Advantages of a Credit Co-operative Society

Credit co-operative societies have brought real benefits to the small saver and small borrower, to the rural economy, and to society at large. Their chief advantages are:

• Cheap and easy credit — Members obtain loans at a reasonable rate of interest and on simple terms, without the heavy formalities and security that commercial banks demand.
• Freedom from the moneylender — The greatest single benefit is the release of the poor, especially farmers, from the exploitation of the private moneylender and the debt-trap he creates.
• Encouragement of saving (thrift) — By requiring regular deposits and rewarding them with interest, the society builds the saving habit and turns small idle sums into a useful common fund.
• Promotion of self-help and self-reliance — Members learn to solve their own credit problems collectively, which develops confidence, responsibility and a spirit of mutual co-operation.
• Simple, democratic and local — The society is run by the members themselves on 'one member, one vote', is close at hand, and understands local needs far better than a distant bank.
• Productive use of credit — Because loans are given mainly for productive purposes and their use is watched, the borrowed money tends to raise the member's income rather than be wasted.
• All-round development — By financing farming, trade and small industry, credit societies raise incomes, generate employment and contribute to the balanced development of rural and urban areas alike. …