Tara Bastakoti

In developed as well as developing countries co-operatives play vital role in rural development. In Nepal, co-operatives provide important services in various sectors of rural economy. But these co-operatives are not able to get rid of the legal, social and economic challenges.

A co-operative is an autonomous association of people united voluntary to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise. It is a business owned and democratically controlled enterprise. It is a business owned and democratically controlled by people who use its services and whose benefits are derived and distributed equally on the basic of use. The user-owners of the co-operatives are called members. The member benefits in two ways from the co-operatives, in 0proportion to the use they make of it. Firstly, the more they use the co-operative, the more service they receive. Secondly, earnings are allocated to members on the basic of the amount of business they do with the co-operatives. The major imaging the profits but the welfare of the members co-operatives cover both development services and financial services.

The co-operatives are different then other business. They all business have similar physical facilities, perform similar functions and most of them follow sound business practices. But in co-operatives, its purpose, its ownership and control are enterprises that put people but not capital at the center of their business. They follow a boarder set of values than those associated purely with making a profit.

As a challenge of co-operatives poverty is main obstacle in rural area of Nepal. About 30 percent of the population of Nepal is under the poverty line. And nearly 44 percent of poor people are living in rural areas. Similarly Nepal’s 86 percent people live in rural areas in 3915 VDC and the rest 14 percent in 58 Municipalities. Nearly 80 percent people of rural area are employed in agriculture and related activities. Most of the people of rural areas are not able to access financial services. In this situation co-operatives can cover a wide range of development services including financial services for rural development.

Millions model of business enterprises to enable them to reach their personal and community development goals. Co-operatives create and maintain employment providing income. They promote the right of each individual through their various activities; Co-operatives are in many countries, significant social and economic actors in national economic and entire population at the national level.

Despite efforts by the government the address the situation, formal financial institutions do not serve the needs of most people in Nepal, especially low-income households and small plays a crucial role in poverty reductions. In this situation, co-operatives play the vital role in rural development by providing the financial services for poor people in rural areas.

In Nepal rural areas have not benefited from the increasing number of financial institutions because these institutions because these institutions have concentrated in few urban. Although many micro-credit programs and project have been lunched with two objectives of poverty, alleviation and employment generation, which means economic growth of the society. The co-operative model of enterprise can contribute for various business activities, like agriculture, banking and credit, fisheries, health, housing, insurance, travel and workers, co-operatives are the people’s institutions and they have vital role in resource mobilization in rural areas. Main target of the co-operatives are business and social service. Where they increase production and employment, improve economic condition, help agricultural development and encourage economic development. Behind it, some problem also come like confusion on national vision, lack of identity, professionalism, investment, creditability, capacity of government to monitor and small membership to gain economy of scale.

As a conclusion co-operative is a very popular business all over the world. Basically, co-operative is a voluntary organization with democratic management.