KATHMANDU, July 4 : The Department of Cooperatives (DoC) has announced a package for the borrowers of cooperatives easing them to pay back their outstanding dues.
Issuing a public notice on Wednesday, the sector’s regulator has offered rescheduling of loans taken by cooperative members on condition. “Those debtors who are not blacklisted must pay at least 50 percent of the interests due of their loan amount to get loan rescheduling facility for the next three months,” said Pitambar Ghimire, registrar of the DoC.
Ghimire said the department has directed the cooperatives to provide this facility to the debtors based on the necessity and demand from their members. “If the cooperatives find it necessary to write back the loan loss provision, they can maintain a separate financial account to show the amount on loan maturity deferral under their expenditure,” he added.
DoC sets a number of conditions for cooperatives seeking to mer...
The cooperatives however are barred from distributing dividends to their members and staff out of the aforementioned amounts. Likewise, the cooperatives cannot charge any additional fee to the debtors for providing facility of loan rescheduling.
At a time when a number of cooperatives have been facing problems to pay back the money of their member depositors, the DoC has come up with the provision to increase cases of loan defaulting by the debtors.
“If the money provided on loans can be recovered, it will largely relieve the cooperatives from paying back their depositors’ money,” Ghimire said.
The cases of embezzlement of the depositors’ money by cooperatives have become a burning issue in recent days. According to the government records, hundreds of cooperatives have been found misappropriating their depositors’ money worth more than Rs 200 billion. Of them, 54 big cooperatives, mainly the savings and credit cooperatives, have failed to give back Rs 160 billion to their member depositors.
The Central Investigation Bureau (CIB) of Nepal Police is currently investigating the irregularities in about a dozen cooperatives. The CIB's research has shown that most of the cooperatives have collapsed due to indiscriminate and excessive investment in unproductive sectors. It has been found that many co-operatives had given loans without collateral and many such debtors have run away.
Kashi Raj Dahal, former chairperson of the Problematic Cooperative Management Committee, said a number of cooperatives faced problems after the executives provided loans to their close family members. According to him, many cooperatives were found to have issued loans of up to Rs 5 billion without any collateral.
