Co-ops crisis and solution
The economic crisis resulting from the Covid-19 pandemic and the Russia-Ukraine war have left many sectors in trouble, including the cooperatives. With the debtors defaulting on payment, the cooperatives that had invested on land and other assets before the crisis couldn’t sell the properties amid soaring inflation. With investments frozen, the cooperatives are finding it hard to repay the depositors. It will take the cooperatives a little more time to address this problem. What they should do first is push the government to implement the Cooperatives Act, 2017.
Unlike banks, we can’t rely on the debtors’ collateral, so we keep waiting for repayment. The government needs to help us out. It has formed a 11-member taskforce, and we are looking forward to their steps. Secondly, we are planning to disburse loans to cooperatives through the National Cooperative Bank Limited so as to facilitate early repayment to depositors in dire need.
The author is the Senior Vice-Chairperson at National Cooperative Federation of Nepal
