Cooperatives close, leaving depositors in distress

By Our Correspondent,Bhairahawa, Jan. 2: Many co-operatives operating in Rupandehi have been closed without returning the money of the depositors. The latest deviations in cooperatives across the country have also impacted the cooperatives in Rupandehi district.

The depositors’ money is at risk because of poor regulation of the cooperatives. The management started closing the cooperatives after the savers demanded their money back. A total of 10 cooperatives operating in the district have been shut down as they failed to return the money of the depositors.

The cooperatives that could not return the customers’ savings within a year and a half closed themselves without any prior notice and none of the employees were reachable. The Shiva Shikhar Multipurpose Cooperatives at Yogikuti in Butwal was closed one and a half years ago after it was unable to return depositors money worth Rs. 30 million. Now the office of the cooperative has been removed from Yogikuti.

The depositors of cooperatives are in trouble after Shiva Shikhar Cooperatives, which produces agricultural materials and sells grocery materials, started investing daily savings of members in other businesses. This cooperative, which opened an office in Butwal three years ago, had about 1,700 members.

The multipurpose-cooperatives, including Supreme, Agantuk, Shine, Bishowbirat, Upkar, Saptadeep, Namaste, Upadesh and Sunaulo which have offices in Butwal and Bhairahawa had been shut down as they could not return the savings.

The cooperatives of Butwal have invested in micro hydro, industry, tourism and agriculture. Similarly, the cooperatives have invested in real estate and hire purchases without keeping collateral. However, there is a weak monitoring of the cooperatives by the local and provincial governments.

Bhim Tulachan, the chairman of District Saving and Credit Cooperative Union, Rupandehi, said that the cooperative invests 60 per cent of savings in business and 40 per cent in other areas such as real estate and hire purchases.

Gunakar Khanal, chief of the Cooperatives and Employment Promotion Branch of Butwal Sub-Metropolitan City, said that although there was no problem with 136 cooperatives registered in the sub-metropolis, about a dozen cooperatives registered in the federal and province have become problematic.

According to him, there are more than 215 cooperatives in Butwal, including those registered in the municipality and province. There are about 800 cooperatives in Rupandehi alone. “Around 60,000 shareholders of the Butwal Sub-Metropolitan City have invested Rs. 7.40 billion through the cooperatives,'' he said, “For the safety of money of shareholders, the discussions are held through the municipality to find solutions to problems every three months.''

Tikaram Pokharel, Vice President of the Cooperative Development Board of Lumbini Province, said that due to the lack of effective regulation at the time of registration of cooperatives in the province, cooperatives that have opened now are causing a crisis. According to him, more than 41,000 registered cooperatives are operating in Lumbini.