The origins of public credit can be traced back to 19th century Europe, when it represented a response to the difficulties of small urban and rural businesses in obtaining credit. Right from the first ever credit institutes established by Schulze-Delitzsch and Raiffeisen, the organisational model aspired to the principles of company democracy and mutual benefit. This model has evolved over time and cooperative banks now play an important role in the European banking sector, boasting over 140 million customers and a market share of 20%. In Italy, "People's Banks" ("Banche Popolari") were first established in the second half of the 19th century, with Tiziano Zalli founding the first Banca Popolare in Lodi in 1864, today the Banca Popolare di Lodi.
True to its founding principles, with its unique cooperative structure and specific focus on small businesses and families, the public credit model is based on three fundamental pillars: participatory democracy through a per capita or per head voting system ("one head, one vote"), management transparency, essential to obtain the consensus of a vast array of Members, and proximity to customers, resulting from its vocation to serve the local community, which makes its strong roots in the community and its in-depth knowledge of its customers one of its strengths.
The Member is the key figure of the public credit model.
Members interact with their cooperative bank in three ways:
- by consuming products and services, as customers of local banks (as well as of the holding company for some services)
- coming into contact with the widespread territorial network;
- by jointly participating, as Members, in the economic results of the Parent Company; by sharing, again as Members, in the management of the bank, exercising the instruments of participatory democracy that define the governance of cooperative banks.