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Bond of association

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The bond of association or common bond is a basic building block of credit unions and co-operative banks. Common bonds substitute for collateral in the early stages of financial system development. Like solidarity lending, the common bond has since played an important role in facilitating the development of microfinance for poor people. In modern financial systems common bonds remain a key building block, especially for the strategic networks that underpin many of Europe’s co-operative banks.

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The bond of association or common bond is a basic building block of credit unions and co-operative banks. Common bonds substitute for collateral in the early stages of financial system development. Like solidarity lending, the common bond has since played an important role in facilitating the development of microfinance for poor people. In modern financial systems common bonds remain a key building block, especially for the strategic networks that underpin many of Europe’s co-operative banks.