Ecuador's Cooperative Sector Shows Stability Amidst El Niño Concerns

Ecuador's largest savings and credit cooperatives have shown improved performance in key indicators through July 2026. The overall delinquency rate for cooperatives, which neared 10% in 2024, has decreased to approximately 8%.

The cooperative sector comprises around 390 entities, with the majority of activity concentrated in the larger institutions classified under Segments 1 and 2. These segments include cooperatives with assets exceeding USD 20 million; Segment 1 has 44 entities, and Segment 2 has 66.

As of July 2026, the solvency indicator for all large cooperatives exceeded the legally required minimum of 9%. Delinquency rates varied by segment: Segment 1 reported 8.25% (a slight improvement from 8.29% in July 2025), while Segment 2 saw a more significant drop to 6.73% from 7.46% in July 2025. The microcredit segment, however, recorded a higher delinquency rate of 10.82% in July 2026. The overall delinquency rate has remained stable in 2026, following increases in 2024 and early 2025 attributed to economic recession and heightened insecurity.

Credit portfolios are growing, though at a slower pace than before the 2024 recession. Segment 1 cooperatives' credit portfolio reached USD 15.913 billion in July 2026, a 2.18% increase from July 2025. Segment 2 cooperatives saw a 13.4% increase, totaling USD 2.857 billion. Total assets for cooperatives grew 3.5%, from USD 23.943 billion in July 2025 to USD 24.791 billion in July 2026.

Profitability remains positive, with Segment 1 cooperatives reporting USD 70.6 million in gains through July 2026, and 42 out of 44 entities profitable. Segment 2 cooperatives collectively earned USD 8.8 million, with five entities reporting losses.

What to watch

The Government of Ecuador has officially declared the presence of the El Niño phenomenon. The National Service of Meteorology and Hydrology of Peru (Senamhi) indicates El Niño has entered an extraordinary stage due to significant ocean surface warming, with temperatures exceeding usual values by over 3.5 °C. Waters with elevated temperatures are currently concentrated in the Gulf of Guayaquil and a small area of Tumbes. Forecasts suggest this warm water mass will gradually approach the Peruvian coast between November and December, with light rains expected in the north, intensifying from January 2027. The potential impacts of El Niño, particularly in coastal provinces, and the risks of power outages due to low water levels (estiaje) could pose challenges for the cooperative sector in the remainder of 2026.

Sources: primicias.ec; eluniverso.com; primicias.ec.