Abstract
This chapter takes an overview of credit co-operatives in Serbia in retrospect and prospect. It starts by examining the legal frameworks that have regulated their work, from the first Law on agricultural and handicraft co-operatives from 1898, through to the most recent Law on Banks from 2005. It moves on to consider different phases of development of credit co-operatives; before the second world war (when numbers peaked during the 1930s); during the post-war period (when the sector declined in the face of state socialism); and during the more recent period of transition (leading to the dissolution of credit co-operatives in 2005). To conclude the paper, the current situation (which places significant legal obstacles in the way of credit co-operatives) is then assessed and the possibility of the revitalization of credit co-operatives is considered. Special attention will be given to how the revitalization of credit co-operatives might play a role in the survival and effectiveness of other co-operative sectors in Serbia, particularly agriculture (since agricultural co-operatives account for 67 % of the total number of registered co-operatives in Serbia today). This analysis suggests that the situation is now critical, and an urgent review of the current position is required.
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Notes
- 1.
Article 1 Paragraph 1 Law on agricultural and handicraft cooperatives (1898).
- 2.
Article 1 Paragraph 7 Law on commercial cooperatives (1937).
- 3.
Article 1 Paragraph 6 Law on commercial cooperatives (1937).
- 4.
Following WW2 agricultural co-operatives were first organised on the Soviet kolkhoz model. However, resistance from the peasantry was strong. By 1953, the Yugoslav communist elite introduced a ‘softer’ version of the communist ideology and social system called ‘self management’ (Sljukic 2002).
- 5.
SCS can be distinguished from saving-credit cooperatives by legal status—contrary to cooperatives, SCS were not legal entities. SCS were formed by another cooperative that was usually called a “founder cooperative”. Founder cooperatives were usually agricultural cooperatives, but were sometimes also handicrafts and housing cooperatives.
- 6.
This cooperative later changed name into “Vranovo agricultural credit cooperative” and it is better known under this name.
- 7.
Although this organisation had a short cooperative life, it continued to be one of the most important financial institutions in Belgrade until the Second World War. http://www.gradnja-online.com/index.php?view=magazine_detail&type=arhitektura&id=4783
- 8.
All citations from laws are translations of M. Nikolic, co-author of this paper.
- 9.
For example, the Cooperative for Credit and Savings in Niš, after taking 15 % of any surplus for rewards for members of the committee and 3 % for clerks’ wages, paid out the rest to members as a dividend (Jovančić 1991: 62).
- 10.
Article 1 Paragraph 7 Law on commercial cooperatives (1937).
- 11.
Article 1 Paragraph 6 Law on commercial cooperatives (1937).
- 12.
Similarly, while the Preferential Agricultural Bank was established to (1) collect significant resources and to give it to agriculture, and (2) to make it possible for farmers to receive credit, not based on the mortgage of land, but on a personal guarantee, in the end these goals were quickly diminished. Increasingly, the PAB also based credit on mortgages, meaning that the money usually went to farmers with big farms. Farmers with small farms could not receive credit because they did not have enough estate for a mortgage.
- 13.
This was a specific cooperative form that existed in former Yugislavia in period 1953–1974.
- 14.
These services also built on earlier co-operative traditions of commitment to a social role. For example, many held funds both to support members through unfortunate circumstances (e.g funeral costs in case of bereavement, or medical costs in case of illness) and to help them celebrate exceptional events (e.g. when members’ children achieved something of particular note).
- 15.
Monograph “Century and a half of cooperative movement”, Co-operative Union of Yugoslavia (2005: 38).
- 16.
Article 3 Paragraph 3 Law on cooperatives (1996).
- 17.
Article 3 Paragraph 1 Law on cooperatives (1996).
- 18.
It is interesting that such an opportunity was given only to agricultural cooperatives; some claim that the same principle could have been used for other types: manufacturing, consumer, housing co-operatives, and so on (Marković 1998: 61).
- 19.
Article 2 Paragraph 3 Law on cooperatives (1996).
- 20.
Beside saving-credit cooperatives, this category included post-office savings banks, other savings banks and saving-credit organisations. Post-office savings banks were founded in 1923 as state financial institutions.
- 21.
The Union of Saving-Credit Cooperatives were formed in 1991 according to Law on cooperatives (1990) (Nikolic 2009: 148).
- 22.
Interview with Mr Pero Radović, liquidation director in Railway saving and credit cooperative, conducted in November 2009 in Belgrade.
- 23.
Article 12 Paragraph 3 Law on banks (2005).
- 24.
Article 10 Paragraph 4 Draft law on cooperatives (2002).
- 25.
Article 52 Paragraphs 2 and 3 Draft law on cooperatives (2002).
- 26.
Article 3 Paragraph 3 Draft law on agricultural cooperatives (2004).
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Simmons, R., Nikolic, M. (2016). Credit Co-operatives in Serbia: Retrospect and Prospect. In: Karafolas, S. (eds) Credit Cooperative Institutions in European Countries. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-28784-3_21
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