This report demonstrates that financial cooperatives can be sustainable providers of financial services in rural areas and development assistance needs to consider supporting them as a means to enhance access to rural finance. It does not suggest that financial cooperatives are the only providers or the preferred channel in all circumstances. For financial cooperatives to function as sustainable institutions, governments need to provide an enabling environment, not exercise excessive control that restricts growth and consolidation, and not use them as channels to provide subsidized credit.
This report summarizes and consolidates the findings of three Bank studies on poverty issues in Mexico, written as part of the second phase of this work: Urban Poverty, Rural Poverty, and Social Protection. It also expands on how Mexico will seek to use social protection policy as a vehicle for redistribution. Discussed in Chapter 1, the state has a clear role in providing risk-pooling mechanisms where private insurance markets fail (e.g., old age and health insurance), but the role of social protection policy in promoting redistribution is more an issue of national choice.