KATHMANDU: Chairman of the Rastriya Swatantra Party (RSP), Rabi Lamichhane and his team, led by party Vice Chairman Dr. Swarnim Wagle, met with Prime Minister Pushpa Kamal Dahal to present a detailed 16-page report on cooperatives.

The report, crafted by the economic policy department under Wagle’s guidance, identifies issues within cooperatives, their root causes, and proposes viable solutions.

The document highlights three primary factors contributing to cooperative challenges: the economic shock impacting Nepal and the global economy, political shielding against institutional mismanagement, and a lack of regulatory oversight and regulation.

In response to these challenges, a committee was formed, led by Vice Chairman Dr. Wagle.

The committee based its findings on reports from various cooperative and microfinance studies conducted at different intervals.

The report has attributed the root cause of the problem to the government’s financial and monetary policies implemented to address external shocks like Covid-19, the Russia-Ukraine war, and interruptions in economic activities.

It has pointed out the impact on loan growth rates, halted real estate transactions, diminished demand for goods and services, and a concentration on non-productive areas by cooperative owners.

The report has also raised concerns about the risk to deposits due to political patronage in cooperative operations.

It has criticized intentionally weak and impractical Cooperative Act and Regulations, suggesting that these legislative measures cater to political interests, as seen in the recently passed Asset Clearance Act.

Furthermore, the report has emphasized problems arising from the lack of regulation in cooperatives and microfinance.

It has also cited factors such as insufficient financial literacy among members, irresponsibility driven by high-interest rates, nepotism, and the expansion of cooperatives throughout Nepal, increasing risks in the sector.

Dr. Wagle’s report has recommended immediate government intervention in critical areas outlined in previous study reports.

It has called for Nepal Rastra Bank to regulate and supervise government dealings exceeding 500 million over three years.

The report has also suggested the government freeze and confiscate the property of directors from distressed cooperatives.

Additionally, the report has proposed essential legal and policy reforms, the establishment of a regulatory STI, a centralized database system leveraging technology, capacity development for good governance, and a revival of collectivity within the cooperative sector.