Prime objective of these societies to forming cooperative credit societies is to provide loans to members at reasonable rates of interest and to develop the habit of thrift among members. They accept deposits from members and provide loans to members at reasonable rates of interest. The formalities are much simpler when compared to availing of a bank loan.
The co-operative credit societies are of two types. They are:
Agricultural credit societies are formed in villages and provide loans to agriculturists and rural artisans. Non-agricultural credit societies are formed in urban areas and provide loans to people living in urban or semi-urban areas.
Co-operative credit societies in India operate in a three tier structure. At the lowest tier are the Primary Agricultural Co-operative Credit Societies which are organized at the village level. At the second tier are the Central Co-operative Banks organized at the district level. At the uppermost tier are the Sate Co-operative banks organized at the State level.