engleski

Financial Cooperatives Development in Croatia: Social Capital Perspective

Financial cooperatives are member-owned institutions that operate on seven principles, all of which depend on social capital. The paper aims to establish the relationship between social capital and the depth of the financial cooperative sector, analyse both concepts and assess the development prospects of financial cooperatives in Croatia from a social capital perspective. Also, the purpose of the paper is to highlight the role of social capital—that per se generates positive externalities on economic growth—in the development of financial cooperatives, which further foster regional development, mitigate intertemporal risks, provide greater community resilience and have a positive impact on GDP growth. Cross-country analysis will be performed using descriptive statistics to present secondary data related to both concepts, for the Republic of Croatia and the rest of the EU-27 countries. One could conclude that Croatia has low levels of both bridging and linking social capital, and at the same time, that cooperative and mutual sector are poorly developed. Therefore, to boost economic growth, public and local policies should concentrate on the development of social capital in the region, which would also increase people’s willingness to form financial cooperatives, as well as other forms of social economy necessary to enhance sustainable economic growth.

Financial cooperatives ; Social capital ; Community development ; Financial inclusion ; Co-operation

nije evidentirano