Meghalaya’s rural population is largely unconnected to formal banking network and about 75% of the population currently without any bank account or access to banks. This means that a significant population of the state is deprived of access to financial services which are essential for enterprise promotion and overall economic development. The Integrated Village Cooperative Societies (IVCS) were created to help overcome the challenges of poor financial inclusion and access to financial services in rural Meghalaya.

These cooperative societies have been conceptualized using lessons from past attempts while also looking at successful models in other parts of the country. The IVCS are designed to be able to legally carry out financial activities and provide thrift, credit, and other financial services to the people. Further, they also provide a range of other nonfinancial services based on local demands and needs. IVCS are entirely local institutions that are managed and operated by the community.

The IVCS operates on a membership subscription basis and requires as few as 15 members to start. New members can join by purchasing shares of the IVCS as part of the subscription. The price of each share is decided by the Cooperative Society. There is no ceiling to the number of members that it can have. However, given the type and scale of activities, a membership of 300 or higher is typically required. As is with other cooperative societies, these IVCS are managed by a Managing Committee comprising male and female elected members of the cooperative. Each IVCS is strategically located within a cluster of villages to ensure maximum access to as many people and villages as possible.

The primary role of the IVCS is to provide thrift, credit and other financial services to its members. However, as stated earlier IVCS can also provide other local services including selling inputs and other essential requirements that have been sourced from outside the village; aggregation of crops/products of members with a view to market the same advantageously for improved price realization; act as service provider or medium for channelizing government schemes and services, providing facilities for storage; acting as a service provider for different entities that would like to reach the village households through the medium of the IVCS for variety of objectives such as marketing of products as well as functioning as a service agency of financial and non-financial bodies;

The society’s primary activity is thrift and credit. Thanks to its high membership, the society has been able to mobilize a share capital of approximately INR 2 lakhs. Another INR 2.5 lakhs amount was received from the government through the Meghalaya Livelihoods and Access to Market Project (M-LAMP). Using this capital, the society has disbursed loans totaling approximately INR 4 lakhs to 84 members with an average loan size of approximately INR 5,000. Additionally, members who received loans from the society were able to access higher loans from formal banks.

In terms of savings, a total of 97 accounts have been opened with the society and the total savings stands at INR 10 lakhs.

Business and Marketing

A notable highlight of this society is the approach it has adopted for business development, leveraging on key demands in the local market for creating profitable business opportunities to sustain the society. For example, through surveys, the IVCS has been able to identify that cement is in high demand locally, but that it is only available from neighboring markets at high prices. Today, the IVCS sources cement in bulk directly from the Nongpoh market (25 km away) to reduce cost and supply it locally at much lower prices than from the neighboring markets. A retail shop has also been opened by the IVCS to sell the cement.

Another key business activity of the IVCS is the aggregation and marketing of local pineapples and black pepper. Member farmers contribute land, planting material, and labour and through the IVCS, engage in finding high-value markets for marketing. This is one of the key revenue generation activities for the society and its members. To strengthen this activity, the society recently started a pineapple and black pepper nursery with a small investment of INR 30,000. This is expected to lower the cost of inputs which would help enhance profit for the IVCS and its members.