Can Ecuadorian credit unions ensure their sustainability?
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Abstract
The objective of this study is to analyze the relationship between value, profitability, and risk of segment 1 credit cooperatives in Ecuador during the period 2017 to 2024. The methodology employs a quantitative approach based on financial data obtained from the Superintendence of Popular and Solidarity Economy of Ecuador. Econometric models, including linear regression and collinearity analysis (VIF), were applied to measure the impact of variables such as return on investment (ROIC), weighted average cost of capital (WACC), indebtedness (END), liquidity (LIQ) and asset size (LNACT) on the creation of economic value added (EVA). The results show that ROIC is the main determinant of EVA, while CCPP and END negatively affect value generation. Liquidity has no significant impact, and asset size is positively associated with value creation. The implications of the study suggest that COACS management should prioritize strategies to maximize profitability (ROIC) based on revenue diversification and operating efficiency, reducing administrative expenses and credit risks. Optimizing the financing structure would decrease the CCPP and the negative impact on value creation (EVA).
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José Salvador Cortés-García, Universidad Tecnica Particular de Loja - Ecuador
Ph.D. in Tourism, Economics, and Management from the University of Las Palmas de Gran Canaria. Master of Science in Finance from the University of Colima, Mexico. Diploma in Development of Managerial Skills from the University of Colima, Mexico. Diploma in Training for Higher Education Institution Executives from IGLU Mexico Region, University of Colima, Mexico.
Advisor for the evaluation and formulation of investment and financing projects; Business Consultant accredited by the Federal Government of Mexico's Ministry of Economy for business assistance and training in the financial area. Former full-time professor of Finance courses at the University of Colima, Mexico.
Diego Fernando Cueva-Cueva, Universidad Tecnica Particular de Loja - Ecuador
With a solid academic trajectory, since 2012, they have been engaged in university teaching in undergraduate and postgraduate finance programs. An active member of the Finance and Financial Systems research group, with publications in scientific journals and participation in national and international conferences. Director of the Master's in Finance and the Master's in Financial Management and Risk Administration.
Fátima Evelyn Jaramillo-Mendoza, Universidad Tecnica Particular de Loja - Ecuador
She possesses a solid academic background in the financial field, holding a Master's degree in Banking Administration and Finance, a Specialization in Banking and Finance, and Advanced Diplomas in Finance and Banking Legislation, as well as in Financial Management, awarded by the Universidad San Francisco de Quito and the Universidad Técnica Particular de Loja. She is an Engineer in Banking and Finance Administration and an Engineer in Accounting and Auditing from UTPL. Her teaching experience dates back to October 2007 as a guest lecturer, and since April 2021, she has been serving as a full-time professor in the Finance Program.
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