ABSTRACT
This chapter describes the development of kous in Japan and discusses their influence on modern financial institutions, especially the rural credit associations and the urban mujin companies. Kou is a simplified name for group savings and loan associations in Japan. During the Meiji Period several modern financial institutions were formed but informal lenders continued to provide the bulk of the financial services. Prior to the 1940s Japan had three types of institutions providing financial services in rural areas: Private banks, specialized financial institutions, and credit associations. The most important feature of the Japanese experience with the kou is how it influenced formal financial institutions that evolved to provide services for the common person. Through widespread participation in kous, most of the rural people in Japan had learned the discipline that is a prerequisite for successful financial intermediation.
