Introduction

Over the years much has been published about banking during times of crisis, yet little is known about the performance of co-operative banks during past crises. In the Netherlands, the early co-operative agricultural credit banks (boer-enleenbanken) were a response to the agricultural crisis of the late nineteenth century. These banks were founded to provide credit to farmers who had no access to credit facilities from the traditional banking sector. The Dutch boer-enleenbanken were based on the German Raiffeisen model, which proved to be popular among the rural population. They provide a good example of an institutional innovation that arose in response to a particular economic context. This chapter argues that in the Netherlands the co-operative agricultural credit banks performed better than other Dutch banks during the crisis of the 1920s and 1930s, and that their better performance can be attributed to their innovative legal structure, corporate governance, banking policy, internal control mechanisms and market conditions. The information and arguments presented here are based both on literature and archival research.

To provide some general background, the first section outlines the Dutch economy in the period 1890–1939, highlighting the developments that were most significant to co-operative agricultural credit. The chapter then addresses the development of the agricultural co-operative banks in the first half of the twentieth century, with a focus on the crisis periods.