1.309

604.389

El Salvador

Key figures

Number of cooperatives per sector
Employees and members per sector

Research overview

Responding to challenges and existing knowledge gaps facing the cooperative movement, this mapping research seeks to provide exhaustive information on cooperatives around the world.

This is achieved through a process jointly conducted by the ICA and its four regional offices – Cooperatives of the Americas, Cooperatives Europe, ICA Africa, and ICA Asia-Pacific – using a common methodology, designed with the support of external experts from the European Research Institute on Cooperative and Social Enterprises (Euricse).

Each office collected the input of ICA members present in the countries within its geographic area, by using a common questionnaire, and completing it with relevant national statistics, in order to obtain a picture of the national situation. As a result, the data above is collected following two strategies: 1) a survey targeting ICA cooperative members 2) collecting national statistics already available in the country. The numbers above provide aggregated data from ICA members on the number of cooperatives, as well as the number of cooperative employees and memberships in the country. More methodological information is available in the full report. In El Salvador, the data is collected for the reference year 2018.

Mapping out cooperatives in each country provides a more precise picture of the cooperative context at national and regional levels, enhances the movement's visibility, networking, partnerships opportunities, as well as advocacy, and empowers cooperators by providing tools for positive change.

This webpage presents a snapshot of the research results for El Salvador. For more information and the full research results, you can download the report by clicking on the links above.

 

History

According to the official site of Insafocoop, in El Salvador cooperativism was heard, for the first time, in a theoretical way, in a teaching chair in the Faculty of Jurisprudence and Social Sciences of the National University. It was in 1914, that the first cooperative was organized, by a group of shoemakers, in San Salvador on the Palo Verde slope and in 1938, La Cooperativa Algodonera was founded. Later, cooperativism reached the union of public employees, as a means of defense against “agiotism”.

The cooperatives had the support of the government in turn, which provided initial capital, but the employees identified the capital ceded by the government, as their property and did not believe that they were obliged, for that reason, to repay the amounts granted to them on loan.

 

Overview

El Salvador counts ICA member organisation:


- Federación de Asociaciones Cooperativas de Ahorro y Crédito de El Salvador (FEDECACES), is a full member in the finance sector.


In El Salvador the research questionnaire was distributed to and completed by 1 ICA member organisation. The data collected was for the reference year 2018.

 

Legal framework

 

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for El Salvador.

 

 

In El Salvador, the Constitution of the Republic decreed in 1986, determines in Article 114 that: "The State will protect and promote Cooperative Associations, enabling its organization, expansion and financing".  Hence its foundation for the secondary legislation currently regulating Cooperative Associations called "General Law on Cooperative Associations", promulgated by Legislative Decree number 339, dated May 6th, 1986, published in the Official Journal number 86, volume 291 dated May 14th of that same year, which came to replace the Law on Cooperatives of 1969.

 

Cooperative Friendliness

The tax aspects for cooperatives in El Salvador do not differ in terms of the nature of the other subjects required to pay tax, and cooperatives are exempt only from Income and Municipal taxes. As for considering whether the law is favorable or unfavorable to the development of cooperatives, this can be said to be favorable because it is a simple, non-restrictive law, which can have a favorable response to unresolved concerns.

 

Key recommendations for improvement

  • That the cooperative act be recognized procedurally, in order to have special jurisdiction.
  • To compile all decrees and laws concerning the regulation of the activity of cooperatives, which are currently scattered.
  • That the legal nature of cooperatives be respected in laws, norms and any other document, so that they are not considered and treated as financial entities for profit.

 

Conclusions

Cooperative Associations in El Salvador are on the path to their economic and social boom. An arduous task that nevertheless is on its way.
The General Law on Cooperative Associations, despite being in effect for the past thirty-three years, meets the needs for the development of cooperatives, meaning that to date there has been no overriding need for their reform or for the approval of a new law. However, at some point it will be necessary to adapt the law to current times, in order to apply new technologies in their processes whether administrative or judicial in nature.

 

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