The cooperative movement in South Africa: Can financial cooperatives become sustainable enterprises?

The co‐operative movement in South Africa came a long way, but the results of such a long revolution are yet to be seen despite an enabling legislative environment and government incentives which increased their formation from 4,000 in 2004 to 132,000 in 2016. The sustainability of these cooperatives outside government grants is very doubtful, with most of them just appearing on paper without any meaningful economic activity happening on the ground. For cooperatives to be sustainable, they need to work toward full implementation of the cooperative movement principles and values through the bottom‐up approach to cooperative formation by reducing their overdependence on the state. Financial cooperatives in South Africa can become sustainable in their role of addressing the financial market failure at the grassroots as the majority of the population, including the working class, are using informal financial schemes based on social ties as sources of their financial services. Financial cooperatives have a long history as a grassroots movement that has played an important role in addressing socio-economic challenges facing the marginalized communities around the world in a more sustainable way.