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Principles of Co-operatives

a. Democratic Management: The management is always a democracy. Members
can elect a body of persons to administer the day to day functions of the society.
b. Self help through mutual help: The objective is not maximization of profit but
to provide service to members.
c. Voluntary membership: Any member is at liberty to join or leave the cooperative
society. There are no restrictions on admission on the basis of religion or caste
or political party.
d. One man one vote: Irrespective of a member’s contribution to capital each
member is given only one vote. So there is no question of oppression of minority.
e. Distribution of surplus: The society can allocate a portion of the surplus towards
reserve and common welfare measures and distribute the rest in the form of
dividend.

The functions of financial co-operative organization are as follows :

i. It encourages saving by collecting deposits daily, weekly or as per convenience
of people.
ii. Co-operative organizations help to improve the living standard of their
members by encouraging saving and investment; these all result in to the
economic prosperity of people.
iii. It provides loan facility to its members at nominal rate of interest even without
collateral, on group guarantee basis.
iv. It collects products from various small producers and performs different
marketing activities like grading, packaging, advertising and also transportation,
warehousing and insurance of their products.
v. It helps to eliminate the middle men by purchasing various products in bulk
directly from producer or manufacturer and sells it to its members at fair price.
vi. It develops industrial and agricultural sectors especially in rural areas.
vii. It does not discriminate members on the basis of their age, caste, sex and
religion. It helps to develop the feeling of mutual help, hard work, saving, self
dependence, confidence, etc among the members.
viii. Co-operative organizations directly and indirectly generate various employment
opportunities in the society.

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