KMC cooperative crisis: Over 6,000 complaints filed amid concerns of savings mismanagement

Published On: September 7, 2023 05:45 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Sept 7: Complaints have been filed against 224 out of about 2,000 cooperatives operating within the Kathmandu Metropolitan City (KMC).

The KMC Cooperative Department has reported a staggering 6,000 complaints against these cooperatives, with depositors voicing concerns over their inability to retrieve their savings. Balram Tripathi, the department's head, disclosed that 72 cooperatives have been referred to the police for necessary action.

Within the metropolis, there are 1,953 cooperative organizations, which have undergone transfers and new registrations. Among them, there are 1,628 savings and credit cooperatives, 264 multi-purpose cooperatives, three labor cooperatives, 15 agricultural cooperatives, 13 consumer cooperatives, three skill cooperatives, and two education cooperatives.

On July 16, 2017, the Government of Nepal resolved to transfer the responsibilities of the then Divisional Cooperative Office to the government. In line with this decision, activities that were previously overseen by the Division Cooperative Office were shifted to the metropolis on July 17, 2018. Interestingly, the metropolis had already enacted the Cooperative Act in 2017, even before the handover.

Among the cooperatives, 1,603 have received usernames and passwords for the Cooperative and Poverty Management Information System (COPOMIS), while 955 regularly submit financial statements to the Department of Cooperatives.

As per data from the Department of Cooperatives under the Ministry of Land Management, Cooperatives, and Poverty Alleviation, the country boasts 31,373 cooperative organizations, boasting a combined membership of 7,381,281 individuals. The cooperative sector has attracted a loan investment of NPR 426.25 billion with a total share capital of NPR 94.15 billion, providing employment to 93,771 individuals.

Cooperatives, traditionally established organizations designed to foster collective economic, social, and cultural development, and community advancement among like-minded individuals, have recently faced significant challenges. Issues such as corruption, internal mismanagement, lending practices favoring insiders, channeling loans into consumption rather than production, and an influx of members solely seeking loans for personal gain have contributed to the current crisis in the cooperative sector.