Q.Explain the principle of 'Member Economic Participation'.

This third ICA principle deals with how members finance their society and how its surplus is treated.

Member Economic Participation is the third principle of co-operation. It states that members contribute equitably to, and democratically control, the capital of their co-operative, and that they decide together how any surplus is used.

The principle covers three linked ideas:

1. Members provide the capital. The society's capital comes mainly from its own members — through share capital, deposits and savings. Because members finance the society, they own and control it, and at least part of that capital is the common property of the co-operative.
2. Limited return on capital. Any return paid on the capital members subscribe as a condition of membership is limited. Capital is treated as a servant of the society, not its master: a co-operative exists to serve its members, not to reward investment with unlimited profit. This deliberately keeps the profit motive in check.
3. Democratic use of surplus. Any surplus (income over expenditure) is used as members democratically decide — for example, to develop the society by building reserves (part of which is indivisible), to benefit members in proportion to their transactions with the society (a patronage bonus, based on how much a member used its services rather than how many shares they hold), and to support other member-approved activities. …