– Mohammed Atherulla Shariff
Bengaluru: Ten interest-free societies, a collective membership of 18,000 and turnover of 100 crores in the fiscal year 2023-24, is all about one dimension of the efforts in alternative banking in Karnataka. This was disclosed in a review meeting of the interest-free societies working under the aegis of Jamaat-e-Islami Hind here.
Another interesting dimension of the endeavor is the moral and social rider clause the beneficiaries need to cross over. These societies aren’t just about financial transactions; they’re also about building a community of responsible citizens. Membership criteria include beyond the standard legal requirements, embracing a holistic approach to personal conduct. Prospective members must abstain from alcoholic substances and domestic violence, prioritize their children’s education and cultivate savings habit, it was explained.
The societies at Bidar, Kalburgi, Raichur, Bellary, Ilkal, Davangere, Bhatkal, Udupi and Mangalore registered under the Karnataka Souharda Act, 1997 and Co-operative Societies Act, have left fine imprints, in the initial stage itself.
Yousuf Kanni, state secretary of the Jamaat, said, while these criteria have raised some eyebrows, we firmly believe that they contribute to strengthening the social fabric of the communities served. This blend of financial and moral considerations is unique to our societies unlike the conventional banking institutions, he added.
With a state population of approximately 6 crore, the current membership of 18,000 represents a mere fraction of Karnataka’s residents – less than 0.03%. This stark contrast highlights an enormous opportunity for growth and financial inclusion, said Yousuf.
The societies work with inclusivity policy and the membership includes non-Muslims also.
Operating under the Karnataka Sauharda Act, these societies have earned the respect of both government officials and the broader federation of societies. The interest-free model has sparked curiosity and admiration, even among seasoned banking professionals. While inaugurating a Society in Kalburgi an officer said, “I’m both surprised and delighted. After years of managing interest-based societies, I’m now inspired to establish an interest-free society myself.”
Usama Khan, CEO of Sahulat Microfinance Delhi, attended to the teething problems and concerns some of the units come across.
The state president of the Jamaat Dr Mohammed Sa’ad Belgami’s concluding remarks served as a poignant reminder of the responsibilities that lie ahead, outlining priority areas for future focus.
