Baburam Acharya, born in Arghakhanchi District, Sandikharka -9, has devoted the last 15 years to the cooperative sector, shaping a career centered around cooperative organizations following the completion of his master's degree. Cooperative entities worldwide consistently play a crucial role in national development, influencing individuals' lifestyles significantly. Acharya's venture into the cooperative sector commenced with establishing Zest Ideology Saving and Credit Cooperative Ltd. in Maitidevi. After securing permission for expansion, a branch in New Road was established, eventually becoming the headquarters, while the original Maitidevi location transformed into an office. Presently, there is a head office in New Road, Khichapokhari, and branches in Maitidevi, Kageshori Manohara, and Suncity Kadaghari. By the end of 2079/80, the cooperative facilitated transactions exceeding 2 billion rupees. Understanding the cooperative sector's historical origins, responsibilities, and significance is crucial. Some contend that Nepal's cooperative sector has deviated, emphasizing the need for effective management and proper national guidance to avert potential economic crises. Cooperative organizations emerge as the key to addressing these challenges, underlining the possible dire consequences for the nation's overall well-being and development if the cooperative sector is neglected. Mr. Acharya shares the ups and downs of the cooperative sector and the consequences with College Readers. Excerpts:

Several years back, cooperatives were highly trusted and could generate a substantial income. However, in the present day, numerous cooperatives have ceased operations. What could be the reason behind this change?

This issue is becoming increasingly urgent. In countries like Nepal, cooperative sectors are vital, addressing economic crises and global poverty. However, the nation has granted permission for an excessive number of cooperatives, resulting in the continued operation of those led by knowledgeable experts, while well-intentioned yet inexperienced cooperatives have been forced to close. The primary cause of these closures can be traced to lax planning and policies at the national level, leading to internal problems within the cooperatives. For example, community-based cooperatives like Chandragiri, Sitapaila, Brindabasini, Nayapati, Kavre, etc., are still functional, but market-oriented ones, particularly in the banking sector, struggle to operate smoothly. Furthermore, the lack of government monitoring contributes to the shutdown of cooperatives.

Cooperatives are providing loans for non-productive purposes, posing challenges in recovering the borrowed funds. This stands as the primary factor contributing to the difficulties faced by cooperatives. What are your thoughts on this issue?

The cooperatives labeled as problematic in the market are those that collect funds from savers. Once they gather these funds, they are expected to invest them according to specific rules and regulations. Typically, cooperatives are community-oriented and aim to empower economically disadvantaged individuals providing them the required skills. Therefore, even when they borrow money from the public, they should channel their investments back into the public domain.

The abrupt withdrawal of funds by savers is the primary cause of cooperatives encountering issues. In contrast, cooperative investments tend to yield gradual benefits over time. Is there any approach to undermine or weaken cooperatives?
In practice, within cooperatives, a portion of the funds, typically around 15-20% of 1 crore, is reserved as liquidity, while the remaining amount is invested in the market. Cooperatives place a strong emphasis on being member-centered organizations, constantly striving to earn the trust of their members. In such cooperatives, members seldom need to request withdrawals because the cooperative conducts regular workshops, orientations, and programs. The real issue arises in cooperatives where trust is lacking. It is essential for cooperatives to consistently prioritize their members, ensuring that members have a genuine and transparent understanding of the cooperative's operations.

What functions should the government undertake to resolve problematic cooperatives?
This is an incredibly important question, especially in country like Nepal where cooperatives are of great significance. The existence of cooperatives is closely tied to the well-being of the nation. To address this issue, the government should begin by collecting data on the cooperatives currently operating in Nepal. It should categorize them into those facing difficulties and those performing well.

The government needs to investigate the root causes of the troubles within cooperatives, whether they stem from internal or external factors. Just because depositors may not immediately receive their funds from a cooperative doesn't necessarily mean the money is missing or nonexistent. It could be invested, held abroad, or partially utilized, but it's unlikely that 100% of the funds will be lost.

Additionally, the government should impose stricter regulations on loan issuance by cooperatives, ensuring that borrowers repay their loans on time. While some cooperatives are functioning smoothly, they often lack adequate financial reserves. Even when they maintain a liquidity margin of 25-30%, the investment environment is not conducive.

What is your perspective on the contribution of cooperatives to the personal development and advancement of individuals?
The primary goal of cooperatives is to enhance the quality of life for all citizens and bring about social transformation. In Nepal, there are numerous community-oriented cooperatives like Sahara, Bindabasini, Sanakishan, Janakalyan Cooperative, and so forth. These cooperatives operate in a unique model that differs from others, possibly due to varying concepts and mindsets between urban and rural populations. Speaking specifically about our cooperative, we have also played a significant role in uplifting the lives of impoverished individuals. However, in practice, some cooperatives have ventured into overseas loan investments.

How has Zest Ideology managed to maintain its reputation and prominence even as other cooperatives are gradually closing down?
Our team has remained consistent since the establishment of Zest Ideology. We have a clear understanding of our responsibilities and duties. Zest Ideology's primary role is to collect funds from savers and utilize those funds for their benefit. We are well aware of the challenges that cooperatives face, but we firmly believe that the cooperative sector is not inherently flawed. Our belief is that cooperatives should operate within a defined framework.

In the market, there is a shortage of funds, but we have established courses and maintained liquidity to address this issue. These courses are currently in progress. We prioritize safe investments and avoid ventures that are deemed risky. Our organization is running successfully, with positive results evident in every aspect, region, and indicator. We maintain open communication with every member, providing information and support door-to-door.

Finally, what message would you like to impart to the cooperators - both the depositors and borrowers?
To all our members who have invested in Zest Ideology, we want to reassure you that our cooperative is operating smoothly and effectively, true to the initial purpose for which it was established. Just because some other cooperatives are facing challenges doesn't mean Zest Ideology is experiencing similar issues. Cooperatives play a vital role in the development of our nation, and we are committed to operating within the framework provided by the government.

We anticipate better days ahead and pledge to work diligently to ensure the continued success of our cooperative. While Nepal has many cooperative organizations, we are proud to say that Zest Ideology is still functioning smoothly and efficiently.