Large Sized Multi-Purpose Cooperative Society: Medium Term Loan to Tribal Members (Tamil Nadu)

What is the LAMPS medium term loan to tribal members?

The medium term loan to tribal members is a credit facility of the Large Sized Multi-Purpose Cooperative Societies (LAMPS) of Tamil Nadu, which function under the Cooperation, Food and Consumer Protection Department and the Registrar of Cooperative Societies. The Tamil Nadu government scheme directory records the loan as up to Rs 60,000, given without interest, to members of the society from Scheduled Tribe communities.

LAMPS are not ordinary credit societies. They were set up as multi-purpose institutions for tribal and hill areas, combining three functions that are usually split between different agencies elsewhere: supplying credit, supplying essential commodities and agricultural inputs, and marketing minor forest produce and agricultural produce. In a hill settlement where the nearest bank branch and the nearest market may both be a long journey away, that combination is the point of the institution. Tamil Nadu runs 39 LAMPS, the largest at Jawadhu Hills with 17,631 members.

What "medium term" means here. Cooperative credit is classified by tenure. A short-term loan is tied to a crop season and repaid within the year. A medium term loan runs longer; typically over two to five years, and funds something that produces returns over more than one cycle: a pair of milch animals, a small processing implement, land improvement, a shed, or the working capital for a non-farm livelihood. The Rs 60,000 ceiling and the longer repayment period are what make this product different from the society's short-term and jewel loan facilities.

Why it is interest free. Interest-free lending to tribal members through the cooperative system is a policy concession, absorbed by the state and the cooperative structure rather than passed to the borrower. It reflects the fact that households in the hill blocks of districts such as Tiruvannamalai, Salem, the Nilgiris, Dharmapuri and Villupuram have historically been served by moneylenders at rates that consume the entire margin from a season's produce.

Who is eligible, and who is not eligible?

You are eligible if:

• You are a member of a Large Sized Multi-Purpose Cooperative Society in Tamil Nadu. Membership precedes borrowing, and joining means taking a share in the society.
• You belong to a Scheduled Tribe community and hold a community certificate issued by the Tahsildar. The interest-free concession is tied to tribal membership.
• You reside within the area of operation of the society. Each LAMPS serves a defined set of hill or tribal settlements.
• You have a genuine medium term purpose: livestock, land improvement, a small implement, a shed, or working capital for a livelihood activity, and can state it on the application.
• You are not in default to the society on an earlier loan.

You cannot apply, or are not eligible, if:

• You are not a member of the society, or your membership has lapsed for non-payment of the share amount.
• You live outside the society's area of operation. LAMPS do not lend across jurisdictions, and the nearest society to your village is the only one that can take your application.
• You cannot produce a Scheduled Tribe community certificate where the interest-free concession is being claimed on that basis.
• You are in arrears on an existing loan from the society. Fresh sanctions are normally held until the earlier account is regularised.
• You want a grant. This is a loan without interest, not a subsidy. The entire principal is repayable, and recovery is pursued under the Tamil Nadu Cooperative Societies Act.
• You are seeking a short-term crop advance, which is a different product with a different ceiling and repayment cycle.

How to apply for the LAMPS medium term loan

1. Confirm your membership at the Large Sized Multi-Purpose Cooperative Society office serving your settlement. If you are not already a member, apply for membership first and pay the share amount; the society's secretary handles this.
2. Collect the loan application form from the society office. It is free. Ask the secretary which purposes the society is currently sanctioning against, because medium term lending depends on the funds available in the year.
3. Fill in the form with the purpose, the amount sought and your repayment plan, and attach your Scheduled Tribe community certificate, identity and address proof, and land records if land is involved or being offered.
4. Arrange guarantors if the society asks for them. Medium term advances are commonly supported by one or two sureties from among the membership.
5. Submit the completed application at the society office and take an acknowledgement with a date and a serial number.
6. Let the board consider it. Loans are sanctioned by the society's elected board within the limits and lending policy approved for it. The secretary can tell you when the board next meets.
7. Complete documentation and take disbursement once sanctioned. Note the repayment schedule — the number of instalments and their due dates, on the sanction and keep a copy.
8. Repay through the society on schedule. Prompt repayment is what keeps the society's lending capacity intact for the next borrower in your settlement.

What documents are required?

How to check the status of your application

There is no online tracker for cooperative society lending in Tamil Nadu. Everything runs through the society office:

1. Ask the society secretary for the serial number of your application and the date of the board meeting at which it will be placed.
2. If the society is short of funds for medium term lending, ask when the next allocation is expected. LAMPS lending depends on the resources channelled through the district and apex tiers of the cooperative structure.
3. Where a society does not act on an application or refuses without giving a reason, approach the Deputy Registrar or Joint Registrar of Cooperative Societies for your district, who supervises the society.

Why applications get rejected

• Membership not current, or the share amount unpaid.
• No Scheduled Tribe community certificate where the interest-free rate is claimed.
• Arrears on an earlier loan from the same society.
• Purpose not covered by the society's current lending policy, or better suited to a short-term or jewel loan.
• No guarantors willing to stand, where the society requires sureties.
• Funds exhausted for the year, which is a timing problem rather than a rejection on merit. Ask to be considered in the next allocation.

What else a LAMPS can do for a tribal household

It is worth knowing the rest of what the society offers, because a loan is not always the right answer. Large Sized Multi-Purpose Cooperative Societies also supply essential commodities and agricultural inputs at the society outlet, and market minor forest produce and agricultural produce collected from member households. For many families the marketing function matters as much as the credit: selling produce through the society rather than to an intermediary in the plains is what determines whether a loan can be repaid at all. Members should also ask about the society's interest-free short-term loan of up to Rs 45,000 and its jewel loan facility, both of which are separate products with their own ceilings.

Where to raise a grievance

• Secretary and the elected board of your Large Sized Multi-Purpose Cooperative Society, first.
• Deputy Registrar or Joint Registrar of Cooperative Societies for your district, under the Cooperation, Food and Consumer Protection Department.
• Registrar of Cooperative Societies, Tamil Nadu, rcs.tn.gov.in, for matters the district office does not settle.
• District Adi Dravidar and Tribal Welfare Officer, where the grievance concerns tribal welfare more broadly rather than the society's own conduct.

Applying to a cooperative society is free. No payment should be made to any officer, board member or intermediary to obtain a sanction, and an interest-free loan on which someone demands a "commission" is not an interest-free loan.