The Kabuliwalas: Afghan moneylending and the credit cosmopolis of British India, c. 1880–1947

Abstract

Immortalised in Rabindranath Tagore’s short story ‘The Kabuliwala’, the Afghan moneylender has appeared in many studies about rural and urban India as an unwanted interloper. This article presents an alternative picture. From the late nineteenth century through the mid-twentieth century, Afghans regularly visited the financial frontiers of British India where they offered collateral-free loans with high interest rates to urban and rural communities on the fringes of respectable creditors, such as banks, cooperative societies and banking networks. More than simply predatory, Afghan moneylenders provided a micro-financial service when and where no one else would. As a result, Afghan moneylending operations, considered as a whole, provide insight into the cosmopolitan nature of credit relationships among the working poor in the colonial era and how social and cultural notions informed not only those relationships but also how the imperial government and its allies understood them. Beginning with the Great Depression, novel legal regimes emerged around the subcontinent aimed at eradicating Afghan moneylending and solving the social problems associated with it. In the process, the intrusion of the state into informal finance via regulation hampered deep historical patterns of interregional social connectivity and redefined the cosmopolitanism of credit relations in the informal sectors of the economy.