Mutual benefit

We have seen a couple of institutions similar to The Triplicane Permanent Fund Limited earlier - in Mylapore and in Purasawalkam. Those are much older; in fact, the TPFL is still in its 'nervous nineties', having been set up only in 1926. It is not even the oldest in Triplicane; that place would probably go to the SMSO Permanent Nidhi Ltd, which is in its 136th year. And that is much bigger in terms of its book size as well.

The TPFL is a very modest institution - its business volume would have been less than Rs.100 crores in the last year. Though it has only six branches, they are well distributed across the city; and hopefully, they would cover all the existing members of the fund. Intra-city migration would have seen a large number of Triplicane-ites moving to other parts of Chennai, but will continue to remain members of this mutual-benefit society.

And that is also the reason why this firm, despite being headquartered in Triplicane, does not have anyone from that locality in its management team!

Investment Option

The names are meant to inspire trust. Surely, when you see names that have words like 'Benefit', 'Nidhi' (meaning treasure) or 'Permanent' in them, you feel a warmth, imagining these venerable organizations working hard to make sure your money grows. The premise behind all these organizations is simple enough; the trust that folks you see every day, who live in the same locality, will not indulge in trapeze acts with the money you've given them. You believe they will invest it prudently and will share their profits with you. Someone once said there were about 200 such organizations in Chennai; some of the more high profile among them, like the Royapettah Benefit Fund and the Alwarpet Benefit Fund strayed from the straight and narrow and went belly-up about 10 years ago.

Since then, the surviving Nidhis have been very low profile. It is partly due to some fairly severe restrictions imposed on them by the government, which hampered their ability to leverage funds and also forced them to provision for overdue loans much the same way that banks had to, while restricting their operations to only specific areas within the city. With such difficult conditions imposed on them, it is a wonder that the entire business model did not collapse.

The Mylapore Hindu Permanent Fund has been in the nidhi business for over 130 years now. With so much of chaos facing its larger cousins, these organizations must be feeling glad that they've been under so much of regulation for the last few years that there is almost no chance of them failing!