“The year 2012 is the UN year of cooperatives. After a roller-coaster year for microfinance—where markets were a solution, then markets created a problem, a state reigning in the markets while being a player—it is a good time to reflect on where it started and where it thrives. We have three examples and a few thoughts. These institutions did not exist for profits, not scale, just relevance to their customers.

Sewa Bank was established in 1974. The word microfinance was not coined yet. Muhammad Yunus of the Grameen Bank was experimenting with his three-share farm and had not ventured into microcredit. More than 6,000 women collected about Rs. 70,000 to set up a cooperative that would keep their savings, lend and provide social security. It thrives and continues to serve women, with no external funding, no private equity, no professionals. Rustic women sit on the floor and conduct board meetings. The bank is profitable and most importantly relevant. It has seen a transition of leadership from Ela Bhatt; there has been a refocus on business priorities, never a crisis. They have a business of Rs. 175 crore serving about 87,000 members having more savings than loans…”

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Newslink: Year of the Cooperative, a Year for Localization