Nepal Refunds Cooperative Victims

Why this is here: Borrowers of troubled cooperatives have already repaid over Rs20 million in loans, indicating a response to increased public pressure and transparency.

The government of Nepal began refunding deposits to victims of problematic cooperatives on Monday, returning roughly Rs1.4 million to 378 depositors. The Problematic Cooperative Management Committee prioritized small depositors—those with savings of up to Rs10,000—in the first phase of repayments. Funds were distributed from Kantipur, Pashupati, and Shiva Shikhar cooperatives, with Rs989,716 going to Kantipur depositors alone.

Around Rs46 billion remains outstanding, held by nearly 76,000 depositors across troubled cooperatives. The committee aims to process 500 applications daily, but initial progress has been slower. The government established a revolving fund of Rs600 million to finance these refunds, bolstered by recovered loans and reconciled savings.

However, the process is phased, with subsequent refunds capped at lower percentages of the total deposit. Kushal KC, chair of the National Federation of Cooperative Victims, requests that the government extend refunds to victims of cooperatives not yet officially designated as “problematic.” The committee continues to identify and designate additional troubled cooperatives for inclusion in the refund program.