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.
- Credit cooperative society has open membership system. Any person with a common interest can join the society and avail benefits of the services.
- These societies are easy to form as compared to the companies.
- There is a democratic system in which every member has equal right over the decision.
- The surplus is divided among the members in equally.
- The members have limited liability towards the society.
- The credit cooperative society is a separate legal entity.
- It is targeted in a limited geographical region which results in effective administration.
- Various government policies are active to promote credit cooperative societies.
- There are various tax exemptions to the societies as they are non profit organisations.
- Co operative societies are important in improving rural credit problems.
- These societies are beneficial in improving agricultural growth through credit services.
- Cooperative societies are a bridge between producers and consumers.
- 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.
- A credit cooperative society has limited membership thus a limited source of funds.
- Credit cooperative societies are dependent on government funds.
- The benefits of credit cooperative societies has not reached the weaker sections.
- Co operative societies have funds only for productive purposes and not for personal or family requirements.
- The management of a credit cooperative society may not be skilled as they are elected from the members.
- Co operative societies have a lot of legal regulations which effects its autonomy.
- The funds of society can be misused by the members of credit cooperative society.
- There is no secrecy in credit cooperative society as all members are aware of the activities.
- Credit cooperative societies have limited operations therefore not fit for large investments.
- There is no dedicated member to take responsibility of any task.
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