Cooperatives and their Economic Importance

 Cooperatives and their Economic Importance

Cooperative

Co-operative means the group of people organized to achieve common goal through mutual assistance. In the other words, a cocoperative is an institution of the people having common objectives, profession and economic status, which collects the scattered money from the community and uses for the socio-economic development and prosperity of its members and community. International Co-operative Union has defined Co-operative as an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspiration through a jointly owned and democratically controlled enterprise.

Values of Co-operative 

• Self help 
• Self responsibility 
• Democracy 
• Equality 
• Equity 
• Solidarity 

Principles of Co-operative

• Voluntary and open membership 
• Democratic member control 
• Member economic participation 
• Autonomy and independence 
• Education, training and information 
• Cooperation among cooperatives 
• Concern for community. 

Importance of co-operative

• Collects the scattered money in the community to make capital for investment. 
• Develops the feeling “One for all and all for one” in the community. 
• Multipurpose cooperatives provide various facilities such as loan to the farmers and entrepreneurs, facility of market etc. 
• Encourages people for saving and to be economical. 
• Helps to promote the living standard of people and alleviation of poverty. 
• Helps to control unemployment. 

Provision for the establishment of co-operative

The co-operative Act 2074 has mentioned the following provisions to establish cooperative in Nepal

• Should have at least 30 members. 
• Should submit two copies of by-law and work plan. 
• Should submit the minute record of the first general meeting of the members. 
• Should submit the description of shares, personal detail, photocopy of citizenship certificate and signature of each member along with registration fee and application. 

History of Cooperatives in Nepal

The history of cooperatives can be traced back to the system of Ghuthi, Dharma Bhakari, Manka Khala, Bheja, Kulayan, Dewali, Dhikuti, Parma, etc. The formal development of cooperatives began after the establishment of Cooperative Department in 2010 B.S. The first cooperative organization of Nepal is Bakhan Credit Cooperative that was established in 2013 B.S. in Bakhanpur Village of Chitawan district. In order to institutionalize cooperatives, Cooperative Organization Act, 2016 was passed and enforced. In the same way, Cooperative Rule was made in 2018 B.S. and Cooperative Bank was established in 2020 B.S. Further, Cooperative Act was passed in 2048 B.S. It spread the wave of cooperative organizations in Nepal.

There are 34512 registered cooperatives in Nepal tilled a end of Fourteenth Plan and 63 Lakh people have become the member of cooperatives. The share of capital of all cooperatives is 63 billion. The Fifteenth Plan has the strategy to encourage cooperatives to work in productive fields and to provide financial help to the projects run by the cooperatives with the involvement of poor class people.

Problems of Cooperatives 

• The executive members are cheating the general members. 
• Most of the cooperatives have cheated the government in terms of paying tax. 
• The saving and credit cooperatives are not doing any productive work. They are taking benefit by giving less interest in deposit and taking more interest in loan. 
• Most cooperatives have invested their capital without any strong security so, their bad debt is increasing. 
• There is no proper audit of book keeping and income and expenditure. 
• A single person has become the member of many cooperatives against the principle of one person should be the member of only one cooperative. 
• The investment made by cooperatives is mostly in non-productive sector such as housing, land, vehicle, etc.