Savings and credit cooperatives could be an effective alternative to banks for rural financing. Formed in 2015, Monggar Kuendrel Nyamley Tshogdhey made access to loans for its members more than convenient. As of now, the cooperative is one of its kinds in eastern Bhutan and with what the brimming members share, it is striding towards a bright future.
The savings and credit cooperative started disbursing loans to its members two years after its formation. It proved to be a new lease of life for the members in meeting various expenses ranging from domestic to commercial. Of the 84 members registered, more than half are already benefitted so far. The Agricultural Marketing and Cooperatives department endorsed the group with approval from the Royal Monetary Authority.
Dechen Choden, a member of the cooperative shares the benefit of being a member: “I took a loan of Nu 25,000 which I used to send my children to school. I am a divorcee and face financial constraints. I also bought potato seeds with the remaining money. Being a member of the group is beneficial.”
“I bought a few jersey cows with a loan from the cooperative. There is no need for collateral and the loan is disbursed almost immediately. I availed myself a loan of Nu 25,000 and the monthly repayment is Nu 2500. If we get a loan from a bank, it takes almost a month for approval. It is not the case with the group,” said Tshering Wangzom, also a member of the cooperative.
The group sustains on the interest generated from loan and membership fees. It also received a grant of Nu 800,000 from Helvetas Bhutan to create employment opportunities and support needy people.
“When the group was first established, we paid Nu 1,000 as a membership fee. We deposit Nu 100 every month in our account. We welcome anyone interested to join the group. Like some other groups, we do not have any restrictions or stringent procedures,” said Dechen Choden.
Monggar Kuendrel Nyamley Tshogdhey provides loans of up to Nu 25,000 for livestock and agricultural activities at an interest rate of 10 per cent. Although no mortgage is required for the loan, a person availing the loan requires a guarantor.
Currently, there are two types of cooperatives in Bhutan – RNR Cooperative and Non-RNR cooperative, the Cooperative Act of Bhutan 2009 governs.
Sonam Tshering
