The Superintendency’s decision affects 98,000 members, primarily from Cuenca, leaving many uncertain about their financial future.

CREA Cooperative’s Sudden Closure

In a dramatic turn of events, the Superintendency of the Popular and Solidarity Economy (SEPS) has announced the forced liquidation of the CREA savings and credit cooperative, headquartered in Cuenca. The decision, made public on July 29, 2025, comes after a series of financial mismanagement issues that left the cooperative in a precarious state. With over 98,000 members across nine provinces, including Cuenca, Pichincha, and Guayas, CREA’s closure marks the latest in a wave of over 600 similar financial institutions that have folded in Ecuador over the past decade.

The Immediate Impact on Members

On the morning of the announcement, the main CREA office in Cuenca was crowded with concerned members who had just learned of the cooperative’s closure. Dozens of individuals arrived, anxious about their savings and unsure of how to recover their funds. The office was closed, and staff distributed information sheets to members. Police were stationed on-site to maintain order amid the ensuing chaos.

For many of CREA’s members, the announcement has been a source of deep distress. One member, visibly shocked, expressed disbelief at the turn of events, calling the situation “incredible.” Others, still processing the news, made their way to the office, hoping for clarity on how the liquidation would affect them.

Deposit Insurance and Withdrawal Limits

Despite the unsettling news, the Superintendency has reassured members that they will be able to recover their deposits up to $32,000, thanks to the backing of the Deposit Insurance Corporation (Cosede). This amount applies to the first phase of payments and will benefit around 98.30% of the cooperative’s members, as they hold balances of less than the $32,000 limit.

While the exact schedule for returning deposits remains unclear, authorities have promised that further details will be provided in the coming days. The majority of members, therefore, will be able to reclaim their funds within this limit, though questions remain for those with higher balances.

Reasons for Liquidation

The decision to shut down the CREA cooperative stems from a combination of severe financial mismanagement and failure to meet regulatory requirements. The Superintendency cited two primary reasons for the closure:

1. Non-compliance with supervision protocols: CREA failed to meet the conditions set out by the Superintendency, which had been monitoring the cooperative’s operations for some time.
2. Deteriorating financial health: The cooperative’s solvency ratio had fallen drastically, from a healthy level to just 3.36% as of May 2025. This figure is far below the legal requirement of 9%, signifying that CREA was unable to cover its liabilities. The Superintendency noted that CREA’s technical equity stood at $6.5 million, while its risk exposure to bad loans amounted to $196 million. These figures indicate an unsustainable financial structure and an inability to manage high-risk loans effectively.

The Bigger Picture: Financial Instability

The closure of CREA is part of a broader trend of financial instability within Ecuador’s savings and credit cooperative sector. Over the past ten years, more than 600 such institutions have shut down, some facing similar issues with loan defaults and mismanagement. For the Ecuadorian financial system, the liquidation of CREA serves as a stark reminder of the volatility that can afflict cooperative banks and their members.

The Central Bank of Ecuador has announced that it will review the status of other cooperatives in the country to assess which ones might be suitable for conversion into banks, in an attempt to stabilize the financial system. However, for now, the focus remains on the liquidation process of CREA, with members anxiously awaiting further updates on how and when they will receive their deposits.