State agricultural credit in Turkey has an old and honourable history. The Agricultural Bank was established in 1888 and survived as a semi-private Bank until 1936 when it became State-owned. Credit was steadily expanded, especially after the Second World War until, in I950, T.L.400,000,000 (£50 million) credit was extended at a standard rate of six per cent (Robinson (1949) Letter 23).
When I arrived, Elbashï was already the headquarters of a Credit Co-operative which served a number of villages. This was not in fact a co-operative in any normal sense, but a local branch of the Agricultural Bank with special rules, run by an official of the Bank who lived in Elbashï. Members were compelled to offer mutual guarantees, and to contribute a small percentage of their loans, part to a fund to meet defaulting and part to establish their own share in the Co-operative. Members had the right to elect a committee, but all decisions lay in fact with the official. The villagers did not see the point of all this and regarded the small percentages as an imposition, tolerable because the Credit Co-operative, with its mutual guarantees, and its office in the village, was more generous than the old town branch of the Agricultural Bank had been. Yet in 1951-52, only I 20 households took loans, and many of these did not take all