About 24,000 cooperatives in the country are facing crisis in Corona

About 24,000 cooperatives in the country are in dire financial straits due to the coronavirus. Due to long holidays, the regular loan collection and savings activities of these organizations are almost stopped. It is feared that the realization of disbursement of loans at the field level will be disrupted. More than 9 lakh officials and employees directly involved in the cooperatives are fearing to become unemployed. Stakeholders have demanded allocation of incentive money to cooperatives like NGO loans to protect their existence.

Md. Humayun Khalid, former secretary and former registrar of the Cooperatives Department, told Naya Digant yesterday that like the world, we are going to face a crisis due to coronavirus. Currently, the financial crisis has started in various organizations. There is a danger of food crisis ahead. In order to overcome this situation, more than one lakh cooperatives of the country have to be kept active. Various co-operatives like MilkVita, which are directly involved in income generating activities, have to follow the hygiene rules. Members of the law enforcement should be careful not to obstruct these activities. At the same time, about 24,000 cooperatives directly involved in lending activities like NGOs need to be provided incentives. Because, in the current situation, those who have taken loans, They are not able to pay it as the income has stopped. They need to be funded to participate in income generating activities. Just as Bangladesh Bank has provided incentive fund of Tk 3,000 crore for lending among NGO members, incentive initiatives need to be taken for cooperatives. Otherwise, those who kept their savings in these institutions will not get their money back. He thinks that for this, the Ministry of Cooperatives and the Department of Cooperatives should come forward. If government officials stay at home during public holidays, and their economic activities stop, their salaries and allowances will be cut off.

The co-operatives registered with the department of co-operatives take savings and deposits from the members of their association and provide loans for various developmental works like cow rearing and milkweed among the members of the association. Its activities are conducted through small traders, entrepreneurs, hawkers, small shopkeepers, slum dwellers. Savings and loan activities, FDR in the bank all together the amount of profit at the end of the year is distributed among the members of the association proportionately. But due to general holidays and lockdowns across the country, the activities of the institutions have been stopped.
Almost all government offices have been closed for a month to prevent coronavirus infections. Most districts have been locked down. This is disrupting all the financial activities of the cooperatives including regular loan activities. In this, some opportunistic members are looking for an opportunity to stop giving loan installments, shares and savings. As a result, the companies are facing financial crisis.
In this regard, Nirmal Rosario, former secretary of CALB, one of the top credit unions in Bangladesh, told Naya Digant yesterday that in most areas, the institutions are not able to do any work between lockdowns and public holidays. As a result, those who are involved with the cooperatives have become unemployed. They are not able to repay the loan taken from the cooperative. On the other hand there is a pressure to redeem savings. In this situation, the institutions have to be brought under the incentive package announced by the Prime Minister to keep them active. Institutions will be active if they are provided loans like NGOs. Members will be able to repay the loan.

Emdad Hossain Malek, founder and chief executive of Credit Union Sampriti, said the cooperatives are self-financed. Members are unable to repay the loan due to coronavirus. Again those who kept savings also have a pressure to redeem savings. All in all, the institutions are facing a difficult situation today. In order to overcome this situation, the concerned people of the government including the Cooperative Department have to come forward. He said that it was necessary to issue a specific circular from the Cooperative Department to conduct their activities. In the current crisis, they have to make arrangements to give interest free loans from the Cooperative Development Fund. At the same time, arrangements have to be made to withdraw the 15 percent tax levied on the net profit earned by all cooperative societies since 2015.

According to the latest statistics of the Department of Cooperatives, the number of cooperative societies directly involved in credit activities in the country is about 24,000. Its number of members is about 1 crore 10 lakh. The savings deposits of the associations are around Tk 6,162 crore. Loans of Tk 6,046 crore have been disbursed and Tk 4,006 crore has been recovered. The reserve fund is about 930 crore. More than 9 lakh officers and employees work directly in their offices to manage the activities of the associations.