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.
Chettiars 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
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.
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. Later, large numbers of the Chettiars had moved to Ceylon, Burma, Malaya and Indo-China, today’s Vietnam.
It is said that these regions were then being opened up for 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.
Chettiars successfully emerged as the principal purveyors of credit, in the process generating huge profits and sometimes amassing enormous wealth.
They established their businesses in the Singapore River area in close proximity to the trading houses and government offices. Their clients included small businesses, labourers, hawkers and plantation owners.
Those who borrowed small amounts from the Chettiars had to sign a promissory note and 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.
Chettiars generally conducted their businesses in kittangis which means “warehouse” in Tamil, and they 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.
There were other Chettiars who were agents and worked as employees for the owners of moneylending firms. They were paid a salary and bonuses, depending on the profits made by the business.
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
Today, there is a small Chettiar community in Singapore and most of its members are professionals with only a handful still involved in the moneylending business.
