Cooperatives face funding, regulatory barriers despite development role

KAMPALA, October 15, 2026 — Cooperatives around the world are being held back by inadequate financing, outdated laws, weak infrastructure and limited access to markets despite their growing contribution to sustainable development, a new report has said.

The report by the International Cooperative Alliance [ICA] and the UN Committee for the Promotion and Advancement of Cooperatives [COPAC] says many cooperatives operate in environments that limit their ability to expand and contribute fully to the Sustainable Development Goals.

Among the major constraints identified are weak or outdated legal and regulatory frameworks, limited access to suitable finance, infrastructure and technology gaps, inadequate technical and managerial capacity, restricted market access and weak data systems.

The report says access to affordable finance is particularly difficult for small and emerging cooperatives, including those led by women, young people and informal workers.

In the food sector, for example, many cooperatives lack long-term financing needed to invest in cold storage, logistics, processing facilities and digital systems.

Outdated cooperative laws, registration procedures, tax regimes and land-use policies can also prevent cooperatives from operating efficiently across value chains and attracting investment, according to the report.

The report recommends modernising cooperative legislation, simplifying administrative procedures and creating financing instruments specifically designed for cooperative enterprises.

It calls for concessional loans, blended-finance facilities, revolving funds, loan-to-grant schemes and guarantees to help reduce the risks faced by lenders.

Governments are also urged to use public procurement to create markets for cooperatives, including through food, housing, infrastructure and public-service contracts.

The report says cooperatives should also be incorporated into national development and poverty-reduction strategies, while their contribution should be better captured in national statistics and SDG monitoring systems.

It argues that stronger partnerships among governments, development agencies, civil society, the private sector and cooperative organisations would allow successful cooperative models to be scaled up.

The report concludes that cooperatives are already part of the delivery system for sustainable development, but their impact will depend on whether governments and development partners create conditions that allow them to expand.

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