Recently, a respected Indian Congress asked an expert committee to review and make policy recommendations on cooperative financial institutions in India (CFIs), which includes organizations such as credit unions and cooperative banks. One member, Mohan R. Narayan, senior economist at the prestigious University of India, was delighted with the work, it was an opportunity to help millions of the rural poor and have a positive impact on the country. Some poor farmers deeply in debt to usurers, were presented to resort to suicide when faced with drought or other disaster, and saw little reason to continue living. Well functioning CFIs, will certainly help to restore hope and raise rural incomes. But he knew that the system has a long history of over-regulation, financial weakness and corruption. The creation of effective and clear strategy is not an easy task. Case, written at the invitation of the World Bank to study the problem of creating an inclusive financial systems in developing countries, invites students to consider 1) the roles and responsibilities of financial institutions in poverty alleviation and economic development, 2) the benefits and risks of the use of public and private agencies to assist development, and, more specifically, 3) the economy of credit cooperatives, in particular, how they function in emerging settings. "Hide
by Wei Li, Bidhan Parmar Source: Darden School of Business 16 pages. Publication Date: August 20, 2008. Prod. #: UV1106-PDF-ENG
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