Co-Operative Movement in Bangladesh

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  • Topic: Cooperative, Co-operatives UK, History of the cooperative movement
  • Pages : 5 (1491 words )
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  • Published : March 31, 2011
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Assignment on
Co-operative Movement in Bangladesh
Rural Financial Market & Microfinance
Course no: 519

Submitted to
Dr. M. A. Baqui Khalily
Department of Finance
University of Dhaka

Submitted by
Md. Farhad Uddin
Roll No: 11-071
MBA (11th Batch)
Department of Finance
University of Dhaka

Date of Submission: 28th March, 2011.
Co-operative Movement in Bangladesh

Co-operative movement is a series of planned activities with a common goal. The term usually refers more specifically to the formation of non-profit economic enterprises for the benefit of those using their services. Begun in England in the nineteenth century, the co-operative movement stimulated Bengal in the last decade of the century. At first, some British civilians started it in their districts with considerable success. On the initiative of the government of Bengal, it was launched with the enactment of the Co-operative Credit Societies Act 1904. The theoretical origin of the co-operative movement is to be traced from the writings of Robert Owen, Louis Blanc, Charles Fourier and others.

Colonial Period: 
The traditional rural credit system collapsed under the weight of the colonial system. Consequently, the rural economy gradually became dependent on an informal credit market dominated by Mahajans (moneylenders). With the commercialization of agriculture under the colonial dictates, rural indebtedness further increased and by the end of the nineteenth century, the agricultural and Artisan classes became almost totally subjected to the control of usurious moneylenders. In view of the rising indebtedness of the peasantry and artisan classes, the colonial state came forward to solve the problem with its own panacea - co-operative societies. According to the Act of 1904, the co-operative societies were to be established in every district and were required to be managed by members on democratic lines. The general meeting elected a chairman and a committee of management. All decisions as to liabilities, loans, investments, interests, etc. were to be adopted at the general meeting. During the early years of the movement, the societies were financed either by loans from government or from private persons and deposits made by members. The government loan up to a certain sum was normally interest free. The village-based agricultural credit societies started giving loans to deserving members. Co-operative societies were also set up for fishing and weaving classes, consumers, and in some urban communities. A new Co-operative Act was enacted in 1912 to co-ordinate their activities and to provide for the organization and control of financing agencies. Under the new act central co-operative banks as federations of primary agricultural societies were established in all important towns and ports. In 1918, the Bengal Provincial Co-operative Federation was set up at Calcutta. In 1922, it was renamed the Provincial Co-operative Bank. Under the India Act of 1919, co-operatives as a sector were made a provincial subject. As a result, the co-operative movement gained great momentum in the 1920s. The total number of rural co-operatives in Bengal in 1906-07 was 222. By 1928, the number rose to 19,742 including 113 central cooperative banks. Then came the crash in 1929. The worldwide slump affected Bengal too. Almost all the co-operative societies reported large-scale default and crises in their management. While creditors failed to clear their dues, the depositors ran to the co-operative offices to withdraw their money. The co-operative movement received another jerk under the operation of the Bengal Agricultural Debtors' Act 1935, under which debt settlement boards were established to relieve the debtors at the expense of the creditors, including the co-operative societies. The societies further suffered under the Moneylenders Act 1939, which defined co-operatives as money lending agencies and put them under a number of restrictions....
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