IMPACT OF SAVINGS AND CREDIT COOPERATIVES IN SEGMENT 5 ON THE ECONOMIC DEVELOPMENT OF ECUADOR, PERIOD 2019-2024

Abstract

Savings and credit cooperatives in Segment 5 are the smallest entities within Ecuador’s Popular and Solidarity Financial Sector. Their strong territorial proximity enables them to enhance access to savings and credit services in rural and peri-urban areas where commercial banking presence remains limited. Nevertheless, these cooperatives face significant challenges in solvency and management, resulting in liquidation and consolidation processes. This study examines the impact of financial intermediation by Segment 5 cooperatives on Ecuador’s economic development during the period 2019–2024. A longitudinal, non-experimental quantitative design was employed. The dataset combined financial information from the Superintendency of Popular and Solidarity Economy (SEPS), national accounts from the Central Bank of Ecuador (BCE), and labor market indicators from the National Institute of Statistics and Censuses (INEC). Using 220 panel data observations, fixed effects models were estimated. For robustness, a dynamic panel model was applied using System GMM. The results indicate a positive relationship between deposits mobilized by these cooperatives and macroeconomic performance: a 1% increase in savings captured is associated with an approximate 0.31–0.34% rise in real GDP. Loan placements also show a positive, albeit smaller, effect. Additionally, a favorable impact on employment was observed, particularly in territories with low banking density. Overall, the evidence suggests that Segment 5 cooperatives play a relevant role in stimulating local economies. The study recommends strengthening institutional sustainability through consolidation processes that preserve territorial coverage and financial inclusion