The Co-operative Movement was introduced in Cyprus at the beginning of the twentieth century and is considered as one of the most powerful and well organized Co-operative movements on a worldwide basis. When Cyprus was declared an independent Republic, the Cooperative Movement was already well developed. A local Co-operative Credit Society and Co-operative Grocery was founded and operated in every village and suburb. In addition, some basic agricultural products were sold and exported on a co-operative basis, which was supported by the creation of trading and processing organizations for the agricultural production.
The Co-operative Societies Supervision and Development Authority is exercising the supervision/examination and inspection of Co-operative Societies and is responsible for the promotion and development of the Co-operative Movement in Cyprus based on the provisions of the Co-operative Societies Law and the Internationally accepted Co-operative Principles. The Authoritys primary responsibility is the smooth and effective operation of the Co-operative Societies as well as the development, improvement, expansion and upgrading of their services offered in all sectors of their activity: Credit and Savings, Consumer Sector, Trading of Agricultural Products Sector, Manufacturing Sector, Insurance Sector and other Services .
The Turkish invasion of 1974 had devastating consequences on the Co-operative movement. As a result of the invasion 225 co-operative institutions were displaced or inactivated and lost all their property. Out of these only 19 were reactivated in the areas under government control.
The Co-operative Movement in Cyprus has shown an upward growth and reached a satisfactory level. Its contribution to the economic and social improvement of its members and the Society in general is crucial and of vital importance. The most developed sector of the Co-operative Movement is the Credit and Savings sector. The total deposits and loans as at 31.12.2003 were about CYP 4, 0 billion and CYP 3,0 billion respectively.
An important development for the Co-operative Credit sector was the entry of Cyprus in the European Union and the required harmonization with the European Acquis. This was done through a detailed action plan, which involved, inter alia, the adoption of the European Acquis by Co-operative Societies through reorganization and restructuring, including merging based on their operational activities or geographical area of operations, and the upgrading of the Co-operative Societies activities and operations, especially for the small sized ones, to obtain the necessary “critical mass” and as a result to improve their profitability.
It is worth noting that at the beginning of 2001 the Co-operative Movement had stated its final position of the harmonization with the European Acquis, which was to fully accept the relative European Acquis for the credit institutions in a transition period of five years which ends in 31.12.2007, for full compliance with the provisions of the EC directive 2000/12/EC.This position was adopted by the Cyprus Government and accepted by the EU. Since 1.1.2001, the Liberalization of Interest and Related Matters Law came into force, which introduced to the Credit and Finance sector a variable interest rate environment and abolished the maximum interest rate ceiling of 9%. The Authority assisted Co-operative Societies for their smooth transition in the new environment and took the necessary actions in order to provide compliance with the new legislation and Government policy.
Source: Press And Information Office, Republic Of Cyprus, 2005