Cooperatives need to be digitized for economic transformation


We have brought Nepal Payment Solution as the last PSO to bring social and economic change in Nepal. It also has the legacy of NRN.

After we came as Young PSO of Nepal, we were pressured to do something new and better. It was natural. When I thought about what it could be, I thought that it should be addressed where there is no digitization but where business is being done.

We have allocated some areas to do something where there is no digitization and where there is a problem. For that we have chosen cooperative sector which has lower class but bigger scope.

The cooperative sector is very scattered. It was found that one Civizer was trying to create its own ecosystem with 1500/2000 cooperatives and another CBS was doing the same. One does not accept the other, the situation is working in a closed mindset.

In such a situation, we started cooperation with National Cooperative Bank Nepal Rashtra Bank, an organization approved by Nepal Rashtra Bank, instead of going from where to cover everyone.

From there, we are working jointly in an ecosystem by making their cooperation, the cooperation of tech companies, all the ecosystems a partnership, and we are also welcoming those who are not in this ecosystem.

We have also made a call that nothing can be done alone, something can be done if we all work together. It is not an informal economy, it can be made a formal economy. Cooperatives have reached where banks have not reached.

Where enterprise has not reached, entrepreneurship is being developed through cooperatives. We have started to empower it. In my opinion, for the first time in Nepal, fund transfer to co-operative, co-operative to bank, bank to co-operative fund transfer product is at the stage of going live.

Now this work is being done in-house before doing this work in public. Its main target is the cooperative bank. We are doing this work under the leadership of the Cooperative Bank. This work will progress in joint cooperation.

Now this work is starting through some reputed cooperatives of Kathmandu. At first it seems like a test, we go aggressively.

How is the facility? An important question is how to get benefits from cooperative automation. We are now trying to turn the cooperative into a bank. However, cooperatives cannot build digital infrastructure like banks.

It may be about software, hardware and manpower to run it. That’s why fintech companies like us are upgrading them. Every cooperative is digitized.

Internal digitization takes place, so that its members also get its direct benefits. The members of the cooperative will also get digital facilities like bank services.

After digitizing a cooperative, all its members will get the facility. Not only that, interoperable facilities will also be available between cooperatives.

Suppose Jumla is a member of a cooperative. He came to Kathmandu. He has to go to Jumla to use the funds in the cooperative, there is no way he can do it from Kadmadau. Or the people of Kathmandu come to Rara Pugla, there is a need for money, but there is no condition to use the money in the cooperative in Kathmandu.

He can now receive, pay and send money from there. No matter where he was a member, he could transact his money all over Nepal.

For that, it is called Copelink with the customer. There is an app called Copelink, it can be done by downloading it. So far, the situation is that you have to go to the cooperative and pay the money, then you have to go and collect it. Or the person of the cooperative has to come and collect. We have tried to digitize it.

A co-operative covers only a certain area and its people. They cannot provide services like commercial banks throughout Nepal. We are starting so that the customer can get the facility all over Nepal even if they have a specific area.

Every person has a certain time. If we can make every person productive, save time and reduce work that takes hours to minutes, it will help the country’s GDP.

Second, every organization or individual is at risk when dealing with money. That risk is gone. There is also the issue of transparency.

It helps to increase corruption, tax, government revenue. This leads to a more formal economy. We were able to digitize a lot in this area.

It is also a challenge to know how well the cooperatives of the lower years and their members can adapt to this technology. The first thing is that until today, various works are being done in the fintech sector. A kind of awareness has become. Digital literacy has been achieved to some extent.

However, the cooperative sector is still not very digital literate. That is the truth. There are still challenges to increase and convince.

However, that challenge has to be done in two ways. One is to increase public awareness. Another thing is to develop technology in such a way that even if we do not teach them much, they can use that technology. In this, various technologies can be provided in an easy way.

It has been two years since this work started. It has been one and a half years since the agreement was signed with cooperatives, banks, etc. The technology we have developed takes time. This should also be taken. We are not thinking of taking risks and doing things quickly.

Some large cooperatives are using mobile wallets. are using their card. Some are using international cards. However, they did not provide interoperable, they only got cooperative facilities. Sharing it, making it efficient, giving more facilities to the members.

(Based on ICT News’ conversation with Lokraj Sharma, Co-Founder and Chief Executive Officer (CEO) of Nepal Payment Solutions)

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