Thrift Cooperatives
People in the rural areas lack reliable avenues to save money. Though they need financial help, they prefer not to approach a bank because they do not understand it`s working and do not trust it. The concept of Thrift Cooperatives (TCs) is far easier for rural people to understand.
Thrift Cooperative (TC) is a voluntary association of individuals who come together to meet their savings, credit and insurance needs. This organisation provides them savings credit and insurance services through various schemes on the basis of self-help and mutual-aid and on terms and conditions decided by members themselves.
TCs are open to all eligible members of the community. Today, with rapid progress of Thrift Movement, TCs are extending services to their members on an every day basis. The savings of the members need to be used, because the interest collected on loans has to be used to pay interest on savings and also to earn surplus.
Sahavikasa began helping rural people to form TCs in Warangal and Karimnagar districts of Andhra Pradesh, from the year 1990. Women`s thrift cooperatives (WTCs) were started from 1990 and men`s thrift cooperatives(MTCs) were set up from the year 1992. Since then, CDF`s fieldwork area has spread to Medak, Rangareddy and Nalgonda districts.
Thrift cooperative Structure
In the first meeting of the thrift cooperative all members meet and lay down bylaws and business rules. They also elect committee members, who run the cooperative according to bylaws. In the beginning, usually the transactions take place one day in a month till the members and committee members become comfortable and gain confidence in the running of the cooperative.
Thrift cooperatives are managed democratically and work on the principles of cooperation, as enunciated by the International Cooperative Alliance (ICA).
Legal Status
TCs and ATCs are registered under the Andhra Pradesh Mutually Aided Cooperative Societies Act of 1995 (Macs Act of 1995)
Thrift Cooperative (TC)
| 1 | Structure | : | Association of Thrift Cooperatives (ATC) Thrift Cooperative Members |
| 2 | Size of the TC | : | 300-1000 members |
| 3 | General Body |
: | All the members of the TC |
| 4 | Joint Liability Group (JLG) |
: | Voluntarily organised 5-member group |
| 5 | Board of Directors |
: | 12 members elected by the General Body for a three year term (with staggered terms, 4 members retire every year) |
| 6 | President |
: | Elected by the Board Members from among themselves for a one year term |
| 7 | Staff |
: | At least one (Book-keeper) |
| 8 | Saving Products |
: | (a) Compulsory Thrift (b) Fixed Deposit (c) Recurring Deposit (d) Saving Account |
| 9 | Loan Products |
: | (a) Three times the Compulsory Thrift, Bonus & Abhaya Nidhi (b) 75% of Compulsory Thrift (for non-JLG members) (c) 75% of Fixed Deposit (d) 75% of Recurring Deposit |
| 10 | Insurance Products |
: | (a) Abhaya Nidhi (b) Insurance covering accidents |
| 11 | Bonus on Compulsory Thrift |
: | Annually from the surplus earned by the TC |
| 12 | Interest on Loan on |
: | Rates vary as per the financial size of the TC and interest is charged on decreasing balances
|
| 13 | Meetings |
: | (a) General Body Meeting (b) Board Meeting (c) JLG Meeting |
ASSOCIATIONS - support for better services
Associations of Thrift Cooperatives (ATCs) have been formed with the aim of bringing together the best minds in the TCs to come up with solutions, that benefit each individual member. The ATC`s main function is to simplify the functioning of the TC so that the facilities offered are more accessible and effective in meeting the needs of the members.
In an ATC, members are not individuals but thrift cooperatives. An ATC functions more or less on similar lines as a thrift cooperative. Representatives of all member cooperatives form the general body of the ATC. They, in turn elect a committee to manage the affairs of the association.
The committee of the ATC meets every month to review the progress of the member cooperatives, discuss, resolve problems, if any, review and approve the loans/assistance to member cooperatives.
Apart from the monthly committee meetings, once in six months the advisory council meeting takes place. The board members of member cooperatives review the performance of each cooperative and also discuss new strategies and schemes for the development of member cooperatives. Once in a year the general body meets, reviews, and elects members for the positions that become vacant. A convention is conducted by the ATC in which all members of the member cooperatives meet. This is intended for the members to realise their own collective financial and social strength and also to establish their identity in the community.
The services generally provided by an ATC to its member cooperatives are:
- Regular review of performance
- Provision of stationery
- Organise training to management and staff of member cooperatives
- Assist in submission of returns to department of cooperation
- Organise Abhaya Nidhi, which ensures that a cooperative, guarantors and the deceased member`s family do not suffer when a member with a loan dies.
- Organise optimum utilisation of surplus funds through providing loans to its needy member cooperatives
- Provide a platform to share experiences, learn form each other, develop strategies to overcome obstacles, develop internal control systems, provide audit services, etc
The 272 WTCs formed into 22 associations of women`s thrift cooperatives (AWTCs) and 171 MTCs formed into 15 associations of men`s thrift cooperatives (AMTCs), in all there were 37 associations of thrift cooperatives (ATCs). The membership in women`s thrift cooperatives are 93,464 and in men`s thrift coopertives are 51,934, the overall total membership is 1,45,398. (The above figures are as on 31.12.2007)
Structure of Association of Thrift Cooperatives (ATC)
| Size of the ATC | : | 10-20 TCs within a 15km radius of the location of the ATC Office. |
General Body |
: | Board Members of all members TCs |
Board of Directors |
: | Presidents of all members TCs |
President |
: | Elected by the Board Members from among themselves for a one year term |
Staff |
: | At least two (Internal Auditor and Book-keeper) |
Savings Products |
: | (a) Compulsory Thrift (b) Fixed Deposit (c) Recurring Deposit (d) Saving Account |
Loans |
: | Three times the Compulsory Thrift Three times the Abhaya Nidhi |
Meetings |
: | (a) General Body Meeting (b) Board Meetings (c) Annual Convention |
News & Events
Various forms of cooperation have existed from the very beginnings of the human race, but it was the pioneers of Rochdale, England, who worked out their aims and purposes, and commited them to paper in 1844 in a form which identified nine specific rules.