Advantages and Disadvantages of Credit Cooperative Society - VRGyani News and Media


Wednesday, November 21, 2018

Advantages and Disadvantages of Credit Cooperative Society

What is credit cooperative society?

This society is started for economic growth and social welfare of members of a society. These credit cooperative societies serve interest of members in more than one state. Credit cooperative society is formed by the group of individuals and are a contributor to development of society and country.


Benefits of Credit Cooperative Society

A credit cooperative society has many benefits for its members. Below are the advantages of a multistate credit cooperative society.


  1. Credit cooperative society has open membership system. Any person with a common interest can join the society and avail benefits of the services.

  2. These societies are easy to form as compared to the companies.

  3. There is a democratic system in which every member has equal right over the decision.

  4. The surplus is divided among the members in equally.

  5. The members have limited liability towards the society.

  6. The credit cooperative society is a separate legal entity.

  7. It is targeted in a limited geographical region which results in effective administration.

  8. Various government policies are active to promote credit cooperative societies.

  9. There are various tax exemptions to the societies as they are non profit organisations.

  10. Co operative societies are important in improving rural credit problems.

  11. These societies are beneficial in improving agricultural growth through credit services.

  12. Cooperative societies are a bridge between producers and consumers.

  13. They are beneficial in social welfare and development efforts.


Disadvantages of Credit Cooperative Society

Along with benefits, a credit cooperative society also has many disadvantages. Below are the disadvantages of a multistate credit cooperative society.


  1. A credit cooperative society has limited membership thus a limited source of funds.

  2. Credit cooperative societies are dependent on government funds.

  3. The benefits of credit cooperative societies has not reached the weaker sections.

  4. Co operative societies have funds only for productive purposes and not for personal or family requirements.

  5. The management of a credit cooperative society may not be skilled as they are elected from the members.

  6. Co operative societies have a lot of legal regulations which effects its autonomy.

  7. The funds of society can be misused by the members of credit cooperative society.

  8. There is no secrecy in credit cooperative society as all members are aware of the activities.

  9. Credit cooperative societies have limited operations therefore not fit for large investments.

  10. There is no dedicated member to take responsibility of any task.

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