Savings and Credit Cooperative Model: Problems and Prospects

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Savings and Credit Cooperative ModelProblems
and Prospects

• Min Raj Kadel
• Chair person
• Nepal Federation of Savings and Credit
  Cooperative Union Ltd.
• (NEFSCUN)
• Kathmandu, Nepal

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Savings and Credit Cooperatives (SACCOS)

• ' A credit union is a cooperative financial
  organization owned and operated by and for its
  members,. according to democratic principles, for
  the purpose of encouraging savings, using pooled
  funds to make loans to members and providing
  related financial services to enable members to
  improve their economic and social condition'
• (World Council of Credit Unions)

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Current status of SACCOSin Nepal

• No. of SACCOS 3,392
• Membership 403,000
• Male 230,000
• Female 173,000
• Share Capital 450 million NRs.
• Savings 8,962 million NRs.
• Source DOC as of 31 Ashad 2064

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Structure of SACCOS
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NEFSCUN

• A national apex body of savings and credit
  co-operatives and their district unions
• Provides financial and non financial services to
  its members
• 539 SACCOS
• 225.000 individual members
• Guided by International Credit Union Principles
  and Values
• Established in 1988.

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Micro Finance in SACCOS

• Micro Finance services are provided throughout
  most SACCOS
• A special Micro Finance Program is carried out
  within SACCOS
• Exclusively focused on women, youth,
  disadvantage and excluded groups.
• Setting up of Business Development centre as a
  business service provider

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Our Vision on Micro Finance

• Member owned and controlled (cooperative)
• Savings oriented
• Inclusive Micro finance directed to women,
  youth, disadvantage and excluded groups
• Business oriented approach

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Problems

• Legislative framework
• Absence of Credit Union Act
• Contradiction among various Acts
• Tax burden
• Ambiguous government's vision and policies
• Complex socio-political situation
• Lack of adequate resources for training and
  education

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Problems

• Lack of coordination among cooperatives and MFI's
• Lack of professionalism

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Recommendations

• Clear and conducive Policy environment from
  government
• Tax Exemption
• Formal Cooperative Education
• Effective monitoring and supervision
• Clarity on roles and responsibilities of all
  stakeholders
• Coordination among Micro finance service
  providers
• Enhanced Government Support
• Focus on rural areas

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Thank you !