DoC to study status of saving and credit co-operatives

The Department of Co-operatives (DoC) is preparing to take the service of a consultancy firm to study the financial health of selected 20 big saving and credit co-operatives operating in the capital. "As we have no technical expertise, we are inviting tenders from interested firms to evaluate the financial performance of major saving and credit co-operatives soon," a senior official at the DoC told myrepublica.com on Tuesday.

The source also said the DoC would also study the contribution of those co-operatives in national income and employment generation. Maheshwar Poudel, registrar at DoC, said they were monitoring a total of 40 big co-operatives across the country, including 20 in the capital. "We have already requested the Ministry of Finance for necessary budget to mobilize teams to monitor the operation of the co-operatives," said Poudel. Poudel, however, declined to divulge further details about the fund sought for monitoring purpose.

The DoC has already issued the first-ever financial directives for co-operatives, asking the saving and credit co-operatives to limit their housing and real estate credit to 15 percent of their total loans portfolio by the end of this fiscal year. With the enforcement of the directives, the saving and credit co-operatives will have to reduce their real estate and housing loans to 10 percent and 15 percent respectively by mid-July 2010. Of the around 5,000 saving and credit co-operatives across the country, around 4,000 are concentrated in the capital alone. Over 15,000 co-operatives are operating across the country.

As per the conservative estimate, around Rs 70 billion of deposits have been mobilized by the saving and credit co-operatives and two-thirds of the amount has been invested in the housing and real estate sector. DoC officials have been complaining about the limited manpower and resources under their disposal to monitor the functioning of all co-operatives across the country. According to Poudel, 17 of the 38 districts, where co-operatives officers have been established, don't have office chiefs. A total of 203 positions, including the posts of three under-secretaries and 16 section officers, at DoC are lying vacant.

"We are facing shortage of resources and manpower. On the other hand, we are only authorized to conduct monitoring of co-operatives. We are not authorized to take action against the co-operatives that flout co-operatives norms," Poudel added.
Source:Republica