The cooperative bank model could still be used by small and medium-sized intermediaries, thereby preserving the cooperative spirit of those local communities to which it is well-suited. For these intermediaries too, the reform aims to strengthen several aspects of governance and to increase the incentives to invest in their capital.
The importance of building a credit registry system A modern market economy is based on credit, where the circulation of commodities and financing are dependent on credit. In the absence of a credit culture, debts can go unrepaid, lenders are troubled by arrears, and the market is swarmed with fake and shoddy goods.