Century-old Indian cooperative shows how community business can thrive without member savings

Santosh Rokaya

Pune-India: A cooperative in western India has emerged as a powerful example of how community institutions can grow into sustainable business enterprises without relying on member savings, offering lessons for cooperative reforms in South Asia including Nepal.

Established in 1926 in Kashti village of Daund in Pune district, the Sahakar Maharshi Kashti Vividh Karyakari Seva Cooperative Society Ltd. has completed a 97-year journey and is now regarded as a successful model of cooperative-led local economic transformation. The institution has around 1,300 members and operates on a system that does not require compulsory savings deposits.

Instead, it promotes participation through share ownership, allowing members to buy shares ranging from INR 100 to INR 20,000. Each share is priced at INR 900, of which INR 800 is transferred to the reserve fund, strengthening the cooperative’s capital base.

The cooperative’s growth is largely driven by its diversified commercial structure. It currently runs 13 operational divisions that include fertilizer and agricultural input supply, farm machinery services, consumer retail outlets, saree and clothing departments, household appliances, medical supplies, pesticide and seed distribution, and other essential services.

In addition, it operates departmental stores that promote local production and consumption, employing about 50 workers. This multi-sector approach has enabled the cooperative to generate steady income rather than depend only on financial transactions.

The institution has also expanded its commercial partnerships. In collaboration with a local food industry, Katwal Foods, it distributes sweets, soft drinks, and mineral water, creating an additional revenue stream while strengthening local supply chains.

At the same time, it continues to support agriculture directly by providing seasonal loans of up to INR 70,000 to member farmers, particularly for sugarcane cultivation. This credit support has helped raise farm productivity and improve household income stability in the area.

Financially, the cooperative remains strong. It has a total share capital of about INR 12 million and an annual turnover reaching roughly INR 700 million.

It follows a transparent accounting structure in which each department is audited separately before consolidated financial statements are prepared. This system, according to the management, has helped maintain trust among members and ensure long-term institutional stability.

High dividends and national recognition

Chairman Rakesh Pachpute. said the cooperative regularly distributes attractive dividends to members. The society has distributed dividends as high as 50 percent annually in the past, while it paid 11 percent dividend in the last fiscal year.

He added that the cooperative has received recognition at national and regional levels. Notably, the government body National Cooperative Development Corporation awarded it the “Best Cooperative” title in 2007 and 2010.

According to Bajpute, the cooperative’s philosophy has been to prioritize community welfare over individual gain. He said the institution has contributed to the economic and social development of Kashti village by improving financial literacy, strengthening farm productivity, and creating employment opportunities.

A major factor behind its efficiency is that the board of directors works on a voluntary basis, which reduces administrative costs and allows more profits to be returned to members.

Across India, agricultural cooperatives have evolved into key pillars of rural economic systems rather than remaining simple savings-and-credit institutions. In states such as Maharashtra, Gujarat, Kerala, Karnataka, and Uttar Pradesh, cooperatives support farmers across the entire value chain — providing inputs, machinery, credit, procurement services, and market access.

Government agencies and financing institutions support this ecosystem by offering low-interest loans, technical assistance, and infrastructure development support, allowing cooperatives to compete with private sector companies.

Many cooperatives in India are heavily involved in sugarcane, dairy, grain, and vegetable production, with sugar cooperatives in Maharashtra particularly known for linking farmers directly to processing industries, ensuring predictable prices and stable income flows.

Analysts note that transparent governance, strong member participation, regular auditing, and consistent dividend distribution have helped maintain credibility in the sector.

Lessons for Nepal

Nepal has also seen cooperatives entering the commercial sector. For example, Shiva Shikhar Cooperative once operated retail marts in several parts of the country. However, due to lack of transparency and financial irregularities, the venture eventually collapsed.

In contrast, the Kashti cooperative has demonstrated that transparent accounting, member trust, and efficient management can transform a cooperative into a sustainable commercial enterprise.

Local residents say the cooperative has boosted village economic activity, generated employment, improved agricultural output, and provided convenient services to consumers.

After nearly a century of operation, the institution stands as a strong example that cooperatives can move beyond savings-and-credit functions and become successful community-based business enterprises — a model now studied internationally and increasingly viewed as relevant for countries like Nepal.