Financial crises are a part of life for most people. At some stage or the other, almost everyone finds themselves struggling with new financial needs. Today, we have banks and financial institutions to lean on. But what did people do before these institutions became common? In North Malabar, they relied on each other through a unique tradition called Panappayatt, which is basically a form of crowd-funding but with a difference.
Still alive and well in Panur and surrounding areas, Panappayatt is a traditional system of raising funds through mutual assistance. It’s a heart-warming example of community spirit and trust—something we could all do with a little more of today!
When we hear the term "Panapayattu" images of currency counters or international remittance services might come to mind. But this is entirely different. Panappayatt is a form of financial aid deeply rooted in trust and neighbourly support. Think of it as a community-funded loan without the hassle of interest or formal paperwork.
When someone in the community has a pressing financial need—be it for a wedding, building a house, or even starting a new business—they host a payatt. A letter or word of mouth invites neighbours, friends, and well-wishers to the event, often held at the person’s home or a local tea shop. Snacks, tea, or sometimes an elaborate meal is served to the contributors.
Each person who attends brings a financial contribution, which is recorded in a payatt book in the presence of local dignitaries or respected elders. Importantly, the contributors don’t expect an immediate return. Instead, when the contributor themselves hosts a payatt in the future, those who previously received money come back and give more than they originally received—maintaining a cycle of generosity.
Panappayatt has been a part of Panur’s culture for over a hundred years, evolving with the times. Initially, it was primarily used for personal needs like weddings or house construction. Today, people even organise payatts for business ventures.
Social worker E. Manish shares that some payatts in recent years have raised astonishing amounts—up to ₹2 crore. Contributions vary, with some individuals donating as much as ₹2-3 lakh. However, it’s not just about the money; it’s about the sense of solidarity and shared responsibility.
Long before banks introduced microfinance, the people of North Malabar had already perfected the art of interest-free, community-driven funding. It’s essentially a no-interest loan system, with repayments made over time in small installments—or through participation in future payatts.
"In the early days, Panappayatt was mainly for weddings and house construction. Today, it’s used for everything from paying off debts to funding businesses. It’s a lifeline for many in the community," says Panoor Municipal Councillor M. Ratnakaran.
The success of Panappayatt relies on mutual trust. People repay what they owe, often adding a little extra as a token of appreciation. If someone is unable to attend a payatt, they send their contribution later. And if a family decides to end their involvement, they simply return the amount they had received, closing the loop.
Despite its enduring charm, Panappayatt faces challenges today. The younger generation seems less interested in continuing this tradition. Some see it as outdated, preferring modern banking methods instead.
"Times have changed, and so have financial needs. While Panappayatt still serves a purpose, it’s not as widespread as it used to be," adds Ratnakaran.
