Beyond the Financial Horizon: A Critical Review of Social Responsibility in Latin American Credit Unions

Abstract

Credit unions in Latin America play an important role in the financial system, making a significant contribution to the achievement of the Sustainable Development Goals (SDGs) through their focus on financial inclusion, sustainability, and economic resilience. Assessing the social responsibility of these cooperatives ensures ethical, sustainable operations that benefit the population. Unlike traditional financial institutions, cooperatives are based on principles focused on mutual benefit, democratic participation, and responsibility toward their members and the community. This critical literature review, conducted through scientific databases, synthesizes findings on social responsibility in credit unions. The financial system is relevant for global economic stability and growth, comprising institutions like credit unions that facilitate capital flow. It operates through financial instruments, intermediaries, and markets, ensuring efficient resource allocation and risk management. Effective financial management involves planning, organizing, directing, and controlling resources to achieve stability and growth, integrating social responsibility. Credit unions in Latin America highlight cooperative principles, emphasizing member service, community development, and sustainable practices over profit maximization, thereby fostering economic inclusion and ethical business practices. In conclusion, credit unions provide affordable financial services while promoting values of solidarity and equity. However, as entities directly linked to communities, it is essential for them to monitor their actions in terms of social responsibility. This is important to measure and ensure their impact on society and its context. Finally, future research should focus on balancing economic viability with social responsibility, exploring innovative models, governance frameworks, and technological impacts.

1. Introduction

Financial entities play an important role in the global economy [1]. This importance is reflected in their ability to influence the economic cycle [2,3] and the stability of a country [4], facilitating the flow of capital and contributing to economic growth [5,6]. The financial system is comprised of banks, cooperatives, investment institutions, and insurance companies [7,8], which enable the channeling of savings [9] and intermediation between several financial agents [10]. Furthermore, they promote investment and consumption [11,12] through the financial products and services they offer [13,14]. These include: (i) managing savings and checking accounts [15], (ii) granting loans or credits [16], (iii) issuing credit and debit cards [17], (iv) investment management [18], and (v) risk coverage through insurance [19]. Access to these types of products and services is a cornerstone of financial inclusion [20] and the expansion of opportunities for underserved populations [21]. Additionally, by enabling users to manage various financial transactions and securely handle their money [22], it promotes economic empowerment [23].

Although credit unions and small and medium-sized enterprises (SMEs) operate in different sectors, they share similar characteristics and challenges within the Latin American context. Both entities have assumed the responsibility of contributing to the economic and social development of the local communities in which they operate [24], limited access to resources, and their capacity for adaptation and resilience. Therefore, understanding the relationship between the provision of financial products and services and social responsibility [25], is essential, as financial institutions must be not only profitable but also ethical and socially responsible [26]. So, their offerings should align with corporate social responsibility principles to promote equitable and sustainable economic development [27]. Additionally, they must ensure that these products and services are transparent and accessible to clients [28], fostering financial inclusion [29]. Moreover, they should make decisions that contribute to improving the economic situation of their members [30], as in a globalized market, financial decisions impact partners, employees, customers, and the community [31,32].

Financial entities must effectively manage their resources, optimize their investments, and ensure liquidity to face economic challenges [33,34]. Consequently, financial management serves as a critical tool for these entities to achieve stability, transparency, and the ability to fulfill their economic roles [8,35]. In this context, timely management requires the implementation of robust policies and procedures across key areas such as risk management, liquidity, capital, regulatory compliance, and the integration of innovative technologies [36,37]. Risk management allows these institutions to identify, assess, and mitigate credit, market, operational, and liquidity risks [38]. Additionally, maintaining control over capital and liquidity levels is necessary to support the entity’s operations and ensure its solvency [39]. Another important aspect is regulatory compliance, as these institutions are subject to regulations aimed at protecting users, preventing illicit activities, and ensuring financial stability [40,41,42]. Additionally, in an increasingly digitalized financial environment, effective management also involves adopting innovative technologies [43] to improve operational efficiency [44], user experience [45], and transaction security [22]. This may involve implementing online banking platforms, electronic payment systems, cybersecurity measures, and fintech solutions [46,47].

The challenges of managing financial entities are diverse and ever-changing [48]. The ability to proactively manage these risks and develop effective mitigation strategies is essential for the long-term success of these organizations [49]. Considering the above, it is worth mentioning that financial management integrates strategic planning [50], informed decision-making, and risk management [51,52]. This ensures the generation of benefits, operational efficiency, and sustainable growth of financial entities [53]. In this regard, the link between social responsibility and financial management contributes to analyzing the business practices that should be adopted to generate greater economic, social, and environmental benefits [27,54]. This relationship leads to a positive impact on society and the environment in which they operate [8,55]. Therefore, financial management and corporate social responsibility are two interrelated concepts [56]. Their integration contributes to the sustainable development of organizations [57], strengthens their competitive position [58], enables equitable economic growth [59], and ensures long-term sustainability [60]. Additionally, it significantly contributes to societal well-being [61]. Consequently, social responsibility allows these entities to operate ethically through controlled management.

Financial cooperatives stand out among entities that have integrated social responsibility into their growth process [62]. They are organizations based on autonomy and independence, democratic participation, and community interest [63,64,65]. They have proven to be an effective model for building equitable and resilient economies [8]. They are governed by cooperative principles and values established by the International Cooperative Alliance, which promote equity, transparency, and social benefit [66,67]. Additionally, social responsibility fosters a commitment to financial inclusion within cooperatives [68]. Through their participatory and democratic model, these entities facilitate equal access to basic financial services such as savings accounts, loans, and insurance [69]. This promotes sustainable development and economic stability in communities by encouraging entrepreneurship and local investment [70]. Similarly, responsible personal finance is promoted through financial education, with the aim of empowering beneficiaries to make informed decisions to improve their quality of life [71].

Although financial cooperatives operate under similar principles worldwide [72], there are differences in their functioning, regulation, and benefits depending on the region [8]. In developed regions, the focus of cooperatives is geared towards providing advanced financial services rather than direct social development [73]. For example, in Europe and North America, financial inclusion is not usually the primary focus, as most people already have access to basic banking services [74,75]. Furthermore, even though many cooperatives participate in community initiatives, their main objective remains to offer competitive financial services [76].

In Latin America, a region with high levels of inequality [77] and segments of the population without access to traditional banking services [78], cooperatives play a crucial role in promoting social development and financial inclusion [79]. This is particularly important in countries with significant economic and social inequality [80]. Through their focus on financial inclusion, cooperatives offer services to communities that are excluded from the banking system [81], such as rural areas and low-income populations [82]. In addition to providing financial services, they also implement educational, health, and community development programs [71]. Furthermore, cooperatives are closely linked to the microfinance sector [83]. While microfinance is practiced in other regions as well, it has a more prominent presence and a more established history in Latin America, especially in countries like Brazil, Colombia, and Mexico [84,85]. Therefore, credit unions in Latin America are key agents for the implementation of the SDGs [86,87]. Through their focus on financial inclusion, sustainability, and local development, they contribute to building more just and equitable societies [66,88]. However, to maximize their impact, the implementation of public policies that support their development is necessary [89] and their role in achieving the SDGs is recognized [90]. The collaboration between cooperatives and global sustainable development initiatives is essential to addressing the economic and social challenges in the region [33,91,92]. In this context, studying credit unions within Latin American financial systems is relevant because it helps to understand their role in financial inclusion, local economic development, and financial stability.

The scope of this article focused on the critical analysis of information regarding corporate social responsibility and its application in financial cooperatives. The objectives of this study were: (i) to describe the financial system and entities, and (ii) to synthesize the findings on financial management based on cooperative values and principles and their application in Latin America.

2. Materials and Methods

A literature review was conducted to gather information. Based on the PRISMA methodology, the review offers a critical perspective on an area of study, influencing the future direction of research [93]. Studies focused on the management of social responsibility in financial cooperatives were analyzed. The information search was carried out using predefined keywords such as the following: (i) financial system, (ii) credit unions, (iii) financial management, (iv) social responsibility, (v) sustainable finances, and (vi) cooperative principles and values. This primary information search was conducted on Google Scholar. In the case of scientific articles, searches were conducted in the central databases of Web of Science, Science Direct, and Scopus. Additionally, for government reports, technical reports, and regulations, the search was carried out on official websites. Finally, for this study, only articles published in English and Spanish were considered, acknowledging the possibility that studies in other languages might also contain relevant information. The methodological process is shown in Figure 1.

The planning phase allowed us to establish the protocol to meet the research objectives. Strategies, the scope of the review, and inclusion and exclusion criteria for articles (relevance of content, methodological quality, and contribution to the research topic) were defined. Thus, the process began with the analysis of titles and abstracts to determine the importance of the studies. Subsequently, information sources were determined. This involved the systematic search for relevant studies, articles, and documents in academic databases, digital libraries, and other specialized resources. Keywords and search terms formed the basis for obtaining information. Consequently, potentially useful studies for the review were selected. This step allowed for the exclusion of documents that did not meet the inclusion criteria established during the planning phase. The remaining studies underwent a detailed eligibility assessment. Full texts of the articles were reviewed to determine compliance with predefined criteria. Documents that did not meet these guidelines were excluded at this stage. On the other hand, the inclusion of relevant research was crucial to ensure the validity and representativeness of the literature review. By including a representative sample of the existing literature on the topic, a more detailed perspective on the study was provided. Finally, the critical analysis was generated from the selected documents concerning: (i) the financial system and entities, (ii) financial management based on cooperative principles and its application in Latin America, and (iii) social responsibility in cooperatives. The discussion of the findings and the formulation of conclusions were then conducted.

Donthu et al. [94] offer a guide for conducting bibliometric analysis, which is related to the PRISMA methodology. Both approaches emphasize the importance of a detailed planning phase, during which protocols are established and inclusion and exclusion criteria are defined to select relevant studies. Furthermore, after the initial selection, both approaches recommend a thorough evaluation of the full texts to ensure they meet the predefined criteria, thereby ensuring the validity and representativeness of the included studies. Finally, both methodologies conclude with a phase of critical analysis and the formulation of conclusions. In the case of Donthu et al., this involves interpreting patterns and trends in research, whereas in the systematic review, the focus is on specific aspects of the financial system, cooperative management, and social responsibility in Latin America. In this context, by clustering and analyzing the selected studies, the review using the PRISMA methodology provides a detailed and critical perspective on the topic, including the financial system, cooperative management practices, and social responsibility, with a particular focus on Latin America. This approach enhances the validity and depth of the analyzed information, enabling a more comprehensive understanding of the subject and helping to guide future research directions.

3. Results

3.1. Analysis of the Financial System

The financial system plays an important role in the functioning and development of the global economy [29,95], facilitating investment, economic efficiency, and financial inclusion. It is composed of various institutions and markets that facilitate the intermediation between the resources of savers (surplus units) [96] and individuals or companies that require financing (deficit units) [92,97]. The main financial entities worldwide include banks, cooperatives, societies, and insurance companies [7,98,99]. The participation of these entities contributes to the well-being of the population [100], as they facilitate the circulation of capital [8,101]. Additionally, they mobilize economic resources toward productive and investment activities [102], through deposit collection, loan granting, investment management, and the provision of financial services [16,18,103,104]. This maximizes the return on available resources and improves long-term productivity [105], driving economic growth and contributing to the improvement of the population’s quality of life [106].

The financial system provides the necessary mechanisms for the efficient channeling of savings, risk management, and economic development [107]. It is composed of three elements: financial instruments, intermediaries, and markets (Figure 2) [108].

The financial system is responsible for direct and indirect financing. In indirect financing, surplus agents seek to save or invest their money by depositing their savings in financial institutions such as banks, savings banks, and financial cooperatives. In contrast, in direct financing, surplus agents invest directly in financial markets rather than depositing their money in financial institutions. In this sense, for these types of financing to take place, it is important to recognize the role of the three main elements:

The first element, related to financial instruments, includes assets from the public or private sector [109]. They represent the monetary value of transferring and allocating resources for investment or financing [110]. These instruments can be stocks, bonds, financial derivatives, and investment funds [111]. Stocks represent a portion of a company’s ownership and offer investors the opportunity to participate in profits and corporate decisions [112]. Bonds are debt instruments issued by public or private entities to finance operations or projects. They provide income to investors through interest payments and the return of principal at maturity [113]. Financial derivatives allow market participants to manage risks associated with price fluctuations in assets, currencies, or stocks [114]. Investment funds pool the assets of multiple investors to minimize risks and maximize financial returns [115].

The second element refers to financial intermediaries, considered the core of the financial system that contributes to sustainable economic development [116]. These include banks, cooperatives, societies, and insurance companies [4,8]. These institutions facilitate financial intermediation, mobilize capital, provide services, manage risks, and contribute to economic stability [92], generating liquidity in financial markets [117,118]. They provide the necessary resources for business expansion, infrastructure investment, and project execution [119]. They are regulated by government agencies [2,120] and must comply with regulations that ensure the integrity of the system [121] and protect the interests of users [122,123]. It is important to highlight the role of financial cooperatives as intermediary institutions. These entities provide essential financial services in areas where access to traditional banking services may be limited, thereby promoting financial inclusion [8]. The main differences from other types of financial intermediaries are based on their objectives and focus, cooperative structure, and profitability model [84]. In this way, cooperatives contribute to the economic development of areas that may be underserved by large banks. They reinvest their profits in the community and support small and medium-sized enterprises, promoting regional economic development and job creation.

Finally, the third element comprises financial markets, which promote economic stability, facilitate resource allocation, and generate investment [124], through the buying and selling of financial assets such as the following: (i) stocks, (ii) bonds, (iii) currencies, and (iv) commodities [125]. Additionally, they perform other functions such as efficient resource allocation, risk management, asset pricing, and channeling savings into productive investments [126]. Therefore, they are important for economic development by providing access to capital for individuals, businesses, and governments, promoting investment and sustainable economic growth [127].

In this context, the elements of the financial system are fundamental to the functioning of any country’s economy [88,128]. However, the financial system faces significant challenges [116]. Therefore, effective management is an important factor in ensuring the system’s stability and integrity [51,129], protecting consumers, and minimizing systemic risks [110,130]. This allows for the anticipation of financial crises and ensures that entities operate in an ethical and responsible manner [111].

Finally, the role of the financial system in the global economy reveals its contribution to economic development through its elements. Comprised of a network of instruments, institutions, and markets, it performs functions such as intermediating between savers and deficit entities, mobilizing capital toward productive investments, and ensuring the efficient circulation of economic resources. However, despite its positive contributions, the financial system also faces challenges that require ethical and responsible management to ensure transparent operations and benefit economic and social well-being.

3.2. Financial Management and Social Responsibility

The management of financial entities ensures the efficient allocation and distribution of resources [129,131] through the analysis of actions and informed decision-making for their administration [51,52,132]. In this regard, the objective of financial management is to reduce the risks faced by these entities [133] and contribute to the achievement of their goals [134]. To accomplish this, financial entities follow these stages: (i) needs analysis, (ii) definition of the required amount of financial resources, (iii) establishment of the alternative and method of financing, (iv) financial resources management, and (v) evaluation of financial results (Figure 3) [135,136].

These stages are carried out through a continuous and structured process [120] that can be divided into four main functions: planning, organizing, directing, and controlling (Figure 4) [135]. These functions ensure that financial resources are managed efficiently [137]. Financial planning allows for the establishment of clear goals and the development of strategies and plans to achieve them [138,139]. In this stage, aspects such as the establishment of financial objectives [140], financial projections [141], and financial risk analysis must be considered [142]. Financial organizations focus on the organizational structure needed to effectively implement financial plans [59] through resource allocation and the definition of roles and responsibilities [26]. On the other hand, directing enables the effective implementation of plans and strategies [143]. This includes informed financial decision-making, effective communication, and strategy development among teams within the entities [144]. Finally, financial control allows for monitoring and evaluating performance in relation to established objectives and standards, integrating management indicators [145,146].

Efficient financial management enables the development of strategies [147] that contribute to the sustainable growth and stability of financial entities [148]. This includes capital management, cost optimization, financial risk assessment, and strategic planning [149]. In this context, effective management of financial entities involves efficiently managing financial, human, and technological resources [150,151]. Therefore, transparency and ethics are fundamental in all operations to address current and future challenges [152]. Considering that solid financial management prevents market fluctuations and provides the necessary resources to invest in social responsibility initiatives [153].

In recent years, business ethics and sustainability have become increasingly valued by consumers, investors, and financial regulators [154]. Therefore, understanding the importance and impact of financial management and social responsibility is fundamental to business success in the 21st century [155]. Financial management and corporate social responsibility should be considered interdependent components [48]. These are pillars that define the economic viability of a company and its impact on society [156,157]. Furthermore, their effective integration brings multiple benefits to both the company and the community [115].

Social responsibility dates back to the 19th century [158] and involves integrating ethical, social, and environmental considerations into an organization’s daily operations and long-term strategies [159,160]. In this regard, financial entities are evaluated based on their commitment to sustainable, inclusive, and ethical practices [161]. This includes promoting financial inclusion, supporting community development initiatives, and integrating environmental, social, and governance criteria into investment and financing decisions [162]. Furthermore, social responsibility manifests in various forms such as the following: (i) fair labor practices, (ii) environmental sustainability initiatives, (iii) contributions to the local community, and (iv) transparency in communication with stakeholders [163,164].

Financial entities have addressed social commitment by defining their responsibility and sustainability policies [165]. Additionally, they have integrated metrics to evaluate the following: (i) social, economic, and environmental impact [166], (ii) short-term resilience against long-term investment [167], and (iii) organizational culture that values transparency and ethics at all levels [168]. For this reason, these companies must understand the environment in which they operate [25]. Therefore, credit unions distinguish themselves in the financial system by prioritizing member service and community engagement over profit maximization. Their role in integrating sustainability into their core mission aligns with broader sustainability goals, adding distinct value compared to traditional financial intermediaries. By focusing on sustainability and social responsibility, credit unions not only strengthen community connections but also serve as a model for other financial institutions, emphasizing the importance of ethical practices in the financial landscape.

Consequently, planning, organizing, directing, and controlling are interrelated and interdependent functions in management. They ensure that financial resources are effectively managed to meet the strategic and operational objectives of financial entities. Therefore, solid financial management that integrates responsible practices not only promotes financial stability but also facilitates sustainable growth and adaptability to changes in the economic and business environment. In this regard, it is essential for financial entities to adopt ethical practices, promote respect for human rights, focus on environmental care, and invest in community development.

3.3. Credit Unions

3.3.1. Credit Unions in Latin America

Cooperativism is considered an important element of a community’s economic development strategy [55,56]. Cooperatives enable the creation of a social economy that provides communities with various forms of social and human capital [169]. They contribute to sustainable economic growth, the generation of stable employment, and the improvement of quality of life [8]. Additionally, they provide financial products and services [64] and promote principles of solidarity, democracy, and social responsibility [170] through participatory structures and collective decision-making [67]. These organizations promote economic autonomy [171] and strengthen the social fabric of the localities where they operate [66], aligning with the foundations of corporate social responsibility.

In Latin America, cooperatives have contributed to the region’s economic and social development [172,173]. Latin American cooperativism has undergone significant evolution throughout its history [174]. It originated in the 19th century in Argentina, Brazil, Mexico, and Venezuela [175,176]. Subsequently, starting from the early decades of the 20th century, it developed in the rest of the region’s countries [177]. Factors influencing cooperativism included European migration waves that introduced organizational and economic models, especially from England, Germany, France, and Italy [178]. The first cooperatives focused on the following: (i) the agricultural and consumer sector [179]; (ii) the Catholic Church [180]; (iii) governments; and (iv) labor unions [67].

Cooperativism has developed in various ways in Latin American countries, adapting to local conditions and diversifying its areas of intervention [181]. Additionally, sectors such as credit, consumer goods, housing, and public services have been integrated into the cooperative model [8]. However, as cooperatives spread throughout the region, they also faced challenges and adversities [70]. These challenges included political changes, economic crises, and market fluctuations [182]. Consequently, cooperatives organized themselves at national and international levels [174], establishing federations and confederations to defend their interests [183,184].

Figure 5 shows the credit unions in Latin America in 2022. The available data indicate a varied distribution of these entities across the region. Brazil has the highest number of cooperatives, totaling 834, highlighting its status as a Latin American economic powerhouse [185]. It is followed by Mexico with 803 cooperatives, Paraguay with 507, and Peru with 437. On the other hand, countries like the Dominican Republic have a smaller number of cooperatives. In this context, the number of credit unions in Latin America reflects the diversity and socioeconomic reality of each country, as well as a shared commitment to sustainable development, financial inclusion, and social justice. These institutions play an important role in building more equitable and resilient economies across the region [173,186].

3.3.2. Social Responsibility in Credit Unions

Social responsibility in credit unions considers the governance and internal structure of each entity [187]. This involves evaluating the accessibility and equity in the provision of financial products and services [122], supporting local economic development and job creation [11]. Additionally, it examines decision-making [188], management transparency [189], the democratic participation of members [190], and the economic impact on their members and the community [191]. In this context, solvency and liquidity are ensured [192], risks are managed [142] and compliance with regulations set by regulatory entities is maintained [121]. Therefore, social responsibility in cooperatives integrates financial education for their members [71], support for disadvantaged communities [193], financial inclusion [23], and the improvement of social well-being [64].

The mechanisms for evaluating social responsibility can vary depending on the context and specific characteristics of each cooperative [193]. They involve the development of indicators [145], data collection [135], participation from different stakeholders [89], and accountability for the results obtained [194]. These factors are important to ensure that these entities adhere to their cooperative principles [195] and contribute effectively to the sustainable and equitable development of their communities [24]. Additionally, they demonstrate the commitment of credit unions to sustainability [196], thereby promoting a business model focused on collective well-being and a positive impact on society [197].

In this context, the social responsibility of credit unions in Latin America aligns with several SDGs [198]. Their focus on equity, inclusion, and local economic empowerment positions them as important allies in fulfilling the SDGs [199]. For example, they contribute to SDG 1: No Poverty, by promoting financial inclusion and providing access to financial services for marginalized populations [57]. Additionally, they align with SDG 8: Decent Work and Economic Growth, as they promote local economic development and financial inclusion, thereby supporting sustainable economic growth and decent employment [200]. They are also connected to SDG 10: Reduced Inequality by offering accessible and fair services to all their members, regardless of income level, thereby contributing to a more equitable distribution of resources. [86]. Finally, they are also linked to SDG 17: Partnerships for the Goals, as they often collaborate with other entities and stakeholders to achieve common objectives, strengthening cooperation across different sectors to address global challenges and contribute to the SDGs [201].

Credit unions in Latin America distinguish themselves in the financial system by prioritizing member service, community development, and economic empowerment over profit maximization. Unlike traditional financial intermediaries that prioritize financial returns, credit unions focus on social responsibility, participatory governance, and local engagement. Their commitment to sustainability, which is integral to their mission of supporting community development, enhances their stability and adds value by strengthening social capital. This dual emphasis on financial and social outcomes highlights the importance of studying credit unions, as their practices offer valuable insights into achieving societal goals while upholding ethical standards.

3.3.3. Principles and Values of Cooperativism

Cooperatives are governed by seven principles (Figure 6). These cooperative principles are fundamental to understanding the functioning of these entities [195]. They have been established by the International Cooperative Alliance [202]. Their purpose is to guide the operation of cooperatives [203], promoting values of solidarity, self-management, and shared responsibility [204]. The first principle refers to voluntary and open membership [205]. It promotes the inclusion of cooperatives, where individuals voluntarily come together to meet their common economic needs [206]. The second principle, democratic member control, focuses on the equitable participation of all members in decision-making [207]. Each member has the right to one vote, regardless of the number of shares they own, ensuring that decisions are made fairly and benefit all members [208]. The third principle, member economic participation, means that members contribute equitably to the cooperative’s capital and responsibly manage financial resources [209]. This promotes autonomy and economic stability [148]. The fourth principle, autonomy and independence, highlights the cooperatives’ ability to self-manage and make decisions that address the needs of their members [210]. The fifth principle, education, training, and information, commits cooperatives to the personal and professional development of their members [211]. The sixth principle, cooperation among cooperatives, promotes solidarity and mutual support among these entities [212]. Through inter-cooperation, resources, knowledge, and experiences can be shared for the common benefit [213]. Finally, the seventh principle, concern for community, focuses on the cooperatives’ commitment to generating benefits for their members and the community in which they operate [6].

The cooperative principles reflect fundamental values [79] for building inclusive and sustainable economies worldwide [214]. In this regard, cooperative values represent the pillars of these entities [215] which aim to balance economic efficiency with social justice [72]. These values guide the actions of cooperatives and reflect universal principles that promote solidarity, equity, and democratic participation [216]. Solidarity is the most distinctive value of cooperativism [217]. Solidarity is manifested in the cooperation among members to achieve common goals [218]. On the other hand, there is equity [70]. In cooperatives, each member has one vote, regardless of the amount of capital they contribute [219]. This ensures that decisions are made democratically and that all members have a say in matters affecting the cooperatives [67]. Finally, democratic participation is fundamental in cooperatives [63]. Members not only elect their representatives but also participate in decision-making and policy formulation [220].

The cooperative principles and values have a significant impact on the community. Cooperatives promote sustainable local development by reinvesting their profits in the community and supporting initiatives that improve the quality of life for residents. This commitment to sustainable economic and social development strengthens community bonds and contributes to the building of more inclusive and equitable societies.

4. Discussion

Gambetta et al. [33] mention that the financial system is composed of public and private institutions. According to Park et al. [4], its objective is to capture the savings of surplus units to channel them. This is done through loans, generating financial returns [29] which, according to Mckillop et al. [8] benefit the intermediary institutions and their members or clients. Therefore, Nasreen et al. [6] state that this contributes to the economic progress of countries by transforming individual savings surpluses into loans for those who need financing. Additionally, according to Uzougbo et al. [221] and Borisova et al. [7], financial entities range from compliance with laws to the integration of sustainability, creating economic and social value in a dynamic market. However, according to the study by Li et al. [145] these entities face an increasingly complex environment. Additionally, as described by Burtonshaw [133] due to this complexity, there is a need for effective management within organizations. Khang et al. [222] and Ofoeda et al. [223] mention that the financial sector has experienced changes in recent years, including government regulations to ensure the management of public and private savings for the fulfillment of monetary policy. Therefore, we consider that the entities that form the financial system are important for their contribution to local development, as they stimulate economic growth, foster financial inclusion, contribute to economic stability, and promote savings and investment.

On the other hand, Cracogna et al. [175] state that cooperatives in Latin America promote values such as economic democracy, solidarity, and sustainability through the provision of financial products and services to its members [224]. According to McKillop et al. [8] this contributes to local development, poverty reduction, and financial inclusion. To achieve this, Eşim [183] indicates that these organizations must be managed with a triple bottom line approach: financial, social, and environmental. Additionally, Li et al. [145] mention that clear goals and performance indicators should be established, allowing for better development planning by institutions and governments [39]. In this regard, Ali et al. [25] state that it is important to understand the relationship between financial management and social responsibility. Furthermore, Awaysheh et al. [156] indicate that this relationship allows for the creation of sustainable value and the comprehensive management of entities. The management and social responsibility in cooperatives have an economic and social impact on the communities where they operate [189]. Additionally, Belasri et al. [27], mention that cooperatives, as entities based on principles of solidarity and social responsibility, face several challenges when attempting to integrate responsible practices into their operations. Furthermore, Anton et al. [53], indicate that one of the most prominent challenges is the need to demonstrate the economic and social impact of their activities. Therefore, we consider that in the case of Latin America, this can be achieved through the integration of strategic objectives, risk management, the creation of shared value, access to capital, best practices in corporate social responsibility, and alignment with national development goals.

Regarding qualitative tools, Nuchian et al. [225] indicate that cooperatives can employ methods such as case studies, content analysis, and interviews to evaluate the impact of their social initiatives. According to Michele [226] this allows for the identification of how the cooperative’s activities influence its members, employees, and the community. On the other hand, regarding quantitative tools, Calabrese et al. [227] state that these provide numerical data and statistics that support the measurable achievements and impact of the cooperative’s social actions. This can include financial indicators such as return on social investment, tangible economic benefits, job creation, and economic returns [228]. Additionally, structured surveys, statistical analyses, and economic models can be used to quantify the social and economic impact in terms of net benefits [229]. In this sense, we believe that cooperatives must ensure that social responsibility initiatives are measured through both qualitative and quantitative indicators to assess their impact, without jeopardizing the satisfaction of their members’ needs.

Cooperatives operate in a dynamic and diverse environment. Therefore, according to Van der Heijden et al. [230] social responsibility strategies must be adaptive to the needs of their members, and Katsoulakos & Katsoulacos [231] mention that this is achieved through their cooperative principles and values. In this particular context, Vásquez et al. [232] indicate that it is necessary to recognize various limitations regarding the adherence to these principles. For instance, in the study by Bauwens et al. [233], the management capacity of cooperatives can vary due to factors such as size, number of members, and available capital. Therefore, we believe that in the case of Latin America, to ensure the effective fulfillment of their social responsibilities, it is important to address inherent limitations by adapting their approaches and practices to the realities of their environment and organizational structure. This involves creating a balance between adhering to cooperative values and principles and managing the resources allocated for this purpose.

In a socioeconomic context, Latin America has historically faced high levels of income inequality and social exclusion [77]. However, credit unions offer a model that promotes financial inclusion [223] and equitable access to financial services [215]. This is particularly important in rural and underserved areas where traditional banking services are often limited [187]. Additionally, the region has experienced economic volatility and crises [209], which can undermine trust in traditional financial institutions. As a result, financial stability becomes an important aspect. Tabak et al. [234], argue that credit unions can contribute to regional financial stability by providing accessible and equitable financial services, thereby mitigating the impact of economic crises on vulnerable communities. In this regard, the diversification of services and focus on local development are also factors that strengthen economic resilience [209]. We believe that cooperatives, with their emphasis on member trust and community resilience, can offer more stable and reliable financial services during economic downturns.

The relevance of Latin America in the study of credit unions and sustainability lies in its economic, social, and environmental diversity [181]. Credit unions have the potential to promote sustainable practices and enhance financial inclusion, thereby contributing to the region’s sustainable development [8]. The interaction between institutional strategies and sustainability practices in this context can offer valuable lessons and replicable models for other parts of the world [196]. Arora y De [235] highlight the interplay between strategies and institutions in Latin America regarding environmental sustainability, where cooperatives can leverage this framework to integrate sustainable practices, such as financing green projects and promoting clean technologies. We believe that sustainability not only enhances corporate social responsibility but also strengthens member loyalty and attracts new partners who are environmentally conscious.

Additionally, it is important to consider the relationship between corporate governance and the cost of capital in Latin American companies. Teti et al. [236] mention that credit unions, with their democratic ownership and management structure, can offer an alternative to the traditional corporate model, potentially reducing the cost of capital due to their focus on long-term stability and sustainability. By promoting diversified and resilient financial systems, cooperatives can contribute to overall financial stability and reduce systemic risks [11]. The authors consider that cooperatives could leverage these practices to lower financing costs and enhance financial stability.

Finally, regarding the limitations of this study, the primary issue highlighted is the availability of information sources. Depending on the availability of accurate and up-to-date data, the ability to conduct various analyses could be compromised. The lack of detailed and reliable information could distort the study’s conclusions and limit its analysis. Another limitation is the timeliness of the information, indicating the need to periodically update the data and continuously review the operational and management conditions within cooperatives.

5. Conclusions

Financial management and social responsibility are not separate aspects, but interdependent components that, when strategically managed together, can strengthen the competitive position of financial entities, contribute to long-term sustainability and create a positive impact on society and the environment. Effective financial management optimizes resources and manages risks while incorporating corporate social responsibility practices. This involves maximizing financial returns, contributing to sustainable development through ethical practices, promoting financial inclusion, and supporting community initiatives. Transparency and ethics are key pillars that guide these operations towards a positive and sustainable impact on society.

Credit unions play a vital role in the economic and social development of Latin America, promoting principles of solidarity, democracy, and social responsibility. These entities offer accessible and equitable financial products and services, and they also strengthen social cohesion and sustainable local development through participatory structures and collective decision-making. Their cooperative business model contributes to building more equitable and resilient economies throughout the region. In this sense, cooperative principles serve as implicit foundations for social economy organizations. Thus, for credit unions, these principles distinguish their actions and objectives from those of private banks.

Social responsibility in financial cooperatives is reflected in their management, their ability to provide financial products and services, and the economic impact on their members and communities. These aspects align with the SDGs by promoting financial inclusion and reducing poverty (SDG 1), fostering local economic growth and decent work (SDG 8), reducing inequalities (SDG 10), and establishing partnerships to achieve the goals (SDG 17). Therefore, their evaluation mechanisms may vary but often include the development of indicators to measure the impact of these practices and ensure adherence to cooperative principles, reinforcing their commitment to sustainable and equitable development.

Credit unions face the significant challenge of achieving economic sustainability while providing socially inclusive financial services and products. This requires maintaining agile, participatory, and democratic processes that protect the interests of both internal stakeholders and the broader community. In this context, future research should explore strategies to balance economic viability with social responsibility, focusing on innovative models that enhance inclusivity and stakeholder engagement. Additionally, upcoming studies could examine the effectiveness of various governance frameworks and their impact on organizational sustainability and community well-being. Furthermore, research could assess the role of technology in facilitating these goals and identify best practices for integrating social and economic objectives within credit unions.