Credit Co-operatives
Importance of Credit Co-operatives:
1. Provide timely flow of credit to rural areas.
2. Help balance regional development.
3. Arrest the monopoly of money lenders.
Example:
Grameen Bank in Bangladesh offers loans to the rural areas of Bangladesh. Prof. Yunus the founder of the bank found out once that a lady working for 7 days a week still remained in abject poverty.
When he looked into the mater he found out that she had taken a loan at a rate of more than 10% interest a day working out to more than 3000% a year. This is the level of exploitation in the rural areas.
Co-operative Banks
These banks are established for mobilizing small savings from poor people and advancing loans to the poor as well. They provide financial support to artisans, industrialists, professionals, workers, etc. They help free the rural villagers from the clutches of the money lenders and make available a source of credit for them.
Importance of Credit Co-operatives:
1. Provide timely flow of credit to rural areas.
2. Help balance regional development.
3. Arrest the monopoly of money lenders.
Example:
Grameen Bank in Bangladesh offers loans to the rural areas of Bangladesh. Prof. Yunus the founder of the bank found out once that a lady working for 7 days a week still remained in abject poverty.
When he looked into the mater he found out that she had taken a loan at a rate of more than 10% interest a day working out to more than 3000% a year. This is the level of exploitation in the rural areas.
Co-operative Banks
These banks are established for mobilizing small savings from poor people and advancing loans to the poor as well. They provide financial support to artisans, industrialists, professionals, workers, etc. They help free the rural villagers from the clutches of the money lenders and make available a source of credit for them.