Rural Credit Cooperatives in India

Darden Business Publishing Cases

ISSN: 2474-7890

Publication date: 20 January 2017

Abstract

Recently, the Indian Congress asked a distinguished committee of experts to analyze and make policy recommendations about India's Cooperative Financial Institutions (CFIs), which included organizations such as credit unions and cooperative banks. One committee member, Mohan R. Narayan, a leading economist at a prestigious Indian university, was enthusiastic about the job; it was an opportunity to help millions of rural poor and to have a positive effect on the country. Some poor farmers, deeply in debts to money-lenders, had been reported to resort to committing suicide when they faced with draught or other catastrophes and saw little reason to continue living. Well-functioning CFIs would certainly help restore hope and boost income for the rural poor. But he knew the system had a long history of overregulation, financial laxity, and corruption. Creating an actionable and clear strategy would be no easy task. The case, written at the invitation of the World Bank to study the challenges of building inclusive financial system in emerging countries, invites students to discuss 1) The roles and responsibilities of financial institutions in poverty-reduction and economic development, 2) the benefits and risks of using public versus private institutions to aid development, and more specifically, 3) the economics of credit cooperatives—in particular how they function in an emerging market setting.

Keywords

Citation

Li, W. and Parmar, B. (2017), "Rural Credit Cooperatives in India", Darden Business Publishing Cases. https://doi.org/10.1108/case.darden.2016.000269

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Publisher

:

University of Virginia Darden School Foundation

Copyright © 2007 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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