Credit unions and savings and credit cooperatives are voluntary financial organizations owned and operated by members. Their purpose is to encourage savings by creating local deposit facilities and then using the pooled funds to make loans for productive, consumer or social purposes to their members. Primary level credit unions and savings and credit cooperatives are often member-owners of vertically integrated secondary cooperatives which provide them with central banking, trade association and business support services. In some developing countries these secondary institutions are regulated as formal financial sector entities.

Multipurpose cooperatives may also provide financial services to their members but do this in conjunction with other services such as input supply or marketing members’ crops. Governments have often been keen to promote cooperatives but to be successful they have to remain private business organizations owned and controlled by the people who use its products, supplies or services.