Definition of 'Financial Cooperative'
A financial institution that is owned and operated by its members. The goal of a financial cooperative is to act on behalf of a unified group as a traditional banking service. These institutions attempt to differentiate themselves by offering above-average service along with competitive rates in the areas of insurance, lending and investment dealings.
Investopedia explains 'Financial Cooperative'
Credit unions are the most popular form of financial cooperative because they are owned and operated by their members. These financial institutions often pay higher-than-average interest rates and are only accessible to those that have accounts.
The size of financial cooperatives can vary from only a handful of branches to being widespread with thousands of locations. Many financial cooperatives offer products and services that are comparable to those offered by the major diversified banks.