Co-op mergers fails to gain momentum in Chitwan

Published On: August 12, 2016 04:00 AM NPT By: Ramesh Kumar Paudel

CHITWAN, Aug 12: The policy of encouraging merger among cooperatives has not made much impact in the district.

The government hard introduced a policy and working procedure for merger of cooperatives two years ago. Only three cooperatives in Chitwan have undergone merger after the policy came into effect. Data shows a cooperative in Ratnanagar merged with Narayangadh based Swornalaxmi Saving and Credit Cooperative in the year the policy came into effect.

Similarly, Pabitra Saving and Credit Cooperative and Sudhar Saving and Credit Cooperative have also completed their merger. Three cooperatives involved in production and trading of medicinal herbs -- Unmukti, Dirghayu and Godawari -- have also merged to become a single cooperative.

According to Division Cooperative Office Chitwan, there are 688 cooperatives in Chitwan district.

"There are enough reasons for the cooperatives here to go for merger in line with the government's cooperatives merger policy. However, the merger has not taken place as anticipated," says Shanti Adhikari, central member of Nepal Federation of Savings and Credit Cooperative Unions Ltd (NEFSCUN).

The government has brought the merger policy to curb malpractices in the cooperative sector.

"With the objectives to increasing investment in productive sector by reducing operation cost, implement one-cooperative-one-member policy, and end various misconducts in the cooperative sector, the merger policy was formulated," Indra Dhungana, economist at the Ministry of Cooperative and Poverty Alleviation, said.

The constitution has recognized cooperative sector as one of three pillars of the country's economy.

“So, there should be strong and capable cooperatives rather than many,” added Dhungana.

However, the merger process is not as easy as it was previously thought, according to people involved in the cooperatives sector.

"We had held talks with seven cooperatives for merger. But we could pursue merger with only one," Adhikari, who is also the former chairman of Bharatpur-based Prabhat Mahila Saving and Credit Cooperative, said. "Rather than policies, differences among officials and board members of the cooperatives over issues like who would be in the board and what status will the partners will have after the merger become the main obstacle for merger,” he added.

Indraraj Jyoti Paudel, another central member of Nefscun, said that the process becomes easy if the cooperatives with similar objectives, natures and sharing the working areas pursue merger.

Chitwan districts have a total of 194,465 cooperatives members. Women make up 58 percent of the total members.

Total capital of the cooperatives in Chitwan stands at Rs 1.82 billion and they have make investment of around Rs 7 billion, data shows.

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