Germany has one of the most developed cooperative economies in the world. More than 8,000 cooperatives operate across banking, agriculture, retail, housing, and energy, with a combined membership exceeding 22 million — more than one in four Germans belongs to at least one cooperative.
German Cooperatives at a Glance
| Metric | Figure |
|---|---|
| Total cooperatives | 8,000+ |
| Total members | 22 million+ |
| Cooperative banks | 800+ Volksbanken/Raiffeisenbanken |
| Banking assets | €1 trillion+ |
| Largest retail coop | Edeka (€66B revenue, 11,000 member merchants) |
| Housing coops | 2,000+, ~2 million apartments |
| Energy coops | 1,000+ Energiegenossenschaften |
| Apex federation | DGRV (German Cooperative and Raiffeisen Confederation) |
History: Schulze-Delitzsch and Raiffeisen
Germany did not just adopt the cooperative model — it independently invented one of its two principal branches and exported it globally.
Hermann Schulze-Delitzsch: Urban Credit Cooperatives
Hermann Schulze-Delitzsch (1808–1883) was a Prussian judge and liberal politician who saw craftsmen, tradesmen, and small urban manufacturers being crushed by the industrial credit system in the 1840s. Banks would not lend to them; moneylenders charged ruinous rates.
In 1850, Schulze-Delitzsch established the first credit cooperative in Delitzsch, organised around the principle of unlimited mutual liability: members were collectively responsible for the debts of the cooperative, which gave lenders the confidence to extend credit. His cooperatives were self-help oriented — members paid in share capital, managed their own affairs, and expected no state support.
By the 1860s, Schulze-Delitzsch cooperatives — known as Volksbanken (people's banks) — had spread across Germany. His model was explicitly urban and focused on commercial credit.
Friedrich Wilhelm Raiffeisen: Rural and Agricultural Cooperatives
Friedrich Wilhelm Raiffeisen (1818–1888) was a mayor in the Rhineland who watched rural poverty destroy communities in the 1840s and 1850s. Where Schulze-Delitzsch built urban credit coops on self-sufficiency, Raiffeisen initially built on Christian mutual aid and charity before developing a fully commercial model in the 1860s.
Raiffeisen's cooperative banks — Raiffeisenbanken — targeted farmers. Key differences from Schulze-Delitzsch: small geographic territory (a single village), no share capital requirements for members, and unlimited liability backed by the assets of all members in the community. Raiffeisen also extended the cooperative model to agricultural supply (inputs) and marketing (selling grain and livestock collectively).
The Raiffeisen model proved extraordinarily exportable. It spread across Europe, then to Asia, Africa, and the Americas. Japan's agricultural cooperatives (JA), India's rural credit cooperatives, and cooperative banking systems across the developing world trace direct descent from the Raiffeisen template.
Cooperative Law: Genossenschaftsgesetz 1889
Germany passed the Genossenschaftsgesetz (GenG) — the Law on Cooperatives — in 1889, providing a national legal framework for cooperative registration and operation. The GenG has been amended many times since, most significantly in 2006 when the minimum membership requirement was reduced from seven to three. The law specifies democratic governance (one member, one vote in most cases), mandatory auditing through a cooperative audit association, and restrictions on profit distribution.
Legal Framework: Genossenschaft Registration and Regulation
A German cooperative — Genossenschaft — is a legal entity distinct from a company or association. Key features:
- Variable membership: Members can join and leave; their withdrawal triggers a return of their share capital. This "open door" principle prevents hostile takeovers.
- Audit obligation: Every Genossenschaft must belong to a regional cooperative audit association (Prüfungsverband), which audits the cooperative regularly. This mandatory audit structure explains why German cooperative bankruptcies are rare.
- BaFin oversight for financial cooperatives: The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) regulates all German financial institutions, including Volksbanken and Raiffeisenbanken.
- DGRV: The Deutschen Genossenschafts- und Raiffeisenverband (DGRV) is the apex federation, representing the interests of German cooperatives nationally and internationally, and coordinating the audit associations.
Cooperative Banking: Volksbanken and Raiffeisenbanken
Germany's cooperative banking sector is the largest in the world by number of institutions and one of the largest by assets.
The Three-Tier Structure
German cooperative banking operates on three tiers:
Local banks: Over 800 Volksbanken and Raiffeisenbanken across Germany — independent, locally-owned cooperative banks. Each is governed by its own members (depositors and borrowers). There were over 3,000 such banks in 1990; mergers have reduced the number significantly, though Germany still has far more cooperative banks than most countries.
Regional associations: The local banks belong to regional cooperative banking associations that provide shared services and represent member banks in their state.
DZ Bank: DZ Bank AG (Deutsche Zentral-Genossenschaftsbank) is the central institution of the German cooperative banking network. It provides capital markets services, trade finance, and specialised banking functions that individual local banks cannot economically provide alone. DZ Bank is consistently one of Germany's largest banks by balance sheet. It owns several subsidiaries including Bausparkasse Schwäbisch Hall (housing savings) and R+V Versicherung (insurance).
Scale and Stability
The cooperative banking sector holds over €1 trillion in assets. During the 2008 financial crisis, while investor-owned banks required government bailouts, not a single German cooperative bank failed. The mandatory audit structure and conservative lending cultures built over 150 years produced unusual resilience.
Agricultural Cooperatives: The Raiffeisen Chain
Agriculture is where the Raiffeisen cooperative model began, and it remains central to German rural life.
Cooperative Supply and Marketing
Farmers across Germany buy inputs — seeds, fertiliser, fuel, animal feed — through Raiffeisen cooperative supply chains. The same network handles marketing: grain, livestock, and milk sold collectively through cooperative marketing organisations. This keeps input costs lower and selling prices higher than individual farmers could achieve.
RWA Raiffeisen Ware Austria and similar cross-border structures show how tightly integrated the Raiffeisen agricultural cooperative network became across German-speaking Europe.
Dairy and Milk Processing
Germany's dairy sector includes significant cooperative processing. Deutsches Milchkontor (DMK) is Germany's largest dairy cooperative — processing around 7 billion litres of milk per year from approximately 8,000 member farmers. It produces private-label and branded dairy products distributed across Europe.
Retail: Edeka and REWE
Two of Germany's largest food retailers have cooperative roots.
Edeka
Edeka is Germany's largest food retailer by revenue, with approximately €66 billion in annual sales and around 11,000 member merchants. Edeka is structured as a cooperative of independent retailers: individual supermarket owners are members of Edeka, which provides them with purchasing power, logistics, marketing, and the Edeka brand.
The regional structure means Edeka operates through seven regional cooperatives (such as Edeka Nord, Edeka Süd), each independently governed by their member merchants, with Edeka Zentrale AG as the coordinating central entity. This structure keeps local ownership alive while allowing national-scale procurement and marketing.
Edeka owns Netto Marken-Discount and purchased Kaiser's Tengelmann stores in 2017 — moves that extended its reach significantly.
REWE
REWE Group is Germany's second-largest food retailer. Like Edeka, it has cooperative roots and a partial cooperative structure, with independent retailers as members. REWE operates supermarkets, discount stores (Penny), and travel services. Its structure is more hybrid than Edeka's: REWE is partly a cooperative and partly a stock corporation, reflecting decades of evolution.
Housing Cooperatives: Wohnungsbaugenossenschaften
Germany has over 2,000 housing cooperatives (Wohnungsbaugenossenschaften), providing around 2 million apartments to members. This makes Germany one of Europe's largest cooperative housing sectors.
Cooperative housing in Germany works differently from rental housing: members pay a one-time equity share to join, then pay an ongoing occupancy charge that is typically below market rent. Members have a right to occupy their apartment as long as they remain members and pay their charges — this provides effective security of tenure.
German cooperative housing expanded rapidly after World War II to address housing shortages. Large cooperatives like GWG München and Berliner Bau- und Wohnungsgenossenschaft von 1892 have been operating for over a century. In cities like Hamburg and Berlin, cooperative housing represents a meaningful share of the total rental stock.
The cooperative housing model has attracted renewed interest as German cities have experienced sharp rent increases. Converting existing housing stock to cooperative ownership is a debated policy option in several German cities.
Energy Cooperatives: Energiegenossenschaften
Since 2000, and accelerating after Germany's Energiewende (energy transition) policy commitment, over 1,000 Energiegenossenschaften have formed across Germany. These community-owned renewables projects exemplify the electric cooperative model applied to modern energy transition.
These energy cooperatives typically install solar panels on rooftops or wind turbines on farmland, financed by share capital from local members. Members earn a return from electricity sales and, in many cases, receive power at preferential rates.
The average German energy cooperative has around 150 members. Together, they represent a bottom-up model of energy transition: communities own their renewable infrastructure rather than depending on large utilities. Bürgerenergie Berlin and similar urban energy cooperatives have shown the model works in cities as well as rural areas.
After a difficult period (2012–2016) when feed-in tariff reductions reduced returns, the Energiegenossenschaft model has recovered as electricity prices rose and solar panel costs fell.
DGRV: The Apex Federation
The Deutschen Genossenschafts- und Raiffeisenverband (DGRV) coordinates Germany's cooperative sector. Its functions include:
- Representing German cooperatives to national and EU-level policymakers
- Coordinating the audit associations that provide mandatory auditing to all cooperatives
- Publishing sector statistics and cooperative research
- Promoting the German cooperative model internationally (the DGRV runs capacity-building programs in Africa, Asia, and Latin America)
The DGRV is the apex of a multi-layered structure. Below it sit sector federations (for banking, agriculture, retail, housing) and regional audit associations. This layered system has produced one of the most institutionally stable cooperative sectors anywhere.
Challenges: Consolidation and Digital Competition
Bank Mergers
The number of German cooperative banks has fallen from over 3,000 in 1990 to around 800 today. Mergers are voluntary but driven by cost pressure: compliance, IT systems, and regulatory requirements are expensive at small scale. The consolidation trend is expected to continue. Critics argue that merged banks lose their local identity and community focus; supporters argue that larger institutions are more resilient and better-resourced.
Digital Banking
Online banks and fintech companies now compete directly with Volksbanken and Raiffeisenbanken for younger customers. Cooperative banks have invested in digital services — the VR Banking app is used across the network — but shifting customer behaviour remains a challenge, particularly in attracting members under 40.
Agricultural Structural Change
German farming is consolidating. Fewer, larger farms mean the cooperative agricultural model, designed for many small family farms, must adapt. Supply cooperatives and marketing cooperatives are merging, and the average cooperative farm member today is substantially larger than the village-level farmer Raiffeisen envisioned.
FAQ: Cooperatives in Germany
What does Genossenschaft mean? Genossenschaft is the German word for cooperative. It refers specifically to the legal entity form established under the Genossenschaftsgesetz (GenG) of 1889. The word literally means "companionship" or "fellowship." German cooperatives in all sectors — banking, agriculture, housing, energy, retail — can register as a Genossenschaft.
Who were Raiffeisen and Schulze-Delitzsch? Friedrich Wilhelm Raiffeisen and Hermann Schulze-Delitzsch independently developed cooperative credit models in Germany in the mid-19th century. Schulze-Delitzsch focused on urban craftsmen and tradesmen (Volksbanken), while Raiffeisen targeted rural farmers (Raiffeisenbanken). Both models spread globally and are the origin of most cooperative banking systems in Europe, Asia, and the developing world.
Is Edeka a cooperative? Edeka is a cooperative of independent retailers. Approximately 11,000 supermarket owners are members of the Edeka cooperative structure, which gives them buying power, logistics support, and the Edeka brand. Germany's largest food retailer by revenue (around €66 billion) operates through seven regional cooperatives coordinated by Edeka Zentrale. Individual store owners retain local ownership and governance rights.
How is DZ Bank related to cooperative banking? DZ Bank AG is the central institution of Germany's cooperative banking network. It provides capital markets, trade finance, and specialised services to the 800+ local Volksbanken and Raiffeisenbanken that individual banks cannot economically provide on their own. DZ Bank is not itself a cooperative — it is a joint stock company owned by the local cooperative banks — but it serves exclusively the cooperative banking network.
Why did German cooperative banks not fail in 2008? German cooperative banks held very little exposure to the mortgage-backed securities that caused the 2008 crisis. Their business model emphasises traditional lending to local businesses and retail customers. The mandatory audit structure through cooperative audit associations provides early warning of problems. No single German cooperative bank required a government bailout during the 2008–2009 financial crisis.
How do German housing cooperatives work? Members pay a one-time equity share to join a housing cooperative, then pay an ongoing occupancy charge that is typically 20–40% below market rent. Members have long-term security of tenure as long as they maintain their membership. When members leave, they receive their equity share back (adjusted according to the cooperative's rules). Germany has over 2,000 housing cooperatives providing roughly 2 million apartments.
What is an Energiegenossenschaft? An Energiegenossenschaft is a German energy cooperative. There are over 1,000 across Germany, typically owning solar panels or wind turbines financed by local member share capital. Members earn returns from electricity sales and support Germany's renewable energy transition. The model allows ordinary citizens to own renewable energy infrastructure rather than large utilities controlling all generation capacity.
Related Articles
- Types of Cooperatives — The 8 Main Kinds Explained
- Cooperative Banking and Credit Unions
- Agricultural Cooperatives
- Housing Cooperatives
- Cooperative Laws and Regulations
- Cooperatives in Europe
- Cooperatives in France — Crédit Agricole and the French cooperative economy
Sources & further reading
This guide is researched against primary sources. Where we cite figures, they reflect the most recent data published by these organisations at the time of writing.
- Facts & figures on the cooperative movement — International Cooperative Alliance
- Cooperatives and the world of work — International Labour Organization
Find Cooperatives Worldwide
Browse 26,000+ cooperatives by sector and country in our free directory.