1SAHAMATI FIELD BULLETINSeptember 2012 (Year #1, Issue #1)100% Household Coverage: A paradigm shift in Cooperatives of NepalCommunity based womens cooperatives in Sindhuli have probably made history in terms of outreach and depth of theirservices incorporating each and every 2246 household of four VDCs-Ratanchura, Bhadrakali, Jalkanya and Bhimeswore.It was declared in a huge mass of around 2000 people mostly women gathered in historical place-Sindhuligadhi,organized by secretaries of respective VDCs. Most of women members were in similar uniform-Red Sarees. The eventnews was covered by several media including a national newspaper- Kantipur Daily on 15th Sept 2012. Follow up news ofa Paribartan Mahila Savings and Credit Cooperative Bhadrakali was aired by BBC Nepali Service on 25th Sept 2012.Such declaration is quite relevant to add value to the initiatives of government of Nepal- that has recognized cooperativesector as one of the three pillars of development in Nepal. The news is also pertinent with Year 2012 as UN InternationalYear of Cooperative and this months UN Millennium Development Goals summit that highlighted the importance ofreaching the world’s most disadvantaged people in order to achieve the MDGs with equity by 2015.The IssuesPoverty is rampant in Nepal. In development arena, we come to face the reality that development program usuallydo not reach the bottom quintile- the disadvantage section of society-the poorest of poor, the Women, Dalit andOther minorities. Thus the development programs by and large remain not inclusive in the real sense.Rather of changing milieu, Nepalese women are in low position comparing with their male counterpart. Economicactivity largely depends upon access over the financial resources. Commercial banks are still not accessible to therural people. Money lenders charge high interest rates. Women do not have access of financial resource either frommoney lender or commercial banks- since both require collateral, and women usually do not possess the land orother properties. In rural areas of Nepal womens work is mostly regarded within household chores; they are notencouraged to participate in economic activities. Due to deep rooted patriarchal thought women are usually not inpart of decision making in any social strata. Female have less freedom to education. As a consequent womenfrequently fall into gender based violence and discrimination.100% household coverage declaration mass meeting (28-05-2069) in SindhuligadhiLeft: Participants attentively viewing the program Right: Public address by Ms. Sushila Basnet, Secretary of Janjagaran Mahila Savings & Cooperative
2The superstitious and fatal practices like witchcraft, early marriage, dowry system, girl trafficking, sexdiscriminations are still prevalent in Nepalese society. But the shift has begun- by the programs focused on socio-economic empowerment of women and girls. Transformation is always painful; it requires passing through seriesof experiments and experiences.Cooperatives in Nepal: Past and PresentAccording to International Co-operative Alliance (ICA), cooperative is an autonomous association of persons unitedvoluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned anddemocratically controlled enterprise. Cooperatives are based on the value of self-help, self-responsibility,democracy, equality, equity and solidarity.Nepalese people have a century-long tradition in sharing and cooperation in many forms as labor sharing invillages, informal mutual groups and rotating savings and credit association (Dhikuri). The history over formationof credit cooperatives in Nepal goes back as early as 1954 when government established the Department ofCooperatives (DOC) under the Ministry of Agriculture. The first cooperative formed in Nepal was credit acooperative as part of flood relief and resettlement program. It was legally recognized when the first CooperativeSocieties Act was created in 1959.Therefore, the history of cooperatives in Nepal is closely related to Government’s initiatives to use cooperative aspart of its development program. Government’s view on cooperatives has been changing in every five-year plan ofthe country without having concrete vision towards the development of cooperatives and proper mechanism tosupport and supervise the cooperatives. The responsibilities for managing the cooperatives were transferred tothe government-owned Agriculture Development Bank. But, loan recovery rate was very poor- as low below 50%.It was due to lack of transparency, policy clarity and ownership.In Nepal, Government initiatives have hardly enough impact in poverty reduction. So the concept ofdecentralization, self-help, community-based organization, cooperation, bottom-up approach flourished starting in1990. The real emergence of cooperatives can be considered only after enactment of Cooperative Act in 1992. Thegovernment encouraged the formation of cooperatives by providing tax exemption and incentives. As a result,there was a high numerical growth. Experience in the past few years suggested that cooperatives can be anefficient means to carry integrated development services to the poor people.Currently Government of Nepal has recognized Cooperative as one of the three pillar of economic development inNepal. About 3,000,000 people are involved in total of 23,000 cooperatives in Nepal. The GDP contribution fromthe sector alone is about 3% whereas 15% financial contribution in overall economy. The access of cooperative tothe people is highly improving. The community based savings and credit cooperative have been successful in Hillas well as Terai regions. The reason behind success of community based cooperative is due to ownership, economicgovernance, high repayment rate, administrative easiness, cost effectiveness and cooperativeness among themembers.Women only Cooperative- A New Era of thought and actionWomen are good managers. They have efficient management capacity. It is proven in case of Makawanpur where27 cooperatives are effectively owned, managed and controlled by women. So is the case of Sindhuli, Baglung,Myagdi and other districts.The womens cooperative is highly successful model in Makawanpur. The cooperatives after phasing out of theexternal technical support-too are performing wonderfully well. The cooperatives health is financially sound, andsocially recognized. One of the cooperative-Mahila Jagriti Savings and Credit Cooperative Bhimphedi wasrecognized as the "Best Cooperative of the Year 2069" (Kantipur newspaper, 18th Sept 2012). It was recognized byNational Federation of Savings and Credit Union Nepal (NEFSCUN).
3100% Coverage Campaign-The process and challengesBefore the campaign, the household coverage of women cooperatives in Sindhuli was about 60-90%. The leftoverfamilies were located relatively in geographically isolated area and dispersed from the village center. Thehouseholds were mostly from bottom quintile. Attention towards them was less hence a type of dissatisfaction wasthere in cooperative.The idea of incorporating 100% household in the cooperative was kicked off in a review meeting of chairpersonand manager of cooperatives. It was then put forward in respective cooperatives board meeting. The idea was fullyaccepted and taken forward as campaign by four cooperatives. Then board of directors took lead the process.According to Indra Kumari Hayu, Chairperson of a Mahila Shakti Savings & Credit Cooperative Ratanchura, theyhad to face so many challenges for their womens cooperative campaign. Few of the societys male members usedto tell, it was impossible to operate, and cover all the households that is run by women. The opinion was putforward with the saying that women are illiterate, and they are not exposed with the economic and socialdevelopment aspects. Some people blamed Indra that she is almost going bare keeping such an unmet idea.However the cooperative board members never gave up. They visited door to door of the families who were notenrolled in the groups. They also mobilized influential peoples including VDC secretary, political parties leaders,and school head teacher in coverage campaign. Few households initially refuse to enroll in the cooperative. Thefollow up was made regularly-with explaining importance about benefits of being member. The enrollment for thefirst time requires nominal amount i.e. Rs. 175 for each membership. Organizational receipt, format, stamps etcwere taken along with during the campaign. The membership was provided on the spot. Finally all the householdscame under one umbrella.Paradigm ShiftIn the conventional cooperatives, the leaders are elite, so called educated persons. The cooperatives are usuallydominated by male, the teacher, politician, or upper caste people. The coverage is very low. It was believed that thecooperative cannot be run by females-since they are not use to with such things.Now the old paradigm is shifted in Sindhuli. Four cooperatives out of twenty totals have provided exemplary interms of coverage-to the poor and disadvantage section of society. Other cooperatives too encouraged. Twentycommunity based women cooperatives are fully run by women. They own, manage and control the cooperativesand their activities. They are efficiently and effectively managing the cooperative. Now women do have access tocredit as well as savings.The womens access to micro-credit that is enabling them to micro-enterprises, such as Vendor shop (Grocery, Tea,Meat, Restaurant), Livestock (Goat, Pig, Cow, Buffalo), Poultry, Cash crop, Skill based work (Sewing and cutting,weaving, beauty parlor). As a result women have better income, and better livelihood of the whole family thanbefore. Now male counterparts also been started to praise women for their deeds. Despite the fact that majority ofwomen in the boards are illiterate. It is proven that education is not only pre-condition for institutionaldevelopment of socio-economic activities.It is already observed that those who were not able to introduce themselves in front of two persons can speech infront of thousands of people. The women now have enhanced personality and leadership capability. The dignityand self-esteem of women in the village is dramatically improving.Kishori Samuhas, group of teenage girl is also part of the cooperative program. They are wonderful vehicle forfighting against social evils-such as stopping Child marriage cases in the community. The gender based violence,caste based discrimination and evil social practices are being gradually reduced.
4The women cooperative now has access over the government/VDC budget allocated for women. According to ThalKumar Paudel, Secretary of Bhadrakali VDC while speaking in BBC radio service told that all women budget of VDCwill be channelized through women cooperative. The cooperative already started to access and utilize budget fromVDC in awareness raising and capacity building of women.Secret of SuccessMost important aspect of the community based model is true ownership of the members. Ownership was builtthrough involving the members right from the start. Before forming cooperatives, key members were taken toexposure in Makawanpur to have interaction with the womens cooperative to see how their cooperatives gonethrough the institutional development process, and how they are still performing well without any externalassistance. The cooperative foundation is built upon demonstrated will of potential members and theirengagement during forming stage.Asking what was driving force for women cooperative to go for 100% coverage campaign, Indra said, "We wantedto make our cooperatives a role model in Nepal. We are inspired from the progress of womens cooperative inMakawanpur. We provide good service to the needy people, and make the members feel real owners". The serviceprovided by the cooperative largely cater to the requirement of poor women-i.e. small loan at reasonable cost, easyand short processing time, requires no physical collateral.The experience of support agencies in the cooperative sector is intensive. It has always taken the program as amission, not as any project. The support agencies have clear cut idea about till when the support is required, andwhen to get back. Transparency, capacity building, regular consultation, supervision and continuous monitoringare the key to success. Good linkage and relationship with local bodies including DDC/VDC is also important factorto success.ChallengesCovering 100% households means enrolling bulk of members at once. It is always challenge to manage and meetthe expectation of new members. Scarcity of finance for credit service may appear. The cooperatives have alreadyapproached with Nepal Rastra Bank for wholesale loan to mitigate the challenge.Cooperatives are now key player in the village. However of precarious situation, the chance of labeling in politicalcolor could be there. There are several micro-finance service providers in few of the villages. The program canduplicate with one or more programs. Quality and consistent service is always required, and the cooperatives arefully aware of that.ConclusionIn terms of outreach and depth the womens cooperatives in Sindhuli light as a role model in development sector ofNepal. Thus community based savings and credit cooperative is one of the best alternative models for equitableand sustainable economic and social development. It is proven fact that cooperatives contribute to empowermentof community, access and control over public resources, enhance leadership capability. The cooperatives, if fullyfunctional as their values and principles, can be powerful vehicle for socio-economic transformation and change.The womens cooperatives in twenty VDCs of Sindhuli are promoted under "Capacity Building of Micro-finance Institution under GirlsPower Project (CBMFI)" program that is implemented by SAHAMATI Nawalparasi with the financial support from Plan Nepal since2010. All the cooperatives are registered entities. These women cooperatives have 14500 share members, and the loan outstanding isNRs.36.8 million till August 2012.For further queries or feedback on the field bulletin, please contact to firstname.lastname@example.org or email@example.com. For moreinformation about SAHAMATI, please browse www.sahamati.org.