A review of co-operatives, mutuals and member-owned organisations has called on the Australian Prudential Regulation Authority to finalise discussions with the sector on capital raising issues.The Senate Economics References Committee released its report on the sector last week, including a recommendation that "APRA set a target date for the outcome of discussions with the co-operative and mutuals sector on issues of capital raising and bring those discussions to a timely conclusion."The committee said it supported the sector's efforts to develop innovative funding structures and recommended that government "remove any barriers that impede the sector expanding."It said: "The committee heard a consistent message from contributors that a cultural change is required in the financial trading and regulatory sectors in order to take full advantage of the co-operative model."Based on data collected in 2012, the report said there were 103 financial mutuals out of a total of 1600 co-operatives with 13.5 million members. Consolidation since then has APRA listing 90 mutual ADIs at December 2015.The committee said one of its central concerns was the availability of finance to smaller co-operatives that could not raise capital through retained earnings of debt financing. It said: "There are number of innovative practices and policies developing within the sector and overseas that could assist in providing a suite of options for these organisations."These include social impact bonds, crowd sourcing and co-operative capital units.It said discussion with APRA should include an analysis of the recognition of "hybrid" entities, which combine elements of all the various types of co-operatives.The issue is that a "pure" co-operative that allocates control rights to active members sacrifices the ability to access external capital. Hybrid models can overcome this but they need some form of recognition.