Introduction - Genossenschaftsverband Bayern

lion Thaler, cooperative shares from 246,000 to 5.7 million Thaler, the
reserve funds from 30,000 to 556,300 Thaler, saving deposits from
512,300 to 8.72 million Thaler. In the same period, the equity ratio
increased from 19.5 per cent to 31.8 per cent.
Also in Bavaria, the number of Raiffeisenbanks grew from 438 in
1891 to 790 in 1895. In the year 1900, loan associations modelled
after Raiffeisen’s concept numbered 1,900 with roughly 160,000
members.
During their development, the Bavarian cooperative banks supplied
financial services across the board to the commercial and agrarian
middle class. Cooperative banks on their part, in their function as
disseminators, have since the second half of the 19 th century offered
financial services to various kinds of commercial and agricultural
cooperatives, e.g. trades, condominium and housing cooperatives as
well as dairy cooperatives. At the beginning of the 1930s, roughly
7,200 cooperatives existed in Bavaria, among them about 4,400 cooperative
banks of different size providing funds for many commercial
and agricultural cooperatives.
3 Summary
The foundation of cooperative banks occurred as a consequence of a
market failure in the banking market of the 19 th century. Big banks
did not consider it their purpose to supply financial services to the
middle class. There was no adequate supply of banks for the credit
demand of the middle class. Self-employed businessmen as tradespeople,
farmers or professionals founded cooperative banks that, in
turn, filled the financial needs of the middle class. By establishing
cooperative banks, the middle class was able to shoulder investments
securing its future.
14 I Foundation motivation