Savings Protection in Cooperatives Postponed Until 2025: SBS Will Safeguard Deposits Starting From That Year

The Superintendency of Banking, Insurance, and Pension Fund Administrators (SBS) has announced that savings in cooperatives will only have protection starting in January 2025, delaying the coverage that was initially planned for the end of this year. This measure, aimed at safeguarding members' deposits, will only be available to those cooperatives that have paid 24 premiums into the mentioned fund, removing the requirement to be up to date with the submission of their financial statements. The postponement of this protection is largely due to the economic crisis generated by the Covid-19 pandemic. Many cooperatives were affected and operating at a loss, leading to the postponement of contributions to the fund designed to protect members' savings. While contributions resumed in 2023, the recovery has been slow due to economic deceleration and recession. This measure will provide reputational support to cooperatives, which have faced constant interventions and branch closures in the last four years. However, not all institutions will be protected from the beginning of 2025, as only those of larger size and some medium-sized ones that are up to date with their payments will be able to access the coverage. The economic scenario has also impacted the level of savings in the cooperative system, which has experienced a significant decrease. Many members have resorted to their deposits to cover expenses, leading to a reduction in the total assets of the sector. According to experts, the implementation of this insurance is an important step towards the consolidation of cooperatives, although the dissolution processes by the SBS are expected to continue. The mandatory registration of all cooperatives in the country has drastically reduced the number of entities, and it is estimated that this downward trend will continue in the coming years. The coverage established by the SBS varies according to the level of the cooperative and the total assets it holds, ensuring a maximum coverage amount per member. This measure aims to protect members' savings and ensure the stability of the cooperative financial system. In summary, the protection of savings in cooperatives will be delayed until 2025, but once in effect, it will provide necessary support for members and contribute to strengthening the cooperative system in the country.