Ipohworld's World

Saving Yesterday For Tomorrow

Chettiar (or Chetty) is a title used by various mercantile castes and social levels in South India – especially in the state of Tamil Nadu. They claim a legendary relationship with the Hindu God Murugan; according to the legend, Murugan married Valli (who was from a tribal group), hence her tribe was later called Chettyars – in order to restore Valli’s status as a consort to a god.

Interestingly, here in Ipoh there were more than 100 Chettiar families once. They were known as the Nattukottai Chettiar. These financiers were preferred to the usual bankers back in the day. On our database we have an interesting interview with the last of the Nattukottai Chettiars in Ipoh.

Here’s a picture of what may have been the inside of a Chettiar’s ‘office’…


from the book “Legends, Lessons and Love” by Jamilah Ariffin

  1. Ipoh Remembered says:

    Dear felicia

    Thanks for the photograph. As for the e-book in the database: I read it some time ago and I think it’s a rare and extremely valuable record.


    Interestingly, here in Ipoh there were more than 100 Chettiar families once. They were known as the Nattukottai Chettiar.

    And Nattukottai comes from their ancestral habit of building fort-like extended-family homes in rural Tamil Nadu: nattu meant something like “countryside” and kottai meant “fort” (hence the Malay word kota, for example).

    And here’s another aspect of the Ipoh connection: Partly because of its wealth and its high standard of education, Ipoh in colonial times was a centre of “liberation” activity in the Chinese and the Indian communities, and the Chettiars were a key part. Government intelligence agencies kept files open on many of the wealthier Indians, Chettiars included, and carefully tracked the money that was sent back to India to fund subversive activity (namely, Gandhi’s swaraj (self-rule) movement).


    These financiers were preferred to the usual bankers back in the day.

    Preferred sometimes, but at other times the Chettiars were the only source of credit available to Indian borrowers as well as to Chinese entrepreneurs and businesses.

    For example, in the period 1870-1890, which is when Ipoh grew from a few huts into a town, Malaya was in the grip of an economic depression. The Chettiars had already built their financial networks and now began to cultivate a larger circle of relationships with (as one writer has put it) …

    Chinese tycoons, colonial officials, lawyers, sultans, penghulus, ship captains, shopkeepers, and farmers. […] By the early 1890s [the Chettiars’] entourage of credit and collateral included wages, ships, hotels, land, property, [factories], coffee bags, pearls and even bullock carts.

    While that depression did eventually end, still in the first years of the nineteenth century, as Ipoh grew by leaps and bounds, British-owned banks remained reluctant to fund local investment. There wasn’t even a single bank in town until 1902: there was only the Straits Trading Company that provided limited financial services. Elsewhere in Malaya (primarily in Singapore), one or two Chinese-owned banks had opened but even these had only limited capital to invest, so the Chettiars filled the growing need.

    And when the Great Depression hit in the late ’20s, again the banks were gun-shy and it was primarily the Chettiars who were willing to advance credit. As another study observed recently:

    [The] liberal lending practices [of the Chettiars enabled] the Chinese (from towkays with big capital to rubber smallholders) to borrow from [them] for their economic activities.

    Even without going more precisely into the details, we can say there’s a connection there that ought to be remembered — so thanks again for the post!

  2. Mano says:

    That is quite an eye opener, Ipoh Remembered!
    Looking back to my younger days, seeing the Chettiars just like in the picture in Little India, I was a little disdainful of them. I was comparing their business with the other businesses there especially with the Chinese auto spare parts shops. The Chinese provided a much needed service, money was constantly changing hands and they provided employment. They were vibrant!
    Whereas, the Chettiars seemed to be static and gloomy. I guessed then that they obviously were making an income for themselves but that was it, contributing nothing overall to the economy.
    If I may add here, I did go into business later in partnership with two of my Chinese mates and did rather well.
    Thank you, Ipoh Remembered, I now know better!

  3. Ipoh Remembered says:

    Dear Mano

    Can you say when you formed the following impression?

    Whereas, the Chettiars seemed to be static and gloomy. I guessed then that they obviously were making an income for themselves but that was it, contributing nothing overall to the economy.

    If you have not already read the ipohWorld e-book on this subject, I heartily recommend it. It provides some perspective you may find interesting. For example:

    Muthiah then explained [this was in 2005] that Chettiars have probably been in Malaya for some 150 to 200 years and in the early days business was based on honesty and trust, therefore being in the money lending trade was a pleasant role, helping people to meet their ambitions. At that time almost all the Chettiars were money lenders and only one or two, like his father were not.

    However over the years the attitudes towards the business have changed and with more people taking up the role of money lenders it is no longer a trade for peace-loving Chettiars who are not prepared to use force like so many other lenders or ‘loan sharks’ do today. It is for this reason that almost all the Chettiars have left Malaysia and either gone back to their homes or moved into other countries where money lending is still a business conducted among honest and trustworthy people.

    The first great exodus of Chettiars from Malaya came about because of the 1939/45 war when things were difficult and the money lenders suffered a lot from serious losses and so simply went back to India to live and work. Then, families like that of Annamalai Chettiear, a leading family of licensed money lenders in Ipoh, left Malaya for good in 1969, the race riots being the last straw as far as he and his family was concerned.

    The complete e-book can be perused here:



    Back to your comment:

    If I may add here, I did go into business later in partnership with two of my Chinese mates and did rather well.

    Glad to hear it!

  4. Ngai C O says:


    Google a “case study of chettiars as the major money lenders” to get a more complete picture of their operations.

  5. Mano says:

    Dear Ipoh Remembered, I would’ve been about 18 years old when I made that observation, mistakenly of course!
    Thank you to you and Ngai CO for the suggested reading material.

    • Ngai C O says:

      Hi Mano,

      People in Ipoh used to say that the chettiah would rather you not repay the loan.

      How true when one looks at the exhorbitant interests they charged after compounding.

      No wonder the long term poor folks were forever indebted to them. I heard many stories in my younger days.

      I suppose it was the dark side of chettiahs people hardly talked about.

      • Ngai C O says:


        Before I forget, there was/is another scheme that locals raised finances apart from mentioned and pawn brokers.

        I heard of the Chinese small scale co-operative similar to the pyramid scheme to raise ready cash. Say 10 people would get together and contribute 100 ringgit each per month. Lots would be drawn, the lucky one would get the first 1,000 ringgit. The process continues until it matures. It was also negotiable whereby first lucky winner could pass the money to another person needed it most.

  6. Ipoh Remembered says:

    Dear Mano

    My apologies: when I asked when you formed the impression, I meant to ask not how old you were at the time but when it was in relation to the stages laid out by the interviewee in the ipohWorld e-book. For example, he mentioned the immediate post-war period and then the riots in 1969 as both being significant times for the Chettiars. So when you were observing the community in Little India, when was that in relation to these times? (Just curious. Not important in any larger sense.)


    Dear Ngai C O

    It’s good to see your words here again. I’ve missed your voice.

    You offered this reference:

    Google a “case study of chettiars as the major money lenders” to get a more complete picture of their operations.

    I followed your suggestion and found an undated case study by Ummadevi Suppiah (who, by the way, was a co-author of one of the papers I quoted above).

    You wrote that “People in Ipoh used to say that the chettiah would rather you not repay the loan.” I see that Ms. Suppiah agrees to a certain extent:

    The Chettiar moneylenders reacted promptly when debtors failed to repay their loan installments on time by consequently determining new and higher interest rates for the unpaid balance. Chettiar moneylenders did not pressure their debtors into quickly repaying their original loan but pressured them with these rising monthly payments through compound interest charges.

    You also wrote about exorbitant interest rates, but Ms. Suppiah quotes the following:

    It is not that the maximum rate of interest prescribed for secured and unsecured debts (a provision unknown in England) does not bring in a fair return for, by and large, having regard to the market rate, the rate of interest normally charged by the Chettiars was commensurate with the risk involved and was rarely found to be so exorbitant as to justify intervention by the Courts.

    I’m not sure what to make of that, particularly in light of Ms. Suppiah’s conclusion:

    The Chettiars operated a professionally organized money lending business in British Malaya characterized by appropriate money management operations; steady sources of capital, specific types of investments; fixed rates of interest, and the establishment of the banks. Their success can also be attributed to their sound business ethics.

    Also in Ms. Suppiah’s conclusion:

    The Chettiar moneylenders had taken many financial risks, which the British had not been willing to take. It had been their credits which financed opening thick jungles for cultivation and land development, allowed many Chinese entrepreneurs venture into the tin and rubber industries, and offered early forms of micro-financing understood today to be crucial for the rural development and from which thousands of smallholders benefitted.

    Which is consistent with my impression as well.

    Thanks again!

    • Ngai C O says:

      Hi Ipoh Remembered,

      Thanks for filling in the dots and dashes.

      Because I skimmed through the information I must have missed the connections.

  7. Mano says:

    Dear Ipoh Remembered,
    My apologies too for misunderstanding your query.
    It would’ve been the mid 70’s then. Perhaps even earlier.

    Hi Ngai CO,
    The scheme you mention was also quite popular with the Indian community as well. It was known as ‘kootoo’.
    Actually, the organiser collects the first round of the total $1000 (of which $100 is supposedly his/her own). Subsequently, the remaining players bid for the $1000 each month. For instance, if someone bid $200 for the $1000 the following month, that $200 is then divided equally amoungst the 10 players (including the bidder). Meaning each player has only to pay $80 for that month.
    Of course, trust was paramount. I recall reading in the newspapers where the ‘organiser’ had absconded with large amounts of money!
    Also, the scheme was deemed a failure when the players are all well to do. When there is no need, there is no bid and therefore no dividends!

    • Ngai C O says:

      Hi Mano,

      Thanks for jogging my memory that it is called “kootoo”

      In Cantonese, it is roughly known as “chap wooi” as in “picking a collective”. Collective meaning a group getting together like an association and picking meaning in this case drawing lots.

      Correct me if I am wrong. As you say, it is based on trust. It has been known for the first person to do a runner. This person will be condemned for life for breaching the contract.

  8. Ipoh Remembered says:

    Dear Mano

    It would’ve been the mid 70′s then. Perhaps even earlier.

    So if it was after 1969, then, according to the person interviewed for the ipohWorld e-book, it might have been after the hey-day of the Chettiars. Perhaps the community was less “static and gloomy” before that? I don’t know, of course, but I’m grateful for your perspective. Thanks.

    And to Ngai C O as well: Thanks for bringing up these “alternative financing” schemes. Today with other options available and more government regulation, I wonder if they are still in use.

    • ika says:

      I was the person who conducted the interview along with someone to record exactly what was said. This was the last working Chettiar in Ipoh and he was a very lonely man simply staying on to manage his properties and complete various outstanding transactions. Other Chettiars still live here but they are not active in business.

      As far as I know the subject o the interview, Muthiah Chettiar, has now returned to India.

      Early last year or maybe in late 2016 we were invited to view an original Chettiar house with a view to turning it into a museum. It is a great piece of history as all the decor is original. There is a caretaker but the owners live in India. The roof is leaking and some damage has started at the rear of the building.

      We gave them an :order of cost” to turn it into a museum and aa very cheap price to repair the roof with original tiles as a way of gaining their confidence. They never had the courtesy to reply.

      No oybt the building continues to rot!

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