Challenges Faced by Women’s Cooperatives and How to Overcome Them

Women’s cooperatives have long been celebrated as engines of economic empowerment, giving women a collective platform to access resources, markets, and decision-making power that most would never reach individually. Yet the reality on the ground is far more complex. Despite their promise, many women’s cooperatives struggle to sustain themselves – not because the model is flawed, but because they face a set of deeply rooted, interlocking problems that are rarely addressed head-on. Understanding these challenges – and the strategies that actually work – is essential for anyone serious about making cooperatives a genuine vehicle for change.

Leadership and trust: the internal fault lines 🔗

A cooperative is only as strong as the relationships within it. When those relationships are strained by poor leadership or persistent mistrust, even a well-funded, well-structured cooperative can collapse from the inside out.

The leadership gap 🔗

One of the most consistent findings across research on women’s cooperatives is the shortage of trained, confident leaders. A 2023 study published in Rural Sociology examining agricultural cooperatives in Cambodia found that while women were nominally given leadership opportunities, they faced significant barriers in actually taking and sustaining those roles – including heavy domestic work burdens, low educational attainment, and inadequate compensation for the time and effort leadership demands. These aren’t personal failings; they are structural constraints that systematically push women away from positions of authority.

The problem is global in scale. Data from Rwanda shows that women make up between 60 and 70 percent of agricultural cooperative members – yet hold only 15 percent of leadership positions. Meanwhile, a NITI Aayog report from 2023 found that in India’s mixed cooperatives, women hold only 26 percent of membership positions, with even fewer in leadership or strategic planning roles. This underrepresentation means cooperatives are often governed without reflecting the priorities and perspectives of their majority membership.

Without trained leaders, decision-making becomes informal and inconsistent. Members may not know who has authority over what, how disputes should be resolved, or how the cooperative’s finances are managed. This ambiguity creates the conditions for the second major problem: mistrust.

When mistrust takes root 🔗

Trust is the social glue of any cooperative. When it breaks down, so does collective action. Mistrust in women’s cooperatives typically emerges from a lack of transparency – in how decisions are made, how profits are distributed, and how resources are allocated. Members from different socioeconomic backgrounds or with different working styles may already enter a cooperative with wariness, and opaque governance only deepens those suspicions.

Research on agricultural cooperatives emphasizes that democratic, transparent governance – joint planning, clear organizational controls, smooth communication – is what keeps cooperatives functional even under pressure. Without it, factions form, members disengage, and the cooperative loses the collective strength that was its primary advantage.

The path forward requires deliberate investment in leadership development. Gender-sensitive training programs – covering conflict resolution, financial planning, team management, and inclusive decision-making – can equip members with the tools they need to lead effectively. The ILO’s COOPAFRICA initiative demonstrated this in Tanzania, where training cooperative leadership on governance and gender equality, alongside subsidizing membership fees for women, produced a 46 percent increase in women’s membership. Structural changes – like mandating that a third of board positions be held by women – have also proven effective at ensuring women’s voices are heard at the governance level.

Marketing and competition: surviving in a market not built for them 🔗

Even a cooperative with strong internal cohesion can falter if it cannot find buyers or sustain itself against better-resourced competitors. For many women’s cooperatives, the market presents a formidable external challenge.

Limited market access 🔗

Small cooperatives – particularly those in rural areas – often produce goods without reliable pathways to sell them. The FAO has documented how cooperatives give women producers collective bargaining power and access to markets they could never reach individually, but this only works if the cooperative actively builds those market connections. Many do not, because members lack the training, networks, or digital tools to do so.

Modern marketing – social media, online storefronts, customer relationship management – remains largely out of reach for cooperatives whose members have limited digital literacy or infrastructure. This is particularly damaging because UNESCAP research on women’s entrepreneurship identifies the ability to track market trends, adopt value-adding practices, and apply quality standards as essential for small producers to compete in today’s economy. Without these capabilities, cooperatives are locked out of higher-value markets.

Competition from large producers 🔗

The competitive disadvantage women’s cooperatives face against larger commercial producers is structural. Bigger firms benefit from economies of scale – they can produce more for less, invest in technology, and offer lower prices. A women’s cooperative making handmade garments or small-batch dairy products simply cannot match a mass manufacturer on price.

The solution is not to compete on the same terms, but to compete differently. The Benkadi women’s cooperative in Mali is an instructive example. Women shallot producers who were getting poor prices individually joined forces with 21 other associations to integrate the larger Faso Jigi cooperative. The result was collective investment in storage infrastructure and access to more advantageous markets – giving members better income and the ability to reinvest in their production. The cooperative used scale and coordination to do what none of its members could do alone.

For cooperatives that cannot merge or federate, the most effective strategy is building a clear unique selling proposition (USP) – something a large producer cannot easily replicate. This might be the artisanal quality of handmade goods, a commitment to sustainable production, or deep community roots that give products an authentic local identity. ILO-supported cooperatives in Kenya took exactly this approach, implementing gender-sensitive organizational development and market research to differentiate their products and build stronger market linkages. The key is helping cooperatives understand their competitive advantage – and then building the tools to communicate it.

Financial constraints and dependency: the sustainability trap 🔗

Of all the challenges women’s cooperatives face, financial vulnerability may be the most difficult to break out of – because it is rooted in both internal capacity gaps and external systemic exclusion.

Locked out of formal finance 🔗

Access to credit is one of the most critical barriers women’s cooperatives encounter. Women frequently lack the collateral required to secure loans from traditional banks, and when they are approved, they often face disproportionately high interest rates. In Kenya, only 30 percent of women in Savings and Credit Cooperative Organizations (SACCOs) access credit, compared to 50 percent of men – a gap that reflects not just formal lending policies but deeper biases about women’s creditworthiness.

Many cooperatives struggle to secure financial support from traditional banks due to the perceived risks associated with lending to women-led organizations. This forces them to turn to alternative sources – often NGOs and donor organizations – which creates its own set of problems.

The NGO dependency problem 🔗

External funding from NGOs and development agencies is not inherently bad – it has helped countless cooperatives get started. The problem arises when a cooperative becomes structurally dependent on that funding, unable to survive without it. Research on cooperatives in Jamaica found that women tended to join cooperatives during periods of plentiful external assistance – and leave when that assistance dried up. This pattern reveals a cooperative that has not truly internalized collective ownership and responsibility, but is instead treating membership as a transactional relationship with a donor.

A cooperative dependent on NGO funding is also vulnerable to shifts in donor priorities, funding cycles, and external conditions entirely outside its control. Scholars argue that cooperatives lacking a genuine grassroots base, democratic participation, and risk-sharing among members are ultimately self-defeating – no matter how much external support they receive. The cooperative model only works when members see themselves as owners, not beneficiaries.

Financial literacy as the foundation of self-reliance 🔗

The route to financial independence runs through financial literacy. Many women entering cooperatives have had limited formal exposure to budgeting, bookkeeping, savings management, or reading financial statements. Without these skills, cooperatives cannot make sound financial decisions, track their own performance, or plan for growth.

Investing in structured financial literacy training – tailored to the specific context of cooperative management – is one of the highest-return interventions available. Successful models like India’s SEWA (Self-Employed Women’s Association), which now supports over 3 million informal women workers, demonstrate what is possible when cooperatives combine financial services, skills training, and organizational support into a coherent system. Similarly, Amul and Lijjat Papad have shown how cooperatives built on genuine member ownership and financial competence can achieve remarkable scale and longevity.

Beyond training, cooperatives can pursue self-reliance through diversified revenue streams – selling products directly to local businesses, developing value-added product lines, or pooling resources for collective savings schemes. India’s recently launched Pradhan Mantri Mahila Saksham Cooperative Scheme (PM-MSCS) under the National Cooperative Policy 2025 takes a structural approach, offering digital literacy programs, tax benefits for majority-women cooperatives, and subsidized loans in sectors like dairy, handloom, and agriculture. Government-backed schemes like these, when combined with strong internal capacity, can give cooperatives the scaffolding they need to transition from dependency to durability.

Connecting the challenges: why an integrated approach matters 🔗

Leadership failures, market exclusion, and financial vulnerability are not separate problems – they reinforce each other. A cooperative with weak leadership is less likely to negotiate effectively with buyers or manage funds responsibly. One that is financially illiterate will struggle to develop a credible business case for market entry. And a cooperative dependent on NGO funding may never build the governance culture needed for genuine democratic participation.

This is why piecemeal interventions rarely work. The cooperatives that succeed over the long term – whether it is SEWA in India, Faso Jigi in Mali, or ILO-supported cooperatives in East Africa – tend to be those that develop leadership capacity, market presence, and financial sustainability simultaneously. They treat their members as owners with agency, not recipients of external support. They invest in transparency and trust as organizational assets. And they carve out a distinct market identity that larger competitors cannot simply absorb or undercut.

Women’s cooperatives hold genuine transformative potential. But that potential is only realized when the structural barriers these organizations face are named clearly, addressed systematically, and met with both internal will and external support that respects the cooperative’s autonomy. The goal is not just for cooperatives to survive – it is for them to become fully self-sustaining institutions that outlast any single donor, program, or generation of members.

What do you think? Given that NGO dependency can ultimately weaken a cooperative’s long-term survival, how should external organizations design their support to build genuine self-reliance rather than reliance on continued aid? And in contexts where women face both domestic burdens and low financial literacy, which challenge should a cooperative prioritize tackling first – and why?

References

1. https://onlinelibrary.wiley.com/doi/10.1111/ruso.12490
2. https://nationaleconomicforum.org/nef_articles/women-led-cooperatives-and-economic-empowerment-global-evidence-and-policy-implications-for-india/
3. https://www.drishtiias.com/daily-updates/daily-news-analysis/participation-of-women-in-cooperatives
4. https://www.iarconsortium.org/srjals/8/2830/institutional-strategies-for-addressing-barriers-to-women-s-participation-in-agricultural-cooperatives-4671/
5. https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@africa/documents/publication/wcms_174990.pdf
6. https://reliefweb.int/report/world/cooperatives-empowering-women-farmers-improving-food-security
7. https://repository.unescap.org/server/api/core/bitstreams/a16e50ef-57d6-4fb3-ad0e-c4385d8f2043/content
8. https://en.wikipedia.org/wiki/Women_in_cooperatives
9. https://www.fundsforngos.org/all-proposals/a-sample-proposal-womens-cooperatives-strengthening-collective-economic-power/
10. https://jpia.princeton.edu/news/supporting-female-farming-cooperatives-smart-choice-african-development-bank