IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v191y2025ics0305750x25000804.html
   My bibliography  Save this article

Financial cooperatives and poverty mitigation during Brazil’s lost decade

Author

Listed:
  • Arestis, Philip
  • Phelps, Peter

Abstract

Over recent decades the growth of cooperative financial institutions has coincided with a decline in traditional banking in many developing and emerging countries. This paper investigates the monetary poverty implications of financial cooperative presence in Brazilian states over the period 2012 to 2022. Utilising new household survey microdata, we compute measures of poverty’s prevalence and severity at the state level, and combine this with different measures of financial cooperative presence in a panel-data analysis. At one level, our estimations indicate that financial cooperatives have significantly mitigated poverty’s prevalence and severity over the last decade, thereby adding support for the ‘bright side’ view of local financial institutions. Whilst poverty is lower in states with a denser presence of financial cooperatives, the poverty-alleviating effect is found to be stronger and more significant using a more moderate measure of income poverty. Consistent with Brazilian financial cooperatives’ strong local presence and socioeconomic objective function, our estimations also reveal larger poverty-mitigating effects in areas characterised by greater exclusion from Brazilian social safety nets, more localised employment structures, and less well developed public educational infrastructure. However, our results also indicate that financial cooperatives have been less well equipped to mitigate rising poverty amongst the poorest of the poor. Relevant policy implications emerge from our analysis.

Suggested Citation

  • Arestis, Philip & Phelps, Peter, 2025. "Financial cooperatives and poverty mitigation during Brazil’s lost decade," World Development, Elsevier, vol. 191(C).
  • Handle: RePEc:eee:wdevel:v:191:y:2025:i:c:s0305750x25000804
    DOI: 10.1016/j.worlddev.2025.106995
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X25000804
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.worlddev.2025.106995?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Poverty; Financial; Cooperatives; Panel data;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:191:y:2025:i:c:s0305750x25000804. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.