting through long-term and short-term
  experts
• Seminars
• Training material
• Reports and expertises
• Supply of materials
• Cooperation with central banks and bank
  supervisory authorities
• Internships and study visits in Germany or in
  various countries (South-South cooperation)
• Partnerships and cooperations
• Software tools

Liquidity
Training
Refinancing
Auditing
Payment systems
Credit funds
Consulting
Business activities (e.g. commodity purchase
centre )
EDP / Informatics
Centralised buying
Deposit guarantee Protection of institutes
Centralised marketing
Processing

• L o c a l c o o p e r a t i v e s
• savings and credit (i.a. microfinance)
• purchasing and marketing etc.

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Thank you! Name Email Deutscher Genossenschafts-
und Raiffeisenverband e.V. (DGRV) International
Relations Department and Development
Services Adenauerallee 121 53113 Bonn Tel. 0049
(0) 228 8861 352 Fax [phone]