Friedrich Wilhelm Raiffeisen was neither a hero nor a revolutionary, but virtually every village or town in Austria has a Raiffeisen Square or Raiffeisen Street. A bridge across the Rhein is named in his honor, and there is a Raiffeisen museum in Weiherbusch. His name is associated with the organization he created to help others.
In the second half of the 19th century, amidst reforms and the collapse of the old regime, competition increased dramatically, and farmers were in severe need of the means to develop. No support was available from the government or private lenders, whose interest rates were extremely high due to the risks and operational expenses related to small-scale loans.
Friedrich Raiffeisen knew poverty first hand. He was born on March 30, 1818 in the German province of Westfalia in the small town of Hamm into the family of a local farmer (the seventh of nine children). The boy's godfather, a priest, helped him receive primary schooling in preparation for a military career. Early in 1842, however, he fell seriously ill, and his eyesight was impaired. He abandoned his military career and took a job in the Koblenz city government. For his achievements, Friedrich Raiffeisen was appointed mayor of Weiherbusch and in 1845 married Emily Stork, the daughter of a Remagen pharmacist.
Like many other towns in Central Europe Weiherbusch lived in poverty. Farmers and craftsmen lacked means to live, and Raiffeisen understood their problems. He was aware of the various Utopian theories prevalent at the time, but saw them as little more than wind and smoke. Raiffeisen's relatives and friends were among the victims of the poverty and suffering, and he sought ways to help them.
In 1847 Raiffeisen used his modest means and donations from the wealthy to create loan societies to help his impoverished compatriots. It soon became obvious, however, that an organization intended to support its members could not succeed on the basis of charitable contributions alone. Raiffeisen felt the organization should instead be based on the principle of mutual aid among its members, and this idea became the foundation of agricultural cooperatives: those in need must not rely on private donations or government support, but must help themselves and others by creating unions and cooperatives, which would also give them the opportunity to sell their products on more favorable terms and compete in the market. Raiffeisen founded the first credit union in 1846, providing banking services to members, helping people consolidate their savings, and granting loans to members on reasonable terms.
In 1872, in an attempt to reduce financial risks and improve the exchange of information, Raiffeisen united the local unions as a regional cooperative credit union. A central office was opened in 1877.
Two crossed horse heads became Raiffensen's emblem; people attached this symbol to the attics of their houses and believed it protected them from misfortune. When Raiffeisen died in 1888 there were 425 societies in Germany and about 120 in Austria founded by his efforts.
The system continued to develop, and in the 20th century Raiffeisen Group was founded, led by Raiffeisen Zentralbank Oesterreich. The group opened its first subsidiary banks in Central and Eastern Europe in the 1980s and is now a leading financial group in the region. Raiffeisenbank has been working in Russia since 1996.
Friedrich Raiffeisen would surely be amazed by the current scale of his noble undertakings. Raiffeisen was acutely aware of people's suffering, and he himself experienced many personal tragedies, including the death of two children, and his beloved wife in 1863. At the age of 47, he lost most of his eyesight, but continued managing his organizations with the help of his daughter Amalia, who became his personal secretary.
Friedrich Wilhelm Raiffeisen died on March 11, 1888 and was buried at the cemetery of Heddesdorf.