The cooperative movement in Nepal has reached its current state after going through various ups and downs. Although it has been accepted as an important means of economic and social transformation since the First Plan period, its development has not always been balanced and systematic. Especially from 2013 to 2047 BS, the joint institutions promoted by the government were limited to distributing agricultural loans, fertilizers and seeds in rural areas under the direct control of the state. After the restoration of democracy, cooperatives were redefined as the basis of participatory development. With the provision of managerial autonomy by the Cooperative Act 2048 BS, the sector saw rapid expansion. The contribution of cooperatives in savings mobilization, credit flow and employment creation has been significant.

Today, the participation of millions of members in the cooperative sector and the mobilization of large financial resources have added energy to the local economy. However, challenges have also increased with the expansion. Lack of effective regulation and monitoring has led to a lack of financial discipline in some institutions, which has weakened the trust of savers. Excessive investment, lack of transparency and lack of institutional good governance, especially in the real estate sector, have had a negative impact on the entire sector. As a result, public trust in cooperatives has declined. Which is a matter of serious concern in the long term.

In the 1990s, after the emergence of an open market economy, people were organizing themselves to collect small savings for their food, clothing, and shelter. In the then background, the World Bank made public the fact that cooperative savings institutions had contributed to expanding financial access to more than 350 million people around the world. After this, with the support of DFID, the International Labor Organization, and other bilateral and multilateral development partners, economic, social empowerment and poverty reduction programs were launched in developing countries in Asia and Africa, including Nepal, at the government and non-government levels. Due to which a wave of cooperatives was established in the rural and semi-urban areas of those countries. This is the first reason for the numerical growth of cooperatives in Nepal. Along with the numerical growth of cooperatives promoted by the government and non-government sectors, due to not paying due attention to capacity development, it was taken as an exit strategy and had a serious impact on qualitative development. 

Currently, 12 percent of the world's total population, or more than 100 million people, are affiliated with 3 million cooperatives in various fields and sectors, providing employment to more than 100 million people. They have also contributed to social justice and inclusive economic development. In Nepal, most of the investments are irregularly channeled into real estate transactions without arranging the necessary liquidity funds, which has badly tarnished the image of cooperatives. Although more than 62,000 savers have demanded about 40 billion rupees against 22 cooperatives declared problematic by the Cooperative Management Committee, only partial amounts have been returned to 4,472 savers of 3 cooperatives so far. In addition, it is estimated that about 100 billion rupees of savings are yet to be returned, including 18 cooperatives and other cooperatives that have been publicly discussed as problematic.

In addition to the worries that the money saved for the future will be lost due to overeating, savers are suffering from family conflicts, house damage, and inability to receive health treatment. This problem is plaguing not only well-intentioned cooperatives but also the government and supporting agencies. To resolve the problem, the government has amended the Cooperative Act 2074 BS and established the National Cooperative Regulatory Authority to regulate cooperatives engaged in savings and credit transactions. It has been issuing standards and registering and documenting the organizations. However, despite the general understanding that bringing organizations that do not adopt laws, directives and standards under the ambit of immediate action would send a positive message, there has been a delay in doing so.

Although the standards and directives mention that more than 51 percent of the total investment of cooperatives should be directed to the production-oriented sector, the regulatory bodies and the investing cooperatives themselves have not been serious about implementing it. In the current context where public trust in cooperatives has been eroded due to the risk to members' savings, this year's Cooperative Day was celebrated under the slogan 'Entrepreneurship and Transparency: Priority of Cooperatives', under the intense pressure of the need to create employment by mobilizing cooperative capital for entrepreneurship development with transparency. Although it seems to be trying to send a message to cooperatives to prioritize and invest in entrepreneurship development in a transparent manner, looking at past traditions, this time too, this slogan seems to have come from ritualistic mercury.

According to the Global Three Hundred published by the ICA on the occasion of the International Year of Cooperatives 2025, the three hundred cooperatives with the largest turnover in the world have an annual turnover of 297 million US dollars, which ranks as the seventh largest economy in the world in terms of gross domestic product. Countries like India, Korea and Japan in Asia are among those who do large transactions on the basis of cooperation. The capital, goods and services production, technology and managerial skills and competitive capacity of the cooperatives here are no less than those of any multinational companies. This proves the understanding that cooperatives should only be small in size wrong. It shows that cooperatives are enterprises in themselves. How to make members entrepreneurial, competitive and employment-oriented for economic and social development? This is the pressing question of today. 

In the context of Nepal, limiting cooperatives to savings and credit transactions is ignoring its broader potential. It is necessary to link it with production, employment and enterprise. Expanding investment in productive activities by integrating local resources, labor, and skills is the need of the hour. Especially in areas such as agriculture, animal husbandry, small industries, handicrafts, energy, and tourism, if cooperative capital can be mobilized, income-generating opportunities can be increased at the local level. This can strengthen the rural economy and also help in import substitution and export promotion. Running entrepreneurship-oriented programs targeting young people is another important aspect. Linking skill development, financial literacy, and vocational training with cooperatives can encourage innovation. If cooperatives can be involved in the entire value chain from production to market, both the income of members and the sustainability of the organization will be strengthened.

To maintain good governance in cooperatives, regular audits, annual reports, general meetings, and open information flow are essential to maintain transparency in institutional activities, financial transactions, and decision-making processes. No organization can be sustainable without accountability and discipline. Therefore, clear rules, codes of conduct, and effective monitoring mechanisms are necessary in the operation of cooperatives. As important as self-regulation and self-governance are in cooperatives, the role of government agencies is equally important. Only policy clarity, effective regulation, and timely intervention can move the cooperative sector forward in a healthy direction. The implementation of the Cooperative Act and related standards should be strict. It is necessary to make financial transactions safe, transparent, and accessible through the use of digital technology. Online reporting, digital accounting systems, and member information management not only help in enhancing institutional capacity, but also help in instilling trust.

The success of a cooperative is not possible without the active participation of members. Since members are the real owners of the organization, their conscious participation, regular savings, contribution to the decision-making process, and monitoring of leadership are essential. Member education and awareness help move the organization forward on the right path. On the other hand, the possibility of collaboration between the private sector and cooperatives is equally important. Connecting the managerial skills and market access of the private sector with the social base of cooperatives creates new opportunities in production and national and international market expansion. This increases competitive ability and contributes to long-term economic stability. Maintaining a balance between entrepreneurial thinking and transparency is the major need of the day.

Without innovation, an organization cannot be dynamic, and without transparency, trust cannot last. These two aspects complement each other. Only through effective management, a clear vision, and responsible leadership can a cooperative be established as a reliable and capable organization. The coordinated role of cooperative members, cooperative organizations, unions, provinces, local governments, and development partners active in promoting cooperatives is important in entrepreneurship development. 

Cooperative members should develop entrepreneurial thinking and risk-taking ability. For that, they should actively participate in regular savings, production-oriented investment, and other activities, exchange skills, knowledge, and experience, and effectively utilize cooperative services. In addition to providing affordable loans, savings, and financial services, it is essential for cooperative organizations to provide entrepreneurship development training, skill development, and consulting services to their members. For this, cooperative organizations have the opportunity to coordinate with various supporting agencies.

If cooperatives can always put themselves at the forefront in supporting market access, branding and value chain development and promoting transparency, good governance and innovation, not only will the trust of members and potential members in cooperatives increase, but cooperatives can also stand as a strong pillar for economic development in accordance with the spirit of the constitution. In this context, there is a challenge to integrate the role of development partners. National and international development partners active in the promotion of cooperatives can support cooperatives in the work of technical assistance, financial resources and promotion of innovation. Development partners are expected to play a role in transferring international experience, knowledge and best practices, enhancing capacity through projects, training and research, providing technical and skill development training, and strengthening multilateral coordination and partnerships.