University of Michigan in 2013 undertook a study based on Bulanda Urban Credit Cooperative Society Limited (BUCCS) located in Maharashtra, India. The study, which took six months, interviewed 25,000 people. It revealed that per capita income of members of the cooperative was twice the per capita income of India. Members spoke of their improved living standards and quality of life, along with good education outcomes for their children. There was marked improvement in living standards of low-income marginalized groups.In 1986, with just INRs 12,000 and 76 members, Radheshyam Devkishanji Candak had founded this financial cooperative. At present the organization boasts 750,000 members and around 6,000 employees. BUCCS is indirectly serving five million people with its capital of more than INRs 750 million. The turnover is managed directly by members through its 360 branches. BUCCS is the reason for positive changes in the socio-economically backward communities of the Buldana region, who are enjoying better education, health and infrastructure outcomes.
Along with financial services, the organization invested in water ATMs to arrange for easily accessible pure drinking water for rural communities. There are now 100 water ATMs operating in different villages. And there are 21 schools operated by the cooperative. Different loan products based on farmer requirement has been developed and 350 warehouses secure farmer's harvest and increase their bargaining power. The organization plays the role of a consultant, surveys market prices and advices farmers on selling their harvest for a profit. Likewise it owns textile factories, water plants, hotels and five residential projects. The organization has thus far constructed 75 kilometers of roads with the license to collect road tax for 25 years. It also built an international convention center in Shirdi, a popular religious destination. Programs on waste management and cleaning are carried out in coordination with local authorities, which can be replicated in Nepal as well.
Buldana's success is based on the mixture of rock-solid management and effective implementation of intended business plans. The management is handled by young Sukesh Zamwar, who is an orthopedic surgeon educated in Germany. He left his job as a medical doctor to move to a village, promoting cooperatives as a medium for rural development. He says "every innovation in the world is happened to fulfill the needs of the 10 percent and not for the 90 percent of the people who actually may need ideas to bring them out of poverty. Every innovation shaped by Buldana is focused on the need of rural population and their development".
The mantras of Buldana's success are effective management, new technology, trustworthiness, commitment and dedication to positive social change.
There are many examples of development through cooperatives and the impact of these organizations on social development is large. India's Amul (Anan Milk United Limited promoted by the Gujarat State Cooperative Milk Federation), which was started in 1946 with small deposit of 247 liters of milk and now collects millions of liters in a day, is one of the largest dairy products producing cooperatives in the world. The cooperative now does business of more than Rs 20,000 crores a year. IFFCO (Indian Farmers Fertilizers Cooperative) is another big cooperative, involved in production and distribution of fertilizers in India. Cooperatives have contributed massively to development of countries like the United Kingdom, Japan, Canada, Australia and Germany.
Amongst the best financial institutions in the world are Netherland's Rabo bank and Canada's Desjardin, one of the biggest financial groups operated through cooperative. According to research conducted by Corporate Night, this is the world's second largest stable and reliable financial cooperative. Almost seven million people transact daily with the cooperative through its 45,000 employees. In Kenya approximately the livelihood of 63 percent people is from the cooperative sector. Around 91 percent farmers in Japan are affiliated with agro cooperatives. There are many more examples of development with cooperative principles. Following these examples, Nepal can also benefit.
It's been almost six decades for the cooperative movement in Nepal. Within this period, cooperatives have contributed in the field of financial reach, literacy, capital generation, leadership development, social capital creation and social and economic empowerment. But the concept of cooperative movement in Nepal is limited to small retail shops and saving and credit groups. Even policymakers consider cooperatives as informal or semi-formal organizations. The various legal and administrative limits are other major reasons for cooperatives' lower than expected growth.
The cooperative movement in Nepal is unable to emulate best practices abroad and even successful Nepali cooperatives are dispirited due to administrative hassles like long registration period and unclear tax policy.
Can't we create cooperatives like BUCCS with coordination among government and cooperatives? Cooperatives blame the government for "sending them to play football with tied legs". Similarly, government's concern of "cooperatives not following the rule of the game and business ethics; instead playing political games" has also found takers. It is important that both sides improve on their deficiencies. To gain trust, cooperatives should be transparent and accountable. Likewise, government should focus on promotion of cooperative sector through legal and policy amendments.
The author is a member of International Cooperative Alliance's Asia and Pacific Committee on Youth Co-operation (ICYC)
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