Features of a Cooperative Society is a type of business organization in which persons engaged in the same trade, business, or occupation come together to gain economic benefits. Why banks or other financial institutions are not encouraged to lend to low-income people? Usually, every bank has a lending policy, but they are not motivated to lend where the chances of getting money back are low. Banks do not want to take the risk of lending money to poor and landless people as they do not have specific assets or sources as collateral. This population is left behind in a "vicious cycle of poverty".
Microfinance organizations work to bring these backward people into the mainstream. It can be non-profit or for-profit. The main objective of a cooperative society is to improve the economic condition of the members. It promotes cooperation, equality, and brotherhood among the members.
Characteristics of Cooperative Societies:
Voluntary Membership: Membership in cooperative societies is voluntary.
Democratic Management: Cooperative societies are managed democratically.
Economic participation: The members of the cooperative society participate in the profits and losses of its activities.
Social Responsibility: A cooperative society works for the welfare of its members as well as the society.
Features of a Cooperative Society
Producer Cooperative Societies:
These cooperative societies carry out productive activities. They are usually formed by farmers, laborers or industrialists. For example, farmers' cooperatives, weavers' cooperatives, milk producers' cooperatives, etc.
Consumer Cooperative Societies:
Consumer cooperative societies buy and sell goods and services for members. For example, ration shops, credit unions, housing cooperatives etc.
Service Cooperative Societies:
Service Cooperative Societies provide a variety of services to members. For example, insurance cooperatives, credit cooperatives, transport cooperatives, etc.
Multipurpose Cooperative Societies:
Multipurpose Cooperative Societies carry out multiple types of activities. For example, Grameen Bank, Farmers Development Cooperative, Women Cooperative, etc.
How Cooperative Societies Work?
Co-operative societies generally work in the following manner:
Membership: Membership in cooperative societies is voluntary. One has to deposit a certain amount of money for membership.
Intrinsic Values: The following intrinsic values are followed in running the activities of Cooperative Societies:
Co-operation: Members of cooperative societies cooperate.
Equality: Members of cooperative societies are equal to each other.
Fraternity: There is a sense of brotherhood among the members of a cooperative society.
Democratic Management: Cooperative societies are managed democratically. Each member of the cooperative society has voting rights.
Economic participation: The members of the cooperative society participate in the profits and losses of its activities.
The importance of cooperative societies is immense. They play an important role in improving the economic condition of the members, creating employment, poverty alleviation, rural development, etc. For all these MFIs or Micro microfinance institutions, we have brought the MicroFinance Management System BD - MFMSBD software. Which will work as a helper in identifying the microcredit of your organization properly and accurately.
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