Cooperatives drowned by investing in unproductive sectors: Dev Gurung
CPN leader Dev Gurung said most cooperatives have drowned by focusing only on savings and credit operations and investing in unproductive sectors. He claimed that about 40–50 percent of total loan investment went into real estate, while only 0.85 percent went into the industrial sector.
Kathmandu. Communist Party of Nepal (CPN) leader Dev Gurung said cooperatives have drowned by focusing only on savings and credit mobilization and investing in unproductive sectors. Speaking at the launch of the book 'Sahakari Thagiko Jalo' written by Manoj Bhatta, Gurung expressed this view.
He also accused most cooperatives of dealing in real estate and said Nepal's cooperative sector has deviated from its original concept.
According to Gurung, about 65 percent of cooperatives are focused only on savings and credit transactions. He said that because cooperatives are centered on microfinance or semi-banking models, investment in productive sectors has weakened.
He said cooperative investment has not been able to focus on agriculture, home-based and industrial production. He claimed that about 40 to 50 percent of total loan investment went into real estate, which is unproductive investment. Only 10 to 15 percent was invested in agricultural production.
Similarly, he said about 30 to 35 percent of investment went into the service sector, and cooperative investment in the industrial sector was only about 0.85 percent.
He suggested that for production-based cooperative development, the state must ensure a market for goods produced by cooperatives. Gurung stated that strict regulation and legal arrangements are necessary to solve the problems seen in the cooperative sector, and that the state needs to adopt a policy to protect the market for agricultural and other goods produced by cooperatives.