Features of a Credit Co-operative Society

A credit co-operative society shares the general features of all co-operatives but also has some characteristics of its own that flow from its purpose of dealing in money and credit. The main features are set out below.

• Voluntary association — Membership is open and voluntary. Any competent person of small or moderate means who accepts the society's rules may join, and a member is free to leave after giving proper notice and withdrawing his shares. There is no compulsion and no discrimination on grounds of caste, creed, religion or politics.
• Separate legal status — Once registered under the co-operative law, the society becomes a distinct legal body (a body corporate). It can own property, open bank accounts, borrow, sue and be sued in its own name, quite separately from its members.
• Capital from members — The working capital is raised chiefly from the members themselves — through the purchase of shares, entrance fees, and, above all, their deposits and savings. It may be supplemented by loans from higher co-operative banks and government assistance.
• Service, not profit, is the motive — The primary aim is to serve the members by supplying cheap credit and encouraging saving, not to earn maximum profit. Any surplus that does arise is used for members' benefit and reserves.
• Democratic management — The society is managed by a managing committee elected by the members on the principle of 'one member, one vote', irrespective of the number of shares a member holds. This keeps control with the people, not with money.
• Reasonable rate of interest — It charges its borrowing members a fair, moderate rate of interest — far lower than the moneylender — and offers depositors a reasonable return, keeping a small margin to cover its costs.
• Mutual help and self-reliance — Members help one another; the savings of some become the loans of others. This builds thrift, self-reliance and a sense of collective responsibility. …