Co-ops pour 58pc of investments in Capital

KATHMANDU, DEC 26 -

While cooperatives were originally envisaged to benefit people of rural areas, more than half of their investments have been poured into the Kathmandu valley.

As of the last fiscal year 2010-11, cooperatives invested Rs 68.5 billion in the Kathmandu valley out of their total investment of Rs 116.83 billion. Their investment in the valley amounts to 58.63 percent of their total outlay.

The Kathmandu valley consists of the most prosperous cities in the country, according to the recent Nepal Living Standard Survey report. Out of the 23,301 cooperatives in Nepal, 4,865 are based in Kathmandu.

The cooperatives in the valley are loaded with cash collected from their members, and they have also made most of their investments here. Out of the total deposits collected by cooperatives throughout the country, valley-based cooperatives accounted for 78.40 percent. Cooperatives in the valley collected Rs 91.96 billion in deposits out of the national total of Rs 117.29 billion.

Most of the valley-based cooperatives are savings and credit cooperatives, and they have an abundance of resources which ultimately benefits the city people.

The valley contains 3,906 savings and credit cooperatives out of the total 10,997 such cooperatives across the country. Valley-based cooperatives collected Rs 76.53 billion

in deposits out of the total of Rs 94.03 billion collected throughout the country.

“Many cooperatives, especially savings and credit cooperatives, were opened in the Kathmandu valley as people saw more business opportunities here,” said Bijaya Raj Ghimire, vice-president of the National Cooperatives Federation. “But cooperatives in rural areas have contributed more to the socio-economic development of the country.”

He added that cooperatives would now have to focus more on rural areas and encourage entrepreneurship in the agriculture sector to attain the goal of the cooperative movement.

Despite the concentration of one-fifth of the cooperatives in the Kathmandu valley, the others have reached villages and provided access to financial services to the people. According to the Nepal Living Standard Survey report, 53.9 percent of the population has access to cooperatives within a walking distance of 30 minutes against 39.9 percent access to commercial banks.Although Kathmandu-based cooperatives have an abundance of resources, there is also a risk to the safety of public deposits in these cooperatives, especially in savings and credit cooperatives, as they are not properly regulated.

A recent report of a high-level taskforce on cooperatives also

concluded that lax rules and regulations and structural system of the regulatory body have posed a greater risk to the safety of deposits and investments. A joint investigation of the Department of Cooperatives and Nepal Rastra Bank found several governance related problems in 10 big cooperatives in the Kathmandu valley.