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Government Report Exposes Crisis in Nepal's Cooperative Sector Amidst Financial Irregularities

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A government inquiry report has revealed a deepening crisis within Nepal's cooperative sector, attributing it to widespread financial irregularities, embezzlement of funds, and weak regulatory oversight. The report indicates a significant erosion of public trust in these institutions, which were intended to be a vital part of the economy. Minister for Land Management, Cooperatives and Poverty Alleviation, Pratibha Rawal, has stated the government's commitment to implementing the commission's recommendations to reform the sector.

• The "Inquiry Commission on Malpractices in Cooperatives, 2026" report highlights that cooperatives have been approved without proper criteria and have suffered from political interference and a lack of coordination among regulatory bodies.
• Cooperatives have reportedly abandoned member-centered service principles, focusing excessively on savings and loan transactions, and investing depositors' funds in risky sectors.
• The report identifies a lack of skilled manpower, inadequate information systems, and insufficient technological capacity within the Cooperative Department and related bodies.
• The government plans to focus on strengthening governance, implementing structural reforms, and improving loan recovery to restore the cooperative sector's reliability.