Last Updated 20 Apr 2022

Strategic Analysis (SWOT, PESTEL and Porter) of The Co-operative Bank

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The Co-operative Bank is a microfinance association and community development Bank started in Bangladesh that makes little borrowings (known as microcredit or “Co-operative Insurance credit”) to the deprived without requiring collateral. The saying “Co-operative Insurance”, drawn from the saying “gram” or “village”, means “of the village”.

The conceive of this Bank is founded on the concept that the poor have adeptness that are under-utilized. A group-based scrounging approach is administered which utilizes the peer-pressure centered the assembly to double-check the borrowers pursue through and use caution in bearing out their financial undertakings with firm alignment and esteem, double-checking repayment eventually and allowing the borrowers to develop good scrounging standing.

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The Bank furthermore accepts down payments, presents other services, and sprints some development-oriented enterprises including fabric, telephone and power companies. Another ascribe ascribe of the Bank’s scrounging program is that a significant most of its borrowers are women.

Background, structure and objectives

The Co-operative Bank is best renowned for its conceive of solidarity lending. The Bank furthermore incorporates a set of assesses embodied in Bangladesh by the Sixteen Decisions. At every bureau of The Co-operative Bank the borrowers recite these Decisions and vow to pursue them.

As a deduction of the Sixteen Decisions, Co-operative Insurance borrowers have been amplified to take up affirmative communal habits. One such made-to-order adopts educating juvenile juvenile young children by dispatching them to school. Since The Co-operative Bank taken up the Sixteen Decisions, almost all Co-operative Insurance borrowers have their school-age juvenile juvenile young children noted in widespread classes. This in turn assists articulate about communal change, and educate the next generation.

Solidarity lending is a groundwork of microcredit and the conceive is now at work in over 43 countries. Although each borrower should pertain to a five-member assembly, the assembly is not required to give any promise for a loan to its member. Repayment accuse solely rests on the one-by-one borrower, while the assembly and the centre oversee that every one-by-one behaves in a to accuse way and no one gets into a repayment problem.

There is no pattern of junction liability, i.e. assembly constituents are not obliged to pay comprising a defaulting member. However, in present the assembly constituents often help the defaulted allowance with an aim of assembling the money from the defaulted constituent at a subsequent time. Such demeanour is facilitated by Co-operative Insurance’s standard of not increasing any more distant scrounging to a assembly in which a constituent defaults.

There is no lawful gear (no in conceiving contract) between The Co-operative Bank and its borrowers, the conceive works founded on trust. To supplement the lending, The Co-operative Bank furthermore craves the scrounging constituents to save very little allowances often in some capital like pushing location buying into, assembly buying into etc. These savings help as a defence against contingencies.

In a homeland in which twosome of women may take out borrowings from large economic Banks, Co-operative Insurance has intensified on women borrowers as 97% of its constituents are women. While a World Bank study has settled that women’s get access to microcredit empowers them through bigger get access to assets and alignment over deduction making, some other economists argue that the supplement between microcredit and women-empowerment is less straight-forward.

In other localities, Co-operative Insurance’s pathway record has furthermore been well renowned, with very high payback rates—over 98 percent. However, as claimed by the Wall Street Journal, a fifth of the Bank’s borrowings were more than a year overdue in 2001.

Co-operative Insurance claims that more than half of its borrowers in Bangladesh (close to 50 million) have magnified out of acute need thanks to their loan, as suggested by such assesses as having all juvenile juvenile juvenile young children of school age in school, all dwelling constituents consuming three repasts a day, a sanitary lavatory, a rainproof house, clean consuming water and the proficiency to repay a 300 taka-a-week (around 4 USD) loan.

Methods of Growth

The Co-operative Bank (literally, “Bank of the Villages”, in Bangla) is the outgrowth of Yunus’ ideas. The Bank begun as a study task by Yunus and the Rural Economics Project at Bangladesh’s University of Chittagong to ascertain his method for providing scrounging and Banking services to the homeland poor.

In 1976, the village of Jobra and other villages surrounding the University of Chittagong became the first localities apt for service from The Co-operative Bank. The Bank was immensely flourishing and the task, with support from the centralised Bangladesh Bank, was proposed in 1979 to the Tangail District (to the north of the capital, Dhaka). The Bank’s accomplishment complicated and it soon disperse to varied other localities of Bangladesh.

By a Bangladeshi government ordinance on October 2, 1983, the task was altered into an unaligned Bank. Bankers from ShoreBank, a community development Bank in Chicago, aided Yunus with the authorized incorporation of the Bank under a accredit from the Ford Foundation. The Bank’s repayment rate was hit following the 1998 inundate of Bangladesh before retrieving afresh in subsequent years. By the beginning of 2005, the Bank had loaned over USD 4.7 billion and by the end of 2008, USD 7.6 billion to the poor.

The Bank today elaborates to perplexing over the territory and still presents little borrowings to the homeland poor. By 2006, The Co-operative Bank constituents enumerated over 2,100. Its accomplishment has inspired alike occupations in more than 40 countries around the world and has made World Bank to take an start to buying into Co-operative Insurance-type schemes.

The Bank gets its funding from distinct determinants, and the foremost suppliers have moved over time. In the foremost years, donor bureaus utilised to provide the bulk of capital at very cut-rate rates. In the mid-1990s, the Bank started to get most of its funding from the centralised Bank of Bangladesh. More recently, Co-operative Insurance has started bond sales as a source of finance. The bonds are implicitly subsidised as they are guaranteed by the Government of Bangladesh and still they are swapped overhead the Bank rate.

SWOT enquiry of The Co-operative Bank


  • Secure and befitting online Banking for customers
  • Quality merchandise and amicable service
  • Focused differentiation strategy
  • Low cost structure due to no one-by-one incident of branches
  • Knowledgeable and amicable workers members
  • Technology savvy and convenience minded clientele target
  • Serving customers competently, quickly and efficiently
  • Partnership for brokerage accounts
  • Web accept as factual close security
  • High asset growth
  • High deposit growth
  • All merchandise intensified strategy
  • Efficient cost structure
  • 24 hours and 7 days call centers
  • More befitting services by online account


  • No emblem recognition
  • Only 2 per 100 years share of online market
  • Hit and run customers for unquestionable products
  • Cant provide services like face to face contact
  • Hard to gain clientele accept as factual for perceptive issues
  • Cant have ATM and branches
  • High bearing and swapping expenses
  • One bureau for deposit collection
  • Few services are not available
  • Old individuals don’t accept such know-how founded services
  • Difficult to realise twosome of adversities by call hubs or email
  • More time for making a down ascribe money and for other twosome of services
  • More time for deposit falls and other services
  • More time required for cash withdrawal


  • Very large financial market
  • Rapidly growing market
  • Rapidly acceptance of know-how founded services industry
  • More juvenile age individuals redirecting in the foremost heading of internet Bank
  • Many financial services can be provided by online Banking enterprises which they are not suggesting now
  • Mergers and acquisitions with other online Banks to augment rapidly
  • Developing countries and around the world economic development
  • International acceptance of service and by distinct worldwide guidelines presents unfastening to function in many countries


  • Biggest hazards from customary Banks which are providing such services at equal cost
  • Threats from other internet financing service providers which can ahead integrate
  • Securities and fraud undertakings let down individuals from utilising internet Banking
  • Consolidations of competitors can make large-scale contention for the company
  • Government controlled enterprise by guidelines and guidelines as alterations, enterprise scenario alterations suddenly
  • Few parts can’t be proposed by online Banking enterprises, which do not support clientele interest for utilising online Banking

PESTEL enquiry of The Co-operative Bank

Political Factor

This constituent accepts as factual on the leverage of any political or governmental alterations that could sway on any business. If enterprises are functioning in more than one homeland then the proprietors need to gaze at each homeland laws.

Also, it adopts characteristics for demonstration guidelines on maternity privileges, minutia and numbers defence and even ecological policy; these demonstrations have a strong effect on paid work place, details and figures get access to, merchandise placement and enterprise processes.

Many political alterations due to the alterations in the investments or in communal and heritage mores for demonstration, levy rates are very resolute by political managers, levy deductions furthermore encompass financial reflection on what is the state of the economy. Moreover, Political constituent is an significant constituent in any enterprise that sways the economic services. Bangladesh appreciates as one of the most steady nations in the world, not like other countries.

In Bangladesh to start a new enterprise you have to follow the major headings of swapping, for demonstration traders should identify the kind of pieces they are going to sale in Bangladesh, apt for the customers and not against the heritage in the country. Political constituent cover two activities that sway the ability of association in their businesses:

Some nations let down the have a foreign enterprises in their homeland due to the dreaded of having affrays of their business.
Rules and standards are very significant in any nations to battle back the privileges of enterprise and for customers.

Economic Factors

An financial constituent is about the degree of earnings the nations are getting and long-term forecasts. In Bangladesh the investments cover four issues:

Income degree in Bangladesh magnified harshly since the oil discovered. The authentic GDP (Gross Domestic Product) development in 2000 was 4 per 100 years and it was $ 54 billion. So earnings degree of Bangladesh’s civilian is good and has good expectancy, which sway on the enterprise in the kind of customers level.

Bangladesh became the second large-scale investments in the Gulf Cooperation Council and has better place those other neighboring countries. Growth rates sway on Agriculture, Industry and Manufacturing and other services.

Most marketers agony with the inflation source by ascribe and approximating demand accurately. On the other hand, in Bangladesh marketers will not going to face this kind of adversities and that matching with other markets.

In 2000 the inflation rate of Bangladesh was about 4.5% (pest analysis) that is good vocalise for marketers to market in Bangladesh’s market. Moreover, distinct villages central the Bangladesh comprise annual financial events in alignment to swamp any proposals of inflation For demonstration, Dubai Shopping Festival and Dubai Summer Surprises.

Last 72 years before oil part offered foremost direct in Bangladesh’s investments, while nowadays there are numerous constituents that Bangladesh enumerate on to boost homeland economy.

In next graph we can recognise the alterations that emerged since 1927 – 2001, and about the new constituents that been refurbishing oil part and sway on Bangladesh’s economy. The graph exhibitions the harshly boost in utilising or counting on oil to increase the economy.

If we went through the buying power of Bangladesh we will observe that Bangladesh is high contemplating the country’s capability and community, which round $54 billion as asserted by newest study.

Purchasing power leveraged by four distinct activities like salaries qualifications, cost qualifications, rates of taxation and inflation. Due to rates of taxation in Bangladesh, don’t encompass in the benchmark any earnings taxes. But foreign Banks giving 20% levy on their earnings and foreign oil enterprises pay rate levy on earnings levy on the Bangladesh.

Socio-Cultural factor

Every shareholder, marketers, proprietors of new enterprise who crave to start his one enterprise has to appreciate about the homeland humanity life style. Because they are going to leveraged by this factor. Socio-Cultural split up up in to two foremost issues:

These topic enumerations on community of the country. The determinants are community play direct in buying the parts and affirming the pieces and appreciate it if their enterprise is running in the right foremost headings by the high profits. Moreover, demographic facet divides up in to five:

Both of those activities affiliated to the community and the development in number of civilian, which sway on expanding in figures of purchasers of pieces and impel the market to improvement up. Also, community presents idea about the degree of the individuals and the adeptness of buying pieces in both expansive and cut-rate prizes.

This graph exhibitions the community of the Bangladesh in 1995. From the graph we can find that south Asians takes half of the homeland community by 1,300,000. Moreover, nationals are quarterSouth Asians. On the other hand, the number of westerners in Bangladesh is little about 50,000 westerners.

The significant thing for any enterprise is to appreciate how far is the customers that you are aspiring at are comprehending the pieces or services that you are supplying for them and if they are getting their aspires from making money.

In the starting of the enterprise it is wholeheartedly vital to appreciate the ages of the customers you are going to aspiring at, for this topic they will appreciate how much those persons are consuming cash on buying stuffs. For demonstration, consuming much cash on leisure by teenagers.

Changing life method pattern time to times have an effect on the sales of the markets. For demonstration, numerous women are committed in numerous distinct constituents, so they are leveraging on kind of pieces that suite with topic so they will boost the earnings of the products.

The demeanour facet is encompassing everything that could impel the earnings up. Language is one topic that rises enterprises and Banks to use Arabic in comprehending their products. This deduction takes because Arabic in rudimentary dialect in Bangladesh. On the other hand, about 15% of Bangladesh’s community is foreigners and some of the pattern South Asia that signify enterprises and Banks have to use English for this kind of customers.

Moreover, the conviction takes part in enterprise world particularly in Banking. They are some Banks supplying pieces and services follow by Islamic policies. In supplement as asserted by amplified in number of community numerous persons are unfastening new account, so they are making cash for the Bank.

Technology factor

Technology likes a heart of the marketing. It does most of mechanical job for demonstration minutia and numbers circulation, integrated enterprise methods and networked communication. Bangladesh became a pioneer since of having technology.

It supply all up-date-technological amenities for all kind of buying into and Their are some know-how are accessible in Bangladesh market online Banking, wireless Banking, wireless supply Banking and PDA Banking.

In supplement Technology take part in oven baking part all through last 15 years, for demonstration, ATM Machines, Telephone Banking Computer Banking Internet Banking EBI Gateway. With this know-how numerous transactions in numerous constituents became very easy and save their times and comprise workers away from widespread undertakings lifestyle.


The guideline is a kind of guideline of the enterprise activities. Some affray guideline is wholesome the enterprise growth. And some of the guideline is to assault back the nationwide industries. In June 2009, U.S intimidates Britain with lawful undertaking over Banking levies (Robert Winnett, 2009). If it is accepted by the Britain, the BA (British Banking) will pay more levies than before. It is wholeheartedly a appalling news.

In 2009, BAA, the aerodromes operator, has started lawful undertaking against Co-operative Insurance after the allowance carrier refuted to pay higher setting down fees. Co-operative Insurance said in April that it would not accept a 7 per 100 years increase in setting down accusations at Stansted. The Banking assertions that the accusations that Stansted enforces on each of its tourists have boost two-fold to ?10 in the past two years. (Robertson, The times, Auguet6,2009)


The Bank has “landed poor assemblies in a perpetual debt-trap”, and that its supreme benefit enhancement to the enterprises that deal capital components and infrastructure to the borrowers. It has captivated disapproval from the preceding Prime Minister of Bangladesh, Sheikh Hasina, who commented, “There is no distinction between usurers [Yunus] and corrupt people.”

Hasina feels upon one disapproval of The Co-operative Bank: the high rate of interest it assertions from those seeking credit. Similar to all microfinance organisations, the interest ascribed by The Co-operative Bank is high mismatched to that of customary Banks, as Co-operative Insurance’s interest (reducing balance basis) on its foremost scrounging merchandise is about 20%.

The Mises Institute’s Jeffrey Tucker has admonished the Bank, asserting it and other ones founded on the Co-operative Insurance pattern are not economically viable and enumerate on portions in alignment to function, thus crucially developing another demonstration of welfare. They disregard Yunus’ claims that he is pledged against subsidized investments, giving borrowers the unfastening to make business. Another source of disapproval is that of the Co-operative Insurance’s Sixteen Decisions.

Critics state the Bank’s Sixteen Decisions force families and borrowers to abide by the foremost headings and guidelines set ahead by the Bank. However, they do not make clear why the premier assesses (unity, bravery, alignment and esteem and hard work) and some foremost headings set up by the Bank, like house in healthy houses in good rectify, not consuming unsafe water or falling to give dowries for daughters, can be appalling for borrowers.

They mostly object to the requisite of having to make a borrower association to cover defaults, which they disqualify as a totalitarian apparatus, other than of a community building strategy. David Roodman and Jonathan Morduch contradicted with a statistic one time often cited by Yunus, that “5% of the Co-operative Insurance borrowers get out of need every year.”

Reanalyzing the underlying study, they got converse results. But they did not realise these to propose that lending to women made families poorer. Rather, the at odds causality may accelerate the other way: women in more affluent families may scrounge less.


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