Kathmandu, 13 April: The problems in the cooperative sector have been becoming increasingly complex. As more and more institutions fall into trouble one after another, the entire cooperative sector has reached a critical state.
With cooperative operators absconding after defrauding people—including the poor, helpless, and persons with disabilities—not only has it become difficult to return depositors’ savings, but even the actual details of such institutions remain unclear. One such example is Evertrust Savings and Credit Cooperative.
Former secretary Gopinath Mainali has stated that since the cooperative sector—considered the fourth pillar of the economy—is now affecting the overall economy, the government must take appropriate measures to address the issue.
Meanwhile, depositors have spent years meeting newly appointed prime ministers and ministers after every change in government, requesting the return of their savings. Despite repeated government assurances, no concrete results have been achieved so far, and depositors are losing hope of getting their money back. One depositor said that instead of decreasing, the number of problematic cooperatives has been increasing day by day, and it now seems unlikely that the state will address their demands.
Although the government initially declared 23 cooperatives as problematic, it has not been able to resolve their issues. The number of troubled cooperatives continues to rise. Recently, the National Cooperative Authority had recommended 16 cooperatives to be declared problematic to the Ministry of Land Management, Cooperatives and Poverty Alleviation, but the proposal was returned due to incomplete procedures.
Officials from the Cooperative Authority say that the sector has become more complicated due to issues such as failure to return deposits, operators going absconding, and lack of clear records of assets and liabilities.
Similarly, Evertrust Savings and Credit Cooperative, located in Kathmandu Metropolitan City–7, has also fallen into trouble due to failure to maintain adequate records and non-compliance with laws, regulations, and directives governing the cooperative sector.
According to an official, even the exact share capital of the institution is unknown. “It was found that around NPR 7 million belonging to about five visually impaired individuals is also stuck in the cooperative. The money was collected by them through singing on the streets and seeking support,” the official said.
One depositor, Santosh Pant, said he had deposited money in the cooperative for a short period after taking a loan from a bank to send his daughter abroad. “Since the visa process was taking time, I withdrew the approved bank loan and deposited it in the cooperative, trusting it as a friend’s institution. Now it’s stuck,” Pant said, adding that around NPR 4 million is trapped in Evertrust.
After his money got stuck, Pant has also taken on the responsibility of representing cooperative victims.
He said that even the operators who were taken into police custody were later released on bail with the promise of settling transactions, but they eventually sold all their assets and fled.
According to Pant, although the institution claimed to have share capital of around NPR 530 million, more than NPR 100 million was invested without proper documentation.
The cooperative, established in 2009 (2066 BS), came into trouble in 2021 (2078 BS). Its chairman is Deepak Thapa Magar, vice-chairperson is his wife Babita Dangol, and the secretary is his brother-in-law Kanchharam Dangol. Similarly, Bishnu Prasad Fuyal is the treasurer, while Kumar Rana, Ramlal Maharjan, and Amarbhai Bajracharya are members.
Some board members have been arrested, but currently only the treasurer remains in custody, while others have been released on bail with the condition of settling transactions. However, victims claim that they have instead sold their assets and fled. The chairman is still absconding.
A victim depositor said, “The problem started in early 2021. Even after that, the cooperative continued its operations. During that time, they increased loan recoveries as much as possible but did not return deposits. Instead, the chairman and other operators fled with the money.”
Later, some operators were arrested following complaints from depositors and cases related to cheque bounce under banking offenses. Police followed due process and presented them in court. Although the court released them on bail on the condition of resolving the cooperative’s issues, they failed to do so and instead sold their assets and absconded.
According to depositors, around NPR 400 million has been misappropriated in Evertrust Cooperative. Officials say that the cooperative, established by Kanchharam Dangol and Deepak Thapa Magar, ran into problems due to mismanagement within a close-knit group of relatives.
The Cooperative Authority reports that 650 depositors have filed complaints stating they have not received their savings back.
“Not all depositors may have filed complaints,” an official said. “So far, claims amounting to NPR 219.23 million have been registered.”
The authority also stated that only partial information is available regarding total deposits and loan investments of the institution. While depositors have demanded their money back, it is unclear how many of them are also borrowers.
Since some individuals are both depositors and borrowers, the situation becomes more complex. As key officials of the institution are absconding and proper records are lacking, the authority is currently conducting further study and investigation.
