Prospective Development in Co-Operative Finance

Abstract

A number of issues of policy are emerging in co-operative development in India. One of these is the problem arising out of the concept of the crop loan and its definition and implementation. It should be noted that the crop loan emerged as a device which take co-operative credit a step beyond the stage which it had reached previously. At the earlier stage, whether explicitly related to the value of owned land or not, the credit of a cultivator depended largely on his real assets and the loan was made for a twelve-month period and was renewable. There was no explicit linking of the loan or its size to the purpose of utilisation; also fairly severe limits on loans to individuals and to societies as a whole were laid down. The result, almost universally, was that in no case could the credit extended by co-operative societies to an individual member serve his needs fully. The co-operative credit system could not, in the circumstances, hope to replace, even theoretically, the moneylender-trader system.