History

HISTORY OF CO-OPERATIVE MOVEMENT IN CYPRUS

Co-operatives have a long history in Cyprus. The first co-operatives were established in 1909 before the relevant law was passed. The Co-operatives Law was enacted 5 years later in 1914. Until 1925, only 29 co-operatives had been established and become operational. During this period, co-operative development was very limited.

Ziraat (Agricultural) Bank of Cyprus

The Ziraat (Agricultural) Bank of Cyprus was established in 1925 to meet long-term agricultural credit needs. Co-operative credit companies were authorized to act as regional agents of this bank in the disbursement and collection of loans provided by the government. This arrangement was an important incentive for the co-operative movement and 175 co-operatives were established within 4 years. However, the fact that the co-operatives operated only as agents of the Ziraat Bank of Cyprus did not prove to be very successful and did not serve the true co-operative concept. Consequently, the government decided to break the link between the co-operatives and the Ziraat (Agricultural)  Bank and instead established a separate Department of Co-operatives.

Department of Co-operatives

The Department of Co-operatives was established in 1935 to reorganize co-operatives. Programs to make co-operatives independent, democratic and financially self-sufficient were implemented and were successful. Some co-operatives were not only financially self-sufficient but also had surplus resources, leading to the establishment of the Co-operative Central Bank.

Co-operative Central Bank

The Co-operative Central Bank was established in 1938. The main purpose of the bank was to accept surplus funds from co-operatives as deposits and lend them to co-operatives in need. In other words, the Central Co-operative Bank was intended to provide to member co-operatives the services that primary co-operatives provided to their members.

Cyprus Turkish Cooperative Central Bank - Koopbank

In 1959, after the independence of Cyprus, the Department of Co-operatives and the Co-operative Central Bank, which had served both Greek and Turkish Cypriot co-operatives until that year, were split into two, in accordance with the Constitution and the Treaty of Establishment. The Cyprus Turkish Cooperative Central Bank was established on 9 September 1959 with the partnership of 196 Turkish Cypriot cooperatives.

One of the definitions of co-operatives is “Co-operatives are the children of needs”. Koopbank is one of the best examples of this definition. Since it was the only organized institution of the country during the days of struggle of the Turkish Cypriots between 1963-1974, it expanded its fields of activity beyond the banking sector in order to meet the needs of the society and started to operate in the industry, trade and services sectors under a single legal entity.

Koopbank Today

Today, the Cyprus Turkish Cooperative Central Bank (KOOPBANK) is among the largest institutions of Northern Cyprus with the size of its shareholders' equity, deposit and placement volume, number of personnel, added value created and the direct and indirect taxes it provides to the state.

It has been one of the top financial institutions in Northern Cyprus for many years in terms of asset size and the bank has nearly one-fifth of both the balance sheet size and deposit volume of the whole banking sector.

Today, every co-operative operating in Northern Cyprus is a member of the Bank; in this way, the Bank also operates as an upper unit of the active co-operatives in the country.

As a co-operative organization, the Bank is subject to the Banking Law in addition to being subject to co-operative law. Under the old Banking Law, the Bank was able to continue its activities in the industrial, commercial and services sectors outside the banking sector, but under the new Banking Law passed in 2001, the Bank withdrew from sectors outside the financial sector and transformed the units operating in these areas into co-operative companies and made them operate as 100% subsidiaries of the Bank.

The main purpose of Koopbank's establishment was to utilize the surplus funds of member cooperatives and to provide loans to cooperatives in need of funds. In addition to this, the Bank today provides all kinds of banking services to individuals, member cooperatives and commercial enterprises in the fields of retail, corporate and commercial banking within the framework of its wide branch network, superior technological infrastructure and range of services.