Co-operative societies and their types

Co-operative society

A co-operative is an autonomous association of persons who voluntarily unite to meet their common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. Its motto is "each for all and all for each". In Nepal it is governed by the Cooperatives Act, 2074 (2017) and the Constitution of Nepal, which recognises cooperatives as one of the three pillars of the economy (public, private and cooperative).

Main features:

• Voluntary membership; open to all.
• Democratic control: one member, one vote regardless of shares.
• Service motive rather than profit; limited return on capital.
• Limited liability of members.
• Surplus shared as dividend or bonus according to patronage.
• Registered with the Department of Cooperatives or local authority.

Types of co-operatives

1. Consumer co-operative: Supplies goods at fair prices to members (for example, Sahakari stores).
2. Producer co-operative: Helps small producers or artisans obtain raw materials and sell products.
3. Marketing co-operative: Collectively sells members' products; for example, vegetable and farmer marketing groups.
4. Credit / savings and credit co-operative (SACCOS): Collects savings and gives loans to members; the most common type in Nepal.
5. Agricultural co-operative: Supplies seeds, fertilizer, equipment and loans to farmers.
6. Dairy co-operative: Collects milk from farmers and sells to the Dairy Development Corporation or private dairies.
7. Housing co-operative: Provides houses or land plots to members.
8. Multipurpose co-operative: Performs several activities (credit, marketing, supply).
9. Others: Health, energy (community electricity), tourism, transport, forestry and youth co-operatives.

Cooperatives have been important for rural finance and for empowerment of women in Nepal.