Daily loan scheme for market vendors

For any region to experience economic growth, the market must stay active. Buying and selling must happen continuously. For that to happen, traders need money in hand to buy goods for sale, and consumers need money to purchase those goods. Understanding this basic principle of economics, the State Cooperative Department has designed a new scheme to provide vendors in local markets with daily loans at very low interest. Kerala Kaumudi had reported this the other day. Imagine a vendor receiving a Rs 1,000 loan early in the morning before the market opens. By evening, he must return Rs 1,001- just one rupee as interest. The scheme allows a maximum of Rs 50,000 per day. That means only Rs 50 as interest for a Rs 50,000 loan!

The purpose of this new scheme is not only to repair the damage caused to the cooperative sector’s reputation after massive fraud involving cooperative banks. Today, the financial needs of market vendors are controlled by private moneylenders who charge cruel interest rates. For a loan of Rs 1,000, they charge at least Rs 100 as interest! If they give Rs 900 in the morning, the vendor must return Rs 1,000 in the evening. If not, thugs will show up to threaten them, seize their money boxes, or stand guard threateningly. The new scheme aims to protect small vendors like vegetable sellers and fish vendors from these moneylenders. Using idle deposits to energise local markets is a move worth supporting.

The scheme has been given the temporary name “RECOOP.” The literal meaning is “to recover money.” The loan will be handed over to traders by a trusted individual appointed by the local cooperative bank, called a “Recooper.” The Recooper must ensure that the money is collected back with interest the same day. Since the interest amount is very small, this job should not be too difficult. However, the name “RECOOP” may need reconsideration. Instead of focusing on recovery, a name that highlights the positive act of providing money would be better, especially since the scheme is meant for small market vendors. Names like “Labha Chakra” (Wheel of Profit) or “Bhagya Chakra” (Wheel of Fortune) or any pure Malayalam name could be considered. They would be easy to say and remember.

But it is not the name that matters; it is the implementation. In previous cooperative loan scams, most “beneficiaries” were people connected to the bank’s governing body. Many did not repay even small amounts, and no one questioned them. For this scheme, the vendor’s political background, connections with the board members, or friendship with the Recooper must not influence eligibility. Most importantly, the Recoopers should not turn into fraudsters who run away with the bank’s money. If the scheme is implemented with caution and responsibility from the beginning, it can revitalise the entire cooperative sector, energise local markets, and remove private moneylenders from market areas completely. This “Market Wheel” loan scheme has the potential to bring real reform.