The Determinants of Cooperative Banks’ Community Service—Empirical Study from Poland

Marta Idasz-Balina,Grażyna Chrostowska-Juszczyk,Iwona Błaszczak,Noer Azam Achsani,Rafał Balina

doi:10.3390/su12051885

Abstract

This research concentrated on the socio-financial qualities of Poland’s co-op banking. The study’s results enabled answering the question of whether the cooperative banks (co-op banks) are exclusively focused on maximum financial effectiveness or faithful to the idea of cooperation, which basically means supporting its membership and community development. The main objective of the study was to determine the influence of internal factors on initiated support to the community within the framework defining the activities pertaining to a business’s social responsibility, as seen for Poland’s co-op banks. A seven-year study period was adopted, i.e., 2011–2017, inclusive. The research indicated that the co-op banks decide about a sum of contributions for community initiatives based on their current condition—according to current profits, current credits volume, total accounts number and considering financial security as expressed by the level of the solvency coefficient of the previous year.

Highlights

Introduction and Literature ReviewHow cooperative banks function is based on complex theoretical fundamentals, and their identification requires consideration of at least two aspects, i.e., financial and social [1]
It is worth stressing that the problem of financial exclusion is widespread, especially after the socialistic period that has occurred in Poland; this affects rural and urban–rural areas, i.e., the areas of operation in which cooperative banks cannot fully fulfill their roles due to legal, organizational and business constraints
The survey was focused on social issues, like the number of accounts, number of bank members, total sum contributed by a bank for prosocial activities, the number of supported prosocial initiatives and the relationship of funds contributed to prosocial activities with the bank’s net profits (%)

Summary

Introduction

Introduction and Literature ReviewHow cooperative banks function is based on complex theoretical fundamentals, and their identification requires consideration of at least two aspects, i.e., financial and social [1]. Cooperative banks (Co-op banks) operate based on self-help and mutual support combined with activity for the benefit of its members, markets and community. They reflect the generally understood concept of corporate social responsibility, currently so appealing to commercial banks endeavoring to increase their market share. It must be emphasized that cooperative banks aim mainly to promote markets and local communities Their activity is directly linked to local development and the social and economic development of the country. A well-functioning cooperative banking sector is a part of the ecosystem of social and economic activity, primarily in rural and small-town areas, and supports sustainable development initiatives

Objectives

Methods

Results

Conclusion