Co-ops to be restricted from charging exorbitant interest rates

Cooperatives will now be barred from charging exorbitant interest rates on loans as the government has approved the regulations to the Cooperative Act 2017 that envisage a separate mechanism to fix the interest rate. The Cabinet last Monday approved the regulations one and a half years after the government enacted the Cooperative Act.
The cooperatives have been offering – to attract depositors – higher interest rates and charging the exorbitant interest rates on loans too as there is not restriction on the interest rate being offered by the cooperatives as of now. And also the saving and credit cooperatives in particular, have been out of regulatory radar in the absence of necessary regulations.
The regulations have been introduced to protect customers from being charged with exorbitant interest rates, according to the Department of Cooperatives. "In past years, a number of saving and credit cooperatives have embezzled money belonging to depositors who had been lured by hefty interest rates."
Oriental Cooperative – that landed in trouble – had also offered interest up to 22 per cent per annum to its depositors. It was declared problematic in 2013 after few years in operation. Oriental owes Rs 17 billion to its creditors including depositors, apartment buyers, the government, banks and financial institutions, according to the report of Problematic Cooperatives Asset Management Committee. "Under the regulation, a committee under the department will be formed to fix the reference interest rate based on the prevailing interest rate charged by the banks," the department said, adding that the committee will involve representatives from Land Management, Cooperatives and Poverty Alleviation and Finance ministries, Nepal Rastra Bank (NRB), Cooperative Development Board (CDB), National Cooperative Federation (NCF) and other concerned cooperative associations. "The committee will also assess the liquidity positions of the cooperatives while allowing them to fix the interest rates."

National Cooperative Federation Nepal and UNDP join hands to work on the SDGs

The National Cooperatives Federation Nepal (NCF) and the United Nations Development Programme (UNDP) in Nepal today signed an agreement to strengthen the role of cooperatives for the achievement of the Sustainable Development Goals (SDGs) in Province 2. The SDGs, also known as the Global Goals, are a bold, universal agreement to end poverty in all its dimensions and craft an equal, just and secure world – for the people, the planet and prosperity – by 2030.
Under the partnership between UNDP and NCF, both will collaborate to undertake joint initiatives to raise awareness on the SDGs and mobilise all level cooperatives along with other stakeholders and advocate for their contribution to the achievement of the Goals. The partnership will also explore ways to promote and maximize the contribution of cooperatives in achieving the SDGs.
“Through this partnership with National Cooperatives Federation Nepal, we ambition to mobilize the vast network of cooperative s from all across the country to localise the SDGs and contribute to their achievement," UNDP Nepal Resident Representative Renaud Meyer said after signing the agreement in Janakpur. "As important actors of the socio-economic development of Nepal, the cooperatives are also well aligned with the principles of empowerment, participation and inclusion which are at the core of the leave no one behind concept of the global goal for the advancement of SDGs," he said, calling on cooperatives in other provinces to replicate this type of partnership.
"We are committed to develop a comprehensive SDG Implementation Guidelines and continuously build capacity of the cooperatives at all levels so that they could align their activities to have a more direct and concrete contribution to the achievement of the Global  Goals,” said chairperson of NCF Nepal Keshav Prasad Badal.
As part of the agreement, NCF will start internalising the SDGs into its activities and implement concrete measures to create a positive and long lasting contribution. UNDP and NCF-N plan to collaborate in the advocacy efforts to create a conducive environment for the cooperatives to work together with provincial and local partners, including governments, civil society and the private sector for the advancement of the SDGs.

Cooperatives have Rs 302 billion saving

The cooperatives have collected savings of Rs 302 billion, according to the National Cooperative Federation of Nepal (NCFN). "A total 35,512 cooperatives operating across the country collected Rs 302 billion of savings," informed NCFN deputy manager Babul Khanal.
Addressing a two-day workshop on 'enhancing the cooperatives’ role in the national economy,' in the valley today, he said that of the total amount collected as savings, Rs 272 billion has been issued as loan investment. "The cooperative, which is one of the three pillars of the national economy, has been providing employment to more than 60,000 people," he said, adding that some 20 various types of cooperatives are affiliated to the federation and the cooperatives’ contribution to the GDP is four per cent and to the financial sector is 20 per cent. "The cooperatives have 6.3 million share-holders and of them 51 per cent are women."
Federation advisor Hari Krishna Upadhyaya, on the occasion, opined that since the cooperative is a social business it helps promote micro, medium-scale and big enterprises thereby creating employment.
Secretary at the Ministry of Land Management, Cooperative and Poverty Alleviation, Gopinath Mainali, presented a paper on 'existing legal framework for the promotion of cooperative entrepreneurship,' on the occasion, where more than 300 people associated with the cooperatives are taking part to learn on promotion of entrepreneurship through the cooperative.