Deposits held by savings co-ops swell to Rs 115b

KATHMANDU, MAR 02 -

Deposit collection by savings and credit cooperatives rose 2.64 percent in the first half of the fiscal year despite a number of instances of them getting into trouble over bad investments and mismanagement.

According to the Department of Cooperatives ( DoC ), deposits held by savings and credit cooperatives swelled by Rs 5.36 billion to Rs 115.30 billion during the period. The total amount of deposits in all kinds of cooperatives reached Rs 143.23 billion, up Rs 3.69 billion, during the same period.

Vice-president of the National Cooperatives Federation Bijay Raj Ghimire said that deposits could have surged due to the low interest rate offered by banks.

“Deposits could have increased also due to the growing concern shown by the government towards regulating the sector,” he said.

Meanwhile, the number of cooperatives registered with the DoC also went up during the period. According to the department, 203 new cooperatives were registered during the six-month period. Among the new entrants, 50 were savings and credit cooperatives.

Ghimire said that people still considered operating cooperatives as an easy business enterprise in urban areas. “This has resulted in a notable rise in the number of cooperatives in the cities,” he added.

Similarly, the number of agriculture cooperatives surged during the review period. According to the DoC , 118 new agriculture cooperatives were registered at the department. Khem Pathak, president of the Central Agriculture Cooperatives Association, attributed the increasing number of cooperatives to the growing attraction towards farming of late. “Many people have been attracted to do vegetable and livestock farming with the help of cooperatives,” he said.

Pathak said that there was still a need to increase investments in such cooperatives as they were facing a capital crunch in rural areas. “In addition, there should be an arrangement for providing agriculture inputs like fertilisers and improved seeds to these cooperatives by the government,” he added.

Despite a growth in business in the cooperative sector, multipurpose cooperatives have seen their deposits decline by Rs 1.40 billion. Last year, multipurpose cooperatives held deposits amounting to Rs 25.72 billion.

Meanwhile, total lending by all the cooperatives also fell to Rs 124.63 billion from Rs 134.03 billion last year. Similarly, loans provided by savings and credit cooperatives dropped Rs 7.72 billion to Rs 86.91 billion during the review period.

Source: The Kathmandu Post