BIKRAM RAI

As Finance Minister in 2008, Baburam Bhattarai won plaudits from the unemployed when he established the Youth and Small Business Self Employment Fund. After he became prime minister, this fund turned into a source of cash for his party's cadres and Rs 130 million was doled out to cooperatives owned by them from November 2011 to February 2012.

A major objective of the programme is 'to provide loans at subsidised rates to communities that have traditional skills like Kami, Sarki, Damai, Dhimal, Rajbanshi in order to improve their living standards'. However, none of the cooperatives have followed this guideline.

Even though the fund's rules stipulate that banks and cooperatives may not impose interest rates higher than 12 per cent, some banks are charging up to 24 per cent interest. Deputy-chairperson of the fund, Punya Prasad Regmi does not deny this, but says monitoring and regulating it is not important.

Two cooperatives Labourers Martyr Memorial Consumer Cooperative Limited (LMM) and Himshikhar Savings and Loans Cooperative Limited received Rs 50 million each from the fund and are registered in Kathmandu and Lalitpur under the chairmanship of Maoist trade union leaders Ganesh Prasad Regmi and Shiva Prasad Kattel respectively. Madhuban Savings and Loans Cooperative Limited operated by Maoist leaders and cadres in Gulmi received Rs 30 million.

As soon as these cooperatives received the money, the officials promptly took out loans for themselves. Seven members of the Maoist Newa Rajya ethno-federal unit and secretaries of trade unions took between Rs 80,000 to Rs 165,000 from LMM. None of them are unemployed, whereas the rules of the fund state that only the jobless can apply for a loan.

Similarly, LMM provided loans of Rs 1.98 million to Rs 3.8 million to five groups of Maoist cadres led by Baburam Gautam, Jagat Bahadur Simkhada, Kumar Prasad Panta, Rajan Timilsina and Usha Devkota. Over the next three months, all five groups registered their own cooperatives and none of their intended livestock, food grain and sports equipment businesses ever saw the light of day.

The official rule states that cooperatives registered to one district may not operate in other districts. But both LMM and Himshikhar have openly flouted this rule and distributed loans as far as Kaski and Nuwakot. None of the groups that took loans have started new businesses as stipulated. In fact, Himshikhar even provided a loan of Rs 100,000 to Daily Sandesh, a non-existent newspaper.

Sashi Kumar Lamsal of Lalitpur's Cooperatives Division says these activities have not been monitored because of 'political reasons'. Bosses of the Kathmandu Division say that the fund provides money to cooperatives, and it up to the cooperatives to act responsibly.

Read the original article in Nepali