Cooperatives mobilizing deposits worth Rs 478 billion

Published On: January 7, 2021 08:35 AM NPT By: Republica | @RepublicaNepal

The amount accounts for 11 percent deposits with commercial banks

KATHMANDU, Jan 6: Cooperatives have been mobilizing Rs 477.96 billion deposited by their members, which accounts for more than 11 percent of the total deposits collected by the commercial banks.

According to a study report prepared by the Department of Cooperatives (DoC), the amount is collected by 29,886 cooperatives operating across the country. These cooperatives have invested Rs 426.26 billion in loans.

The cooperative sector has often been criticized for lacking effective monitoring putting into risk the large amount of money deposited by the general public. Based on the work nature and volume of annual transactions, the cooperatives are now under jurisdiction of federal, provincial and local governments.

Of the total cooperatives, 125 are under scope of the federal government, 6,002 are under provinces and 23,759 are under scope of local governments. Despite being given charge of monitoring a large number of cooperatives, local governments still lack mechanisms and resources to regulate the sector.

In addition to this, there are already a number of laws in place to keep track of the largely unregulated financial cooperatives. But the government bodies hardly have any success in implementing them effectively so far.

The DoC’s report shows that the number of primary cooperatives has reduced from more than 34,000 to less than 30,000 in the past few years as many of them remained inactive or opted for a merger. The cooperatives have been incorporating over 7.37 million members and have share capital of over Rs 94.10 billion in total.

There are 10,418 cooperatives operating in Bagmati Province, the largest of all other six provinces in the country. These cooperatives have collected deposits of Rs 214.66 billion and have provided loans worth Rs 199.86 billion.

Karnali Province has the least number of cooperatives. In the province, 1,967 cooperatives have collected deposits of Rs 8.86 billion and provided Rs 7.92 billion in loans to their members.