THIRUVANANTHAPURAM: Despite the damning campaign that Kerala’s cooperative sector was parked with black money, which purportedly prompted the RBI to bring in restrictions on currency transfer by the cooperative bodies, a 2013 study co-authored by the central bank revealed that the cooperatives had been more responsive to the cash needs of the economically backward sections as compared to the commercial banks.
Most importantly, it pointed out that the cooperatives were seen as the most approachable. It underscores the fact that the cooperative movement is strong in Kerala and has been able to attract the rural community. Most rural poor households have an account or deposit or borrowal account in the cooperatives.
Titled ‘How the poor manage their finances; The portfolio choices of poor households in Ernakulam’ was jointly conducted by RBI Mumbai and Centre for Socioeconomic and Environmental Studies (CSES), Kochi, in April 2013. And the study that involved 107 households was mainly based on the entries made in the financial diary maintained by these households for the September 17- October 16, 2012 period.
“The cooperative societies are seen by the poor as the most approachable among the banks. Commercial banks, on the other hand, seem to suffer from a perception problem. They are not regarded as friendly neighbourhood institutions which one can rely on for meeting the financial needs,” said the study.
A never ending cycle of lending and borrowing small amounts by the households was observed during the study. Most households met the gap between income and expenditure through loans. A third of the inflows was in the form of loans and the biggest source of loans were Self-Help Groups(SHG) and the Microfinance Institutions(MFI).
Though only 17 per cent of the respondents had availed themselves of a loan from the SHGs/MFIs, 28 per cent of the loan amount was from these sources. Majority of the households depended on SHGs under Kudumbashree and one-fourth of the loans and loan amount were sourced from money lenders. Even though a mere two per cent had availed themselves of loans from the cooperatives, one-fifth of the loan amount was from these institutions, the study found.
“The report clearly shows that the common men are dependent on the cooperatives. They approach the cooperatives for their needs like small scale trade establishments, marriage and house construction. Allegations against this sector are being raised by covering up these facts,” said C N Vijayakrishnan, chairman of the Kerala Sahakarana Federation.
He further said the new generation banks alone stood to benefit from the destruction of the cooperative sector. Vijayakrishnan told Express that the report had already been handed over to Chief Minister Pinarayi Vijayan.