Dharavi was treated as criminal area and the common people of Dharavi suffered due to this nasty publicity. Several infamous persons from Mumbai city used Dharavi as hiding place and Dharavi became infamous area. This was so affected that even the employment opportunity was also denied to the educated youths of Dharavi. Dharavi people were denied every opportunity and were treated badly everywhere. Some of the youths from Dharavi formed the organization namely “Dharavi Kriti Samiti” and started agitations against the Government and this went on for some years and result of which some of the Dharavi youth got employment. Most of the Dharavi people were doing odd jobs in Dharavi and some were working as class IV workers in the Government offices and privately. Money lending was the handsome business of some people and monthly interest of 5% to 10% was charged on the money lent. The persons taking loan from the money lenders used to pay almost 80% of salary on the interest of the money lenders and this was going on years together. The youths who worked under the banner of Dharavi Kruti Samiti and few other youths of Dharavi wanted to find solution to this problem and Dharavi Sahakari Patpedhi Ltd. is the product of the same.

To solve the problem of poor people of the Dharavi and to release them from the clutches of the money lenders, the youths of the Dharavi came together and decided to solve problems of their people on their own. These youths included Mr. Ashok Devidas Khandare, Pandurang Namdeo Khandare, Maloji Ramkrishna Honkalas, Maruti Mahadeo Narayankar, Keshav Gopal Shinde, Keshav Nivruti Shinde, Machhindra Laxman Shinde, Amresh Tippaji Pol, Dattatray Hankare, Ashok Ingle and Jaganath Jadhav. These youths decided to form the Co-operative credit society for the Dharavi people and started working on the said project. This group was actively supported by other youths also. As per the norms of the co-operative law Rs. 10/- was share capital and Rs. 1/- was the entrance fee. 250 members were required for formation of the society. Some social minded people contributed handsome amount, the group itself contributed Rs. 500/- each.

However collecting 250 members was hard task as the people were not ready to believe that these youths can do this and will continue to do the same honestly. Dalit Mitra Shri. Narayan Kadam (Kemkar) the renowned social worker helped a lot in persuading the people. Ultimately the group succeeded in collecting the members and finally after lot of problems in the Government Offices finally The Dharavi Sahakari Patpedhi Ltd. was registered on 13.4.1987 with Rs. 36,000/- as paid up share capital and 250 members. Mr. Ashok Devidas Khandare was elected as the Chairman and Mr. Pandurang Namdeo Khandare was elected as Secretary of the Patpedhi. There was problem of space to start the Patpedhi and Mr. Gopal Vithoba Shinde offered Mezzanine floor of his house for the office of Patpedhi free of cost for initial period. The Patpedhi continued its office upto 1990 in the said mezzanine floor/loft. In the year 1990-91 one director Mr. Jagannath Jadhav resigned and Mr. Pradip Kadam was co-opted as director in the Patpedhi.

The year 1992 was the turning point in the history of the Patpedhi as in the year 1992 the Patpedhi purchased a hut for its own office which is now known as head office at 2/18, Gulmohamed Chawl, Sant Kakkaya Road, Dharavi. The Patpedhi got the said hut repaired to establish its office and on 4.4.1992 it was inaugurated by the then All India Secretary of Congress Mr. Sushilkumar Shinde. Till the inauguration of the office the progress of the Patpedhi was not very speedy and the turnover was around 11.00 Lakhs at the end of the 1991-92. However after inauguration of its own office the Patpedhi got speed and the turnover started increasing and at the end of 1995 the turnover was Rs. 25/- Lakhs.

During this period the Patpedhi was making good progress, however certain differences arose between the board of directors. The chairman Mr. Ashok Khandare was made to resign and Mr. Maruti Narayankar was made chairman and Mr. Maloji Honkalas became secretary from 1.2.1994. In the same year one director Mr. Dattatray Hankare shifted his residence out of Mumbai and resigned. Till then other members were interested in getting elected to the board of directors.