By Gabriel Chen

CO-OPERATIVES are a cornerstone of Singapore's racial harmony and its nation-building efforts, and serve their members' social and economic needs in both good and bad times.

That was the key message Mr S. Iswaran, Senior Minister of State for Trade & Industry and Education, wanted to drive home in a speech marking the Singapore National Co-operative Federation's 28th anniversary last night.

Mr Iswaran said that over the last decade or so, co-ops have encountered some major economic challenges, including the 1997 Asian financial crisis, the 2000 dot.com bust and the Sars crisis in 2003.

'They've overcome these adversities and emerged stronger,' said Mr Iswaran, who was speaking at The Grassroots Club in Ang Mo Kio.

Co-ops are businesses with a social mission, owned and controlled by members. They were introduced in the early 20th century as thrift and loan societies to counter post-World War I inflation, when illegal moneylending was rampant and financial institutions catered only to wealthy customers.

Now there are 88 registered co-ops with a total of more than one million members. The largest in terms of membership include TCC, which counts among its members taxi drivers and postal workers, and the NTUC family of co-ops.

Co-ops often pay annual dividends to members, offer education and home loans, take on community projects and help out in times of crisis.

Mr Iswaran's speech comes on the heels of a recent address by United Nations Secretary-General Ban Ki Moon urging governments to adopt policies that support the establishment and development of co-ops.

In Singapore, some credit co-ops have been lending when banks are unwilling or unable to grant people a line of credit. TCC is getting about 10 calls a day compared with about two or three a day last year.

'The calls are desperate calls, and we're stringent about the loans we give out as we also have to take care of our members' assets. Nevertheless, we're more relaxed than banks when it comes to lending to low-income people,' TCC chairman R. Theyvendran told The Straits Times.

He said that interest on its loans stands at 6 per cent a year. Personal credit lines provided by banks usually charge interest of 16 to 18 per cent a year on the amount borrowed.

This article was first published in The Straits Times.