Co-ops told to make investment in industries to ramp up production

Published On: September 6, 2019 12:25 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, Sept 6: Minister for Land Management, Cooperatives and Poverty Alleviation, Padma Kumari Aryal, has urged cooperatives to make investment in setting up industries to boost production.

Addressing a ceremony to mark the 9th establishment day of Nepal Society of Co-operative Journalist (CJN) on Thursday, she said that cooperatives should start at least one industry in each local unit. “Each cooperative now should make investment in industries to promote entrepreneurship. To make the country prosperous, cooperatives should make investment in a way that boosts production,” she said, adding that cooperatives should utilize the barren lands in the country to increase agro output and reduce the ballooning trade deficit.She said that the government has set reference rates for interest rate of cooperatives in consultation with the cooperative sector representatives. Stating that the government will address if there are any technical issues for the implementation of the reference rate, she said that the ceiling on lending rate will be enforced.

The statement from the minister has come in the wake of growing lobby from some cooperatives to increase the ceiling on lending rate.

The government has capped lending rate for cooperatives at 16 percent. With the enforcement of the new rule introduced by the Department of Cooperatives (DoC) from August 4, cooperatives will not be allowed to charge more than 16 percent interest rates on loans that they float to their members. Similarly, the department has also fixed the maximum interest rates spread of a cooperative at 6%. This new rule will ensure at least 10% interest on deposits for those who put their savings in cooperatives that charge the maximum 16% interest rates on their loans.

However, Keshab Prasad Badal, chairman of National Cooperative Federation, said that there are policy hurdles for establishing cooperative industries. “There is a need to amend nearly a dozen of laws to pave the way for cooperatives to set up industries. The government should take this into consideration as it is planning to amend the existing cooperatives act,” he added.Meanwhile, Sovit Thapaliya of clickmandu.com has been awarded with 'CJN National Cooperatives Journalist Award 2076'. Similarly, the organization also felicitated its outgoing president Dilli Sapkota on the occasion of its establishment day.