Determinants of open membership in Brazilian credit unions

Purpose: To identify the determining factors of Open Membership in Brazilian credit unions between 2016 and 2020. Methodology: A logistic regression model was used to estimate these factors. The analysis considered both specific internal variables of the cooperatives (age, asset size, number of members, and affiliation to systems) and variables representing the macroeconomic environment in which these institutions operate (municipal development index, population size in municipalities with service points (PACs) and cooperative headquarters). Results: The main results indicate that a lower population size in the municipalities containing the cooperative headquarters and PACs increases the probability of Open Membership. Additionally, cooperatives with a larger number of members and assets also have a higher likelihood of adopting Open Membership. Contributions of the Study: The study highlights the predominance of cooperatives with Open Membership in smaller and less developed municipalities, reinforcing the role of these cooperatives in social inclusion, reduction of inequalities, and provision of financial services and credit to the population in these locations. Moreover, the results provide valuable insights for policymakers, financial institutions, and cooperatives interested in promoting socio-economic development and equity in underserved communities by the financial system.