Employee Credit Cooperative Society
Employee Credit Cooperative Society is a staff welfare society that is created in most Government organizations, and public, and private organizations. Employee credit cooperative societies, as the name suggests, accept membership of only the employees of that organization. They can be the shareholders of that company. It is owned by the members. Each member has one voting share.
The basic procedures for the co-op are laid down in the company’s articles of
incorporation and bylaws.Once an employee credit cooperative society is setup, the members deposit money by way of Saving Account, Recurring or Fixed Deposits. This shared fund is available to members who want to take loan from the society. Since the aim of the society is not directed towards profit-making, the rates of interest on these loans is very nominal. The societies are usually connected to the Accounts Department of the parent company. The loan repayment schedule is an employee is shared with this department and the amount due is deducted from the salary. The recovery percentage of these loans is hence, almost always a total recovery.
Cooperatives are based on the values of self-help, self-responsibility, mutual aid, democracy, equality, equity, and solidarity. These principles are upheld while creating and running a sustainable Employee Credit Cooperative Society. There are many ways that an organization can undertake to promote the economic interest of its members. They can grant loan, provide assistance and concessions from internal and external sources.