Kurikalyanam: An Informal Insurance Mechanism

Abstract

The traditional practice of Kurikalyanam, deeply rooted in the Malabar region of Kerala, offers more than just an indigenous microfinance system—it reflects a way of life built on trust, mutual aid, and social cohesion. Unlike modern banking that often burdens borrowers with lifelong debt, Kurikalyanam operates on a simple yet profound principle: communal support without interest or collateral. This study thoughtfully explores how this once-thriving system, also known as Panampayattu, is now fading into obscurity. It is evident that multiple forces are at play here. On one hand, economic transitions like the expansion of formal banking, migration, and rising incomes have reduced the community's dependency on Kurikalyanam. On the other, behavioral shifts such as declining social trust, weakening interpersonal bonds, and the rise of individualism are pulling the practice further into the margins of rural life. That said, the real concern isn’t just the financial aspect—it’s the slow erosion of a community-based safety net that once empowered ordinary villagers to manage life’s major expenses without exploitation. This raises another point: could systems like Kurikalyanam be modernized and institutionalized to meet today’s economic needs while retaining their ethical core? The research, using primary data from 50 participants in Kozhikode’s Vadakara taluk and secondary sources from extensive literature, identifies both the virtues and vulnerabilities of Kurikalyanam. It suggests that reviving this tradition will require not just procedural tweaks but a broader societal shift toward cooperation and shared responsibility. In a world increasingly driven by profit margins, reintroducing such interest-free, trust-based systems might seem utopian. Yet, in my opinion, this is precisely why their regeneration is more necessary than ever.