Marup- An informal micro saving system
Saving money is an important practise to ensure a financially well off future. The simple habit of regularly keeping aside a small amount of money from our income becomes useful in future whenever we have some credit need such as for bussiness, health, educations, social ceremonies etc to name a few. Saving regularly might mean that one has to cut down the unnecessary expenditure. It will also require one to be be very disciplined.
Saving can be done either at home, banks or some other financial institutions. However, one tends to be lenient when we save individually as we know that it is our personal money and can skip saving if one doesn't feel like. We can also use up the entire savings before it turns into a significant amount. But if the saving is done in groups, one tends to be more disciplined and regular in savings because of the pressure from others. So, many people do tend to save in groups because of these reasons.
In Manipur, particularly in the Imphal district, people practise saving and taking credit in groups which is known as 'Marups'. 'Marup' means friends in the local language. It is an informal saving system in which a group of people would contribute money regularly for a limited time period. It is almost similar to the ROSCA (Rotating Saving and Credit Associations) which is practised in many parts of the world- Cambodia, Indonesia, Carribean etc.
How the system works;
In every marup, there would be an agent who would be responsible for the collections of the money and delivering of the goods. Depending on the interest of the potential members, the agent would decide upon the amount of the contribution and the period of the cycle. Most of the members are her acquaintances- family members,relatives ,friends etc. Some members may have more than a share in each marup. The contribution from each share are equal. Each month one of the members would take the total contribution. The turns of the members are decided either by consent at the beginning of the cycle or by lottery each day the contributions are collected.
Type of 'marup';
In most of the marup, the contribution is done either weekly or monthly. There are also 'marup' where the contributions is done on a daily basis; but it is mostly restricted to the bussiness people-shopkeepers, vendors, hotelliers etc who earns income on daily basis.
'Marup' is done either for cash or for goods ranging from the costly traditional dress, utensils, furniture, gold, crockery items and even 'basic dowry collections' etc. In this case, the goods are usually distributed to every members at the beginning of the cycle and the credit collected in installments. The total amount that would be collected would usually be a little more amount than the market price of that thing.
If it is a cash 'marup', one of the members would take the whole contributions, but from the next month onwards till the end of the cycle, she would pay an interest along with her contributions. That interest would be paid to the next members receiving the contributions.
For instance, if 25 members make a monthly contribution of Rs 1000/- each and the one of the members'A' take the total contribution of Rs 25000/- on the first month then from the next month onwards she pays an additional amount agreed upon, which let us say is Rs 100/- in addition to her regular contributions. So, when the next member 'B' receives the amount, it is Rs 25,100/-. She too would start paying an additional Rs 100/- from the next month onwards so that the third member, 'C' receives Rs 25,200/- in her turn and so on. So that the last member would receive a total contribution of Rs 27400/-. The interest amount serves as an incentives for those members who take the contributions later on.
There is another type of 'marup' which is popularly known as 'tender marup'. This is more similar to the chit fund practised in south indian states like Kerala, Tamil Nadu. Bidding is done for the total contributions and the member who bids the lowest takes away the quoted amount. The remaining amount is shared by the other members.
'Singlen Marup' is a special kind of marup. Every household in the locality is a member. Those living in rent are excluded from the membership. A contribution of Rs 5/- or Rs 10/- is collected every month. And when there is a death in the family, the localities would provide some financial assistance from this fund.
Advantages and Disadvantages:
Apart from being a hassle free and door step delivery service, what attracts people to such type of services is that the agent, who is responsible for the service delivery , is their acquaintance and hence tends to be more reliable. Everything is tranparent and except in the lottery type 'marup' ,each members knows her turn to get the contributions so can plan accordingly.
However, there is a drawback too. Since, it is based on mutual trust it involves a lot of risk for both the agent and the members if one is careless not to check the credibility of the person. Being an agent, even if some members do not contribute in time she has to ensure that the member whose turn it is to receive the contribution receive the due amount in the stipulated time. She has to give the amount from her personal money. It is also likely that the agent might turn out to be a fraud.
Significance in the society:
It is not only the poor who practise saving through ' marup', it is equally popular among the rich people, enterpreneurs, salaried people, bussinessmen etc. The difference lies in the amount of contributions which range from Rs 10/- Rs 30,000/- in a month. It would not be wrong to say that most of the household practise this system. In fact, a person may be a member in two three different 'marup'. Its significance lies in the fact that it is the main source of credit for the social ceremonies such as marriage, birth of a child, death in the locality etc.
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