Introduction
The Advantages of a Credit Society are many:
Ease of Formation: Though any other business or financial venture requires a lot of complications and hassles in registration and running from pillar to post with a number of documents, the law has kept the requirements for formation of a credit society very easy. It is a body that may be formed by any ten willing adults, and registration of the society is fairly simple and uncomplicated.
History
No Overwhelming Criterion for Membership: The membership of a credit society is open to everybody who wants to join it and is of age to join it. Sex, caste, religion etc. do not pose as obstacles in the way of potential members. Similarly, it is equally easy to give up the membership of a credit society when one wants to leave it.
Limited Liability: Those who have vision and create a credit society for its fulfillment do not have to fear that their personal property depends on the luck of the credit society. Liability is limited to whatever capital they have voluntarily pledged to the society, and their estate will not be liable to pay the creditors.
Democratic Management: The members of a credit society manage the affairs of the society solely among themselves without any external influence, and all of them have equal say in matters that concern them and the workings of the society. Each member has a single vote that he or she is free to exercise in any manner he or she likes, without being influenced by anyone else.
Distribution of wealth: A credit society seeks to discourage monopoly and bring about better distribution of wealth.
Mutual aid: This is the fundamental aim of any credit society, and realizing this, some members may offer to hold honorary posts to reduce management costs.
Mutual aid: This is the fundamental aim of any credit society, and realizing this, some members may offer to hold honorary posts to reduce management costs.
Features
Benefits to Society: As members of a credit society gain from the society, whole families and villages begin to see better times and prosperity. Social welfare is the by-product of credit societies. The surplus is often used to set up hospitals, maternity homes, schools etc.
Perpetuity: As a credit society is a separate entity and has existence outside of its founders of members, it continues to function in an undisturbed way even in event of death, lunacy or insolvency of members. New members continue to join and old members retire, but the credit society is not dissolved because of the above-mentioned reasons.
Government incentives: The government supports the cause of every credit society and provides loans at very low rates of interest, other assistance and some relaxation to them. This is because the economic policy of the government calls for the establishment and smooth running of credit societies. Preferential treatment is also given by way of tax reductions.
Tips and comments
Financial stability: On a nominal profit or interest, the society gives loans to its members. This helps them set up small businesses or invest in such small projects as they think fit – such as the education of a child, buying a vehicle etc.
