Effective database systems for co-ops in pipeline
KATHMANDU : The government in a bid to improve information management system of cooperatives has stepped up to enforce Copomis and Credit Information System in the sector.
In 2017, the government introduced an online financial reporting system named Copomis, and instructed cooperatives to install the software.
Similarly, the Credit Information Center, which is in the pipeline, is expected to help maintain the credit information of debtors, a move aimed at identifying defaulters. Both the systems are expected to improve the database in cooperatives that would help healthy growth of cooperatives through strengthening the reporting system in the sector.
Shashi Lamsal, deputy registrar of the department, said they have coordinated with all the sub-national government to carry out effective implementation of Copomis even in the cooperatives located in the rural areas of Nepal. “With handing over the authority of cooperatives regulation to 7 provincial governments and 753 local governments, they are delegated to provide concern username and password to the cooperatives to operate the software,” said Lamsal.
Through the installation of Copomis, the government has planned to have all the cooperatives connected electronically to allow effective monitoring. The platform works in compliance with the Pearls monitoring system, a financial performance monitoring system, which includes a set of financial ratios. It involves 44 quantitative financial indicators that facilitate an integral analysis of the financial condition of the institutions.
It records information such as the number of members of each cooperative, share capital, investments made by the cooperatives, deposit to credit ratio and liquidity ratio, among others.
The system is expected to provide information on duplication of cooperative members, portion of bad loans, borrowers and liquidity situation which will help to prevent embezzlement at cooperatives, according to the department. Under this system, all cooperatives have to submit their financial reports to the concerned authorities online.
Lamsal said that, the department currently is in process of upgrading the Copomis software. “Citing some shortfall in the previously implemented platform, the department has recently shortlisted Infotech Pvt Ltd, a software developer, to add necessary fields in the computerized system,” he said.
Suresh Pradhan, former joint-secretary of the Ministry of Land Management, Cooperatives and Poverty Alleviation, who also led the team to implement Copomis, said that, the software would largely help check the wrong practices being seen in number of cooperatives. “The database system can control possible manipulations by the cooperative operators who intend to take undue personal benefits and will hence take the sector to modernization,” said Pradhan.
With remaining largely unregulated, number of savings and credit cooperatives had landed in financial problems, which is mainly blamed to lacking effective reporting system in those cooperatives. The ministry has so far declared 12 savings and credit cooperatives in the Kathmandu Valley problematic after they failed to pay back their depositors’ money. The Problematic Cooperatives Asset Management Committee has been working to liquidate their assets to raise cash to pay off the creditors.
Currently, there are more than 34,000 licensed cooperatives operating in the country. As of now, 15 percent of the total cooperatives have entered their details in the system, according to Lamsal.
Lamsal said that, the department has trained officials of almost all the cooperatives to implement Copomis. “Most of the cooperatives having annual transaction of more than Rs 10 million have already been incorporated in the platform.”
Meanwhile, the ministry, in association with the National Cooperative Federation of Nepal, has started the process to install the Credit Information Center in the cooperative sector. The regulation of Cooperative Act 2017, which came online since last year, talks about the provision of the center to check the malpractices in cooperative businesses.
Chitra Kumari Thamsuhang Subba, general manager of the federation, who heads the task force, said the proposed credit information system in cooperatives will follow a similar structure as the one used by the credit information bureau — a government agency that looks after fraud cases in the banking sector. “We have almost finalized the draft of the bylaw and related working guideline to implement credit information system,” said Subba.
According to her, the bylaw has envisioned forming a separate body that will incorporate representatives from the National Cooperative Federation, Nepal Federation of Saving and Credit Cooperative Union and various product based cooperatives association to operate the Credit Information Center. “High level officials from the concerned ministry, department and National Cooperative Development Board will represent the board of the proposed body,” said Subba, adding that they would shortly submit the final draft to the ministry for final approval.
Published On: March 8, 2020 By: RAJESH KHANAL