Throughout the South or developing world, the concept and strategy of cooperatives has assumed a significant role in rural development policies and plans. Cooperatives are seen as more effective mechanisms for reaching the poor and marginalized sectors of society including the poor peasantry. In Thailand, cooperatives have been integrated in various national development plans in an effort by the government to meet the basic needs of the rural poor. Hence, although a major thrust of Thai development has been towards the modernization paradigm. cooperatives have provided opportunities for the poor people to develop greater self reliance and economic progress.This case study is an in-depth examination of a Group for Production Credit cooperative (GPC) in a rural village of a northeastern Mukdaharn province of Thailand; GPCs have been considered in official circles as a successful exemplar of cooperative development. The study specifically investigates how the GPC of Ban Boa started initially and has developed, the positive and negative factors affecting its development, the GPCs current and potential problems, the beneficiaries of the GPC, and the role or peoples participation in small scale cooperatives.Document analysis, participant observation and unstructured interviews were the main methods for data collection of this study which was based on a three months period of data collection. All together 42 informants were interviewed, 32 of whom are members of the GPC.The findings reveal that the GPC in Ban Boa was initiated by government officials as a regular rural development program of the Thai government to try to redress the problems of poverty and simultaneously improve the standard of living of rural people. It has become a real financial institution for the community since it offers a variety of convenient and needed services. However, the operation of the GPC also resulted in more small fractions in the community. The study found that the better-off members appeared to benefit more from the GPC than the poor ones.Several social and economic factors were found in the study to have contributed to the development of the GPC. A first factor was the remarkable leadership and untiring efforts of its leaders and the technical supports from involved government officials. Second, locally mobilized financial resource and government funding were crucial in the progress of the GPC program. Many problems occurring during the development phase were successfully solved by the GPC leaders. With regard to the future of the GPC, it is presently facing new kinds of problems that can undermine its sustainability.Finally, critical analysis of the data reveals that the GPC of Ban Boa, as a small scale cooperative, is still largely based on the Basic Needs paradigm rather than the critical paradigm. It only responds to the member needs without helping them to comprehend the existing structural causes of their poverty. Moreover, the practice of the GPC has minimally corresponded to the universal cooperative principles without which a cooperative cannot become a strong peoples organization. The study offers recommendations for both the Ban Boa GPC and the Community Development Department, as well as suggestions for future research on small-scale cooperatives.