YSESF takes action against three co-ops

KATHMANDU:

Three cooperatives have faced the wrath of the Youth and Small Entrepreneurs Self-employment Fund (YSESF) for misusing credit made available by the Fund to create self-employment opportunities for jobless youths.

The YSESF took action against Chimeki Sana Kisan Agricultural Cooperative of Solukhumbu, Panchawati Herbs Production and Processing Cooperative of Jhapa, and Tinau Agricultural Multipurpose Cooperative of Palpa for either misappropriating funds or extending loans for purposes other than those approved by the Fund.

“During investigations, we found that the chairman of Chimeki Sana Kisan Agricultural Cooperative had embezzled funds extended by us. Following this, we immediately recovered Rs 613,000 from him and put him behind bars,” YSESF executive director Binod Kumar Guragain said.

Panchawati Herbs Production and Processing Cooperative, on the other hand, was found to have extended loans in areas not approved by YSESF. “The funds provided by us must be used in areas that generate employment opportunities. Since the cooperative had failed to do so we took action against it and recovered Rs 928,000,” Guragain said.

Likewise, Tinau Agricultural Multipurpose Cooperative was also found to have issued credit in areas that were not approved by us, he added. The cooperative had taken a loan of Rs 1.05 million from YSESF.

“Since the firm acknowledged its mistake and took responsibility of its action, we only issued a warning and asked it not to commit such mistakes in the future,” Guragain said.

YSESF started mobilising cooperatives since May last year to provide unsecured loans of up to Rs 200,000 to every jobless youth and group loan of up to Rs five million. Since then, over 600 cooperatives located in 73 districts, excluding Manang and Mustang, have extended around Rs 1.22 billion in loans to create 16,500 self-employment opportunities.

“Over 60 per cent of the credit extended by us has been absorbed by the agricultural sector. And the default rate is very low,” Guragain said, adding, till mid-September, only 68 cooperatives had failed to pay monthly installments on time.

One of the reasons for low default rate is effective monitoring of cooperatives that take money from YSESF, according to Guragain.

YSESF has established a monitoring committee under the president of local chamber of commerce in every district to conduct works related to monitoring and supervision of cooperatives that have acquired funds from the Fund.

“If potential threats are flagged, the committee immediately acts and takes action against cooperatives,” Guragain said.

Source: THT