While the festive mood descends over Singapore during this joyous week of the Lunar New Year, here’s some food for thought – have you ever considered giving to society, and getting some of it back as well? Impossible? I don’t think so.

If you have heard the term “co-operative”, most likely you would associate NTUC with a co-operative. For most of us who have studied in a tertiary institution, we would have heard of the NUS/NTU NP/SP/TP/NYP Co-ops.

Aside from NTUC and tertiary institution co-ops, there are other co-ops as well, each with their own message to bring to society. This Singapore National Co-operative Federation video should give you a good introduction to co-ops.

Now that you know what a co-op is, let’s focus on a particular type of co-op, known as a credit co-op. In other countries, they go by the term “cooperative banking”, or credit unions, but in Singapore, it is standardized to use the term credit co-op.

Basically, a credit co-op provides unsecured credit in the form of loans to its members, and these loans have a low interest rate compared to banks, as they are often used for “personal living” uses, such as payments for a home, medical, credit distress, marriage or education. Being members of the co-op requires contribution to their pool of funds (which is accounted for), and this is used to provide credit to their own members.

The surplus funds and interests collected are redistributed back to their members in the form of interest on their account, after setting aside enough funds for reserves and expenses. This interest rate is comparable to local banks, and in some cases might be more than what you can get from a commercial bank! Members also have a say in how the co-op should be run by voting during their AGM meetings.

With that said, for those who are able, I hope you can contribute to society by being a member of a credit co-op, and donating to charities as well this New Year. I’ve recently signed up as a member of a credit co-op, and perhaps you should make it a resolution this year as well.

Have a Happy Lunar New Year!