Kathmandu, 16th Sep. - The 'Asia Credit Union Forum -2023' is currently underway in Kathmandu, hosted by the Association of Asian Confederation of Credit Unions (ACCU) and jointly facilitated by the Nepal Federation of Savings and Credit Cooperative Unions Ltd. (NEFSCUN) and National Cooperative Bank Ltd. The forum, scheduled to run until September 17, has brought to light some concerning trends in Nepal's cooperative landscape.

While ACCU, a prominent South Asian-level organization with a substantial presence in Nepal, spearheads the forum, a noticeable decline in the attraction of Nepalese cooperatives towards its quality measurement program, known as ACCESS (A1 Competitive Choice for Excellence in Service and Soundness), is causing concern.

Notably, not only has the number of organizations receiving the ACCESS brand dwindled, but questions have also arisen regarding the governance capabilities of the participating organizations. Consequently, scrutiny has fallen upon the roles of ACCU, which manages the program, and NEFSCUN, which facilitates it.

The ACCESS program was introduced in Nepal by NEFSCUN in 2008, with technical support from ACCU. To participate, cooperative organizations must pay an annual service fee of 50 thousand rupees to NEFSCUN and an additional $500 USD to ACCU for auditing services. In exchange, organizers are responsible for providing training, education, advice, suggestions, and facilitation to participating organizations. However, the deteriorating conditions of these organizations have raised concerns about the effectiveness of the services and facilities provided by ACCU and NEFSCUN.

Since 2008, ACCESS program organizers have been auditing participating cooperatives and awarding the brand in Nepal. Initially, only four cooperatives achieved the brand, but in 2012, 24 participating cooperatives received various categories of the brand in a single year. However, this trend has reversed, with only one cooperative achieving the mark last year and two more doing so this year, despite approximately 78 organizations participating in the program.

The deteriorating financial and disciplinary conditions of participating cooperatives led ACCU to refuse an audit in 2022. ACCU subsequently sent an email to NEFSCUN, commenting that institutions in the standardization program had departed from the principles of credit unions and resembled banks. Furthermore, ACCU did not conduct an audit in 2021, citing concerns about the institutions' governance and COVID pandemic issues.

NEFSCUN sources attribute the declining attraction to the branding program to the failure to obtain government recognition, a lack of timely updates to ACCESS indicators, ACCU's insufficient institutional capacity to expand services, and inadequate education and training provided by NEFSCUN.

A source stated, "After the decline in the number of organizations receiving the ACCESS program, questions have been raised about the condition of the cooperative. ACCU and NEFSCUN must answer this question."

According to the source, the decrease in cooperatives achieving the ACCESS brand is attributed to increased bad debts due to the Covid-19 pandemic and weak institutional capital. Additionally, cooperatives encountered issues when ACCESS did not accept the loan restructuring facility provided by the Cooperative Department, and they believe NEFSCUN has not effectively facilitated in this regard.

  Misuse of the ACCESS Brand Despite a significant drop in organizations receiving the ACCESS brand, it has come to light that cooperatives awarded the brand in previous years have been misusing it, contrary to the agreement. Although ACCU only provides the brand for one year, these cooperatives continue to promote their achievement as if they hold the ACCESS brand indefinitely.

"The brand contract specifies a one-year period," the source clarified. "It is against the contract to consistently promote the brand once it has been received."

While NEFSCUN acts as the facilitator of ACCESS, it is incumbent upon them to prevent the misuse of the brand. However, sources close to NEFSCUN claim that the organization has not given this issue the attention it deserves.

The declining appeal of the ACCESS brand in Nepal, along with concerns about the governance of participating cooperatives, raises questions about the roles of ACCU and NEFSCUN, while misuse of the brand by cooperatives awarded it in previous years further complicates the situation. ---