Cooperatives play a crucial role in promoting values of self-reliance, good governance, equity and transparency. The concept of cooperatives is based upon the ethical values of openness, honesty and social responsibility. They are organized by a group of persons voluntarily coming together to meet their common social, economic and cultural needs. They are owned and controlled by members in a democratic manner. Active participation of all the members is ensured without any kind of social, racial, political, gender or religious discrimination.
A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned democratically controlled enterprise.

The guiding principles of cooperatives are:

These principles were developed by the International Cooperative Alliance (ICA)

The promotion of sustainable livelihoods is strongly linked with income-generation activities for the community. Cooperatives play a major role in enhancing such activities and satisfying the basic community needs. They provide opportunities to people to organize services – such as financial services, agricultural extension and marketing services, input supply etc – collectively by pooling their resources without depending upon the government or other agencies.