Cooperative credit in colonial Bengal: An exploration in development and decline, 1905–1947

The article examines the performance of cooperative credit movement in the last four decades of colonial Bengal. Despite high hopes at the beginning, the cooperative institutions proved unsustainable due to unusually high rate of loan default and consequently failed to play a role in rural wellness as promised. The article argues that the seeds of failure were ingrained in the movement as it was used as a tool to engage and contain nationalist and communist politics in the late colonial environment. The possibility of a successful experiment on the association of a global model of non-firm financial entrepreneurship with forms of local social capital that existed in Bengal was suspended by a political process which aimed at retaining the authority of the colonial state by privileging a select social group. Social capital, the cornerstone of cooperative movement, was ineffective in Bengal because it had to operate on a ground fiercely contested by political capital.