The Chettiars are a subgroup of the Tamil community originating from Chettinad in Tamil Nadu, India. Historically, the Chettiars are most commonly associated with the moneylending profession.
The Chettiars originated from an area known as Chettinad in Tamil Nadu, India’s southernmost state. Although popularly known as Chettys or Chettiars, this group is more formally referred to as the Nattukottai Chettiars or Nagarathars. Nattukottai means people with palatial houses in the countryside while Nagarathars refer to city dwellers, traders and temple-based people in Tamil.
In the early 19th century, the Chettiars were traders in a host of commodities, but mainly pearls and salt, got into money-lending or bazaar banking in response to the growing demand for credit, propelled by the commercialisation unleashed during British rule. By the late 19th century, lured by better prospects, large numbers of the Chettiars had moved to Ceylon, Burma, Malaya and Indo-China, today’s Vietnam. It was the most organised and unique outmigration of capital from India during the colonial period.
Unlike their, counterparts in the North, the Nattukottai Chettiars were unable to exercise effective control over the credit and commodity market.
These regions were then being opened up for intensive colonial commercialization such as rice in Burma, rubber and tin in Malaya, coffee and tea and coconut in Ceylon, leading to a heightened demand for credit. Through the complex intra-caste credit network they had developed, the Chettiars successfully emerged as the principal purveyors of credit, in the process generating huge profits and sometimes amassing enormous wealth. The major downturn in Chettiar fortunes came in the late 1920s, when the Great Depression struck.
Through the 1930s, the prices of primary products plummeted, making it difficult for producers and peasants to repay the loans taken from the Chettiars, who responded by foreclosing the collateral, the immovable assets, invariably land, thus triggering a liquidity crisis.
The first wave of Chettiar immigrants are believed to have arrived in Singapore in the 1820s. They established their businesses in the Singapore River area (notably along Chulia Street and Market Street) in close proximity to the trading houses and government offices. Their clients included small businesses, labourers, hawkers and plantation owners.
Borrowers who loaned small amounts from the Chettiars had to sign a promissory note. Those who took loans for larger amounts had to provide some form of collateral, such as jewellery or a title deed. Interest was charged on the amount borrowed and the rate of interest was listed in the promissory note.
The Chettiars generally conducted their businesses in kittangis which means “warehouse” in Tamil, which were usually shophouses. The Chettiars would set up their offices on the ground floor of a kittangi. As Chettiars usually operated individually, each had his own safe and wooden cupboards for conducting business. A Chettiar moneylender usually sat on the floor and worked from a small wooden desk. There were also no partitions to separate the various Chettiar moneylenders as they had their own designated spots for doing business.
While some of the Chettiars ran their own moneylending businesses, others were agents who worked as employees for the owners of moneylending firms. They were paid a salary and bonuses, depending on the profits made by the business. Each agent represented his employer and was only contracted for a specific period of time. Before an agent’s contract was up, the employer would send a newly appointed agent to understudy him. Once his contract had ended, an agent would seek employment with other firms.
A Chettiar’s financial training would usually start in his childhood, where he would learn the theory of banking and accounting from family members. Boys as young as nine years old were rigorously trained in mental arithmetic and even taught to do mental calculations in fractions. They would go on to serve their apprenticeship at various Chettiar firms once they reached their teens.
There is still a small Chettiar community in Singapore today. Most of its members are professionals with only a handful still involved in the moneylending business.