Solve Cooperatives Issues

Bini Dahal

Economic development always remains a prime objective of every government, especially for developing countries. Nepal focusses on three main pillars of the national economy: the private sector, public sector and cooperative. While this holds true in theory, we have failed to create a strong foundation for all these three sectors to grow in a smooth manner. The cooperative sector has become a major headache for the government and the depositors with many cooperatives failing to return funds to their share members.  

A number of people have come forward sharing how they had lost their hard-earned money to cooperatives. Cooperatives have been found scamming the people by embezzling the depositors’ money. Many victims of cooperatives have taken to the street, demanding justice and support from the government. The concept of cooperatives came about to ensure banking and financial activities at the grassroots level. They emerged as an alternative to banks and financial institutions that could not reach out to everyone’s doorsteps. So, in totality cooperatives were set up to contribute to economic development by creating wealth and employment opportunities.

But today, cooperatives have deviated from their true purpose. They have turned into a medium to fulfill selfish interest of certain individuals and groups to make an easy buck. Also, cooperatives are being used as a tool to invest in real estate sector. Such unproductive in no way help in economic development. Numerous cooperatives in the country have failed to recover their investments and return savings to the people while others appear to have been established with the sole purpose of scamming people.

Amidst such a situation, the cooperative scam has taken a new turn. Allegations have being labeled against Deputy Prime Minister and Minister for Home Affairs Ravi Lamichhane as well for his alleged involvement in fraudulent activities. Currently, Nepali Congress (NC), the main opposition in federal parliament, has continued to demand that a parliamentary committee be formed to investigate the matter. But the ruling parties, including Lamichhane’s Rastriya Swatantra Party (RSP), have been adamant on this. Because of the NC’s stance, the House of Representatives has remained obstructed for the past several weeks. 

While investigations are necessary, political parties and their leaders should not forget about the pleas, needs and aspirations of the common people. It is saddening to see how opposition parties raise the matter with the intention of targeting a certain political party and its leader. They should have taken the initiative to probe the issue when they were in power. However, all the political parties must be ready to deliver justice to the victims of cooperatives by bringing the culprits to book. The practice of misusing the people’s deposits will only give rise to bad governance. So, the government needs to enforce the existing laws and policies effectively to deal with irregularities seen in the cooperative sector. Hopefully, the recently formed committee will come up with suggestions to address the problems facing the cooperative sector. 

Amidst falling public trust and confidence, the government must monitor cooperatives properly. As a positive gesture, the parliament has amended the Central Bank Act, allowing the central authority to oversee those cooperatives whose turnover is more than Rs. 500 million. This step is expected to help regulate the sector and also prevent the cooperatives from deviation. As the country is about to welcome a Nepali New Year, the government and political parties must show commitment to putting people in the centre.