Exploring the Future of Social Economy in the Financial Sector: Sustainable Finance and Credit Cooperatives

The growing urgency of global sustainability challenges, intensified by climate disasters and socio-economic disruptions, highlights the need for financial systems that integrate ethical principles and societal goals. Credit cooperatives and ethical financial institutions are emerging as key players in aligning financial activities with the Sustainable Development Goals (SDGs). Existing literature explores sustainable finance methodologies, innovative regulatory frameworks, and financial instruments like impact investing. However, the potential of credit cooperatives and digital finance in fostering sustainable development remains underexplored. This study analyses the intersection of sustainable finance and credit cooperatives, emphasising their role in advancing resilience, inclusivity, and sustainability within financial ecosystems. Using a qualitative approach, the study reviews recent literature, policies, and case studies to identify trends, challenges, and opportunities in social finance and credit cooperatives. It evaluates regulatory innovations, digital finance advancements, and innovative financial instruments to propose actionable recommendations to policy makers and practioners. The objective is to provide insights into how sustainable finance models and credit cooperatives can bridge the gap between financial and social impact while fostering public policies that promote equity and innovation. Sustainable finance offers transformative potential for addressing global challenges. Credit cooperatives and technological advancements like blockchain and adaptive regulations can drive financial inclusion and sustainability. Future research should focus on empirical validation, hybrid financial instruments, and standardised impact metrics to enhance the scalability and effectiveness of sustainable finance initiatives.