KATHMANDU: The Ministry of Cooperatives and Poverty Alleviation (MoCaPA) has decided to enforce an act to empower cooperatives and add up to their accountability.

According to the Ministry, unethical practices by few cooperatives have defamed the whole sector and the soon-to-be endorsed act aims to purify the sector.

There are 34,000 cooperatives in operation and more than 5,000 cooperatives transact and release loans above Rs 1 crore, out of the total, only 130 cooperatives face charges of fraud, Ministry stated.

According to Gopinath Mainali, Secretary at MoCaPA, as the cooperative sector adds up to the goal of economic prosperity, there is an impending need of an act to sustain the sector and hold it responsible towards its members.

“Although self-regulation, self-responsibility and self-guided approach are the fundamental clauses of cooperatives, few of them are involved in wrong-doings,” Mainali said. “The soon-to-be endorsed act will curb unethical practices in the sector.”

The act will include provisions on interest-spread-rate, work area classification, member classification, discounts, specialisation and risk minimisation through reserve and surplus funds.

Cooperatives operate in all seven provinces of the country with 6,100,000 members. Likewise, cooperatives contribute 19 percent to the total production of financial sector and 4 per cent in Gross Domestic Product.