The concept of co-operative credit societies was not there a few years back. Financial assistance was given by the banks which is the traditional way of financial assistance. With the help of these newly emerged institutions lending and borrowing became easy to some extent. In the last few decades, cooperative societies have become popular among the masses of people. There are a number of Cooperative societies in India. They are controlled and owned by its members. The primary goal of establishing such kinds of societies is to provide credit at fair interest rates. They also provide advancement in the economy and social growth of the country. Co-operative societies provide the best financial assistance to their members.
What is a Co-Operative Credit Society?
When an institution is formed by a particular number of people with the common goal of providing financial assistance to themselves for the purpose of self-sufficiency, such organizations are known as Co-operative credit societies. These organizations are created by a diverse collection of people. It is a kind of institution which is governed by the members of its own members. Cooperative societies provide benefits to their members only.
There are a number of cooperative societies currently working in India. Their formation is easy in comparison to other credit institutions. They have fewer formalities comparatively. They are governed by the Co-operative Societies Act. Members of such kinds of societies have a number of benefits. Some of them are given below:
- Easy access to the credit of its members
- Low interest rates while getting credit
- Flexible repayment options are also available
- Community involvement is promoted
- Savings and investment options are there for the members of the societies
- Sharing of the risk sharing
- Easy access to education and training loans
- Support to those members who have small businesses
- Get easy government assistance
What is the Aim of Co-Operative Credit Societies?
Given below is the list of main aims of cooperative societies in India:
- They provide loans, goods, and so on at a reasonable cost to their members
- They eliminate any intermediaries by directly supplying commodities to their members. That will save their finances.
- They reduce the extra profits the middleman makes while doing business and trade.
- Deposits are accepted from their members only as profits are also offered to them.
- Co-operative societies are established to aid their members financially.
- To provide loans to its members with low interest rates
- Primarily responsible for the protection of the interests of rural consumers and producers.
Benefits of Co-Operative Credit Societies
There are a number of benefits of cooperative societies, with respect to financial assistance. These benefits can be taken by its members only. Without being a member of such societies one cannot take the benefits associated with them. Some of its benefits are given below in the table:
| Particulars | Description |
| Open Membership | Anyone can become a member of such societies as there is no barrier to becoming a member of cooperative societies. It does not even have geographical limitations. |
| Simple Formation | Cooperative societies are formed with minimal formalities and their registration procedure is very simple |
| Member Governance | Co-Operative Credit Societies are governed by their members. It is expected from these members whatever decision they are going to take regarding society it will be for the benefit of its members. |
| LLP Registration | Most Co-Operative Credit Societies register as Limited Liability Partnership firms. This form of entity provides a simple business framework while limiting owners’ liability. |
| Equality | All the members of the cooperative societies have equal rights and powers. They participate in the decision-making process of the society. They all have voting powers and decisions will be taken on the majority votes. |
| Self-sufficiency | These societies promote self sufficiency |
| Easy Credit Access | As there are fewer formalities attached one can get the loan easily from such societies. Also, it is limited to its members only, hence time to take loans is also less comparatively |
| Flexible Loan Repayment | To make repayment of loans easy and consumer-friendly cooperative societies follow flexible loan repayment methods. It will help the member while repaying the loan amount. |
| Low-interest Rates | Co-operative societies offer lower interest rates than commercial banks. They are making borrowing more affordable for members. |
| Community Involvement | Since Co-Operative Credit Societies are controlled by members of a particular community itself, lending and borrowing decisions are taken on the needs of the community. |
How To Register a Co-Operative Credit Society?
The process of registration of such societies is both online as well as offline. It is up to the choice of the applicant which method he or she wants to prefer. The Co-Operative Credit Societies can be formed under the Multi-State Co-Operative Societies Act. To register a Co-Operative Credit Society one needs to go through the process of registration given under the co-operative societies Act. On the basis of the same processor steps to register a cooperative society are given below in simple language the following documents must be provided:
- Select a unique name for the co-operative society
- Collect all the documents that are required for the registration of cooperative societies. The list of required documents to register a cooperative society is given below:
- No Objection Letter (NOC)
- List of members of the society
- Four copies of the Model by-law
- Copies of PAN Card and Aadhaar card
- Bank certificate showing the credit balance and support for the Co-Operative Credit Society
- Head office details and address
- Promoter member name
- A plan explaining how the Co-Operative Credit Society will be beneficial
- Details of the pre-registration meeting
- Prepare a file and attach all the required documents with it
- Submit the file before the registrar of the cooperative societies.
- A competent authority will examine the file
- If they find anything that is not complete or not attached to the file they will raise the query, one needs to solve that query for further process
- If they find everything all right they will register the cooperative society
Conclusion
Co-operative Credit Societies are a financial institution that provides financial assistance with many benefits to different individuals and small businesses in India. The registration process for Co-operative Credit Societies does not take much time instead it is easy and less formal. Although their registration process is quick, documentation and paperwork may be time-consuming. Authorities are very strict about the documentation. Without proper paperwork, it is not possible to get your co-operative society registration. Such kinds of societies make financial assistance easy for people. The access of such societies is limited to their members only.
