Q.An employees' credit co-operative society usually recovers its loan instalments by:

An employees' credit society is confined to the staff of one workplace, which gives it a very convenient and safe way of collecting repayments.

Because the members are all employed by the same employer, the society arranges for the monthly instalment to be cut from their pay, making recovery almost automatic.

An employees' credit co-operative society is formed within a single office, factory or institution, with only its own employees as members. Its great advantage in recovery comes from this common employer.

Option-by-option analysis:

• (a) Selling the member's property — Wrong. This is the harsh method of the moneylender, not the co-operative's normal way of recovery.
• (b) Deducting them directly from the member's salary — Correct. The monthly instalment is deducted at source from the member's pay, so recovery is almost automatic and defaults are rare.
• (c) Charging compound interest each month — Wrong. Credit societies charge a fair, moderate rate; this option describes a penalty, not a method of recovery.
• (d) Asking the government to repay on the member's behalf — Wrong. Members repay their own loans; the government does not settle members' personal debts.

Do not confuse the method of recovery (salary deduction) with the interest charged. Option (c) is a distractor about interest, not about how instalments are collected.