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Nu 20,000 loan is provided to help the cooperative members grow winter ​vegetables
Nu 20,000 loan is provided to help the cooperative members grow winter ​vegetables

Dairy cooperative starts nano-financing system

The decision of the dairy cooperative in Trashigang to stop supplying milk to the dairy plant at Koufuku International Limited in Chenari is paying off.

Establishing its own market in the town, the cooperative recently introduced a form of nano-financing system for its members. It has started giving away Nu 20,000 as loan without any mortgage to help members with agricultural activities in winter.

The loan is lent at an interest rate of 10 percent per annum to be repaid within a year.

The chairman of the cooperative, Dendup, said that the long-term goal is to establish a people’s bank. He said that the current practice of lending loans by the banks involved long and complicated procedures.

“The basic concept of the people’s bank is to provide maximum benefit to its members,” he said. “In the current practice, banks are the sole beneficiaries of the interest that an individual pays on the loans. The people’s bank will collect the interest and it will, in turn, be used for the people themselves.”

He said that if the idea of the bank gets approved, it would also encourage members to make deposits at the bank. “The bank would pay interest every three months and also declare dividends annually on the principal amount.”

The chairman said that every member will have their own share of the bank and they would ensure that everyone is benefited from it. “To begin with, we are planning the deposit ceiling to be set at Nu 50,000 and the minimum amount would be Nu 5,000.”

Dendup said that the initiative is driven by the idea to make its members self-sufficient. “This is why the loan will be restricted only to the members.”

However, he said that once the idea of the bank is approved, the membership would not be restricted to only farmers involved in rearing cattle.

Since the introduction of the scheme on November 11 last year, 14 members have availed the Nu 20,000 loan.

One of the beneficiaries, Tshering Yuden, said that she had invested the money in procuring manure for the potatoes she planted last year. “The loan was given to help us buy potato seeds but since I had already bought the seeds I invested in buying manure,” she said.

The 40-year-old farmer said that the loan was particularly helpful in buying manure as the price had increased. “Without such support, we don’t think we can grow healthy crops these days.”

Another recipient of the loan, Kezang Yuden, said that the procedures for the cooperative loan were simpler and less taxing compared to the other bank loans.

“Because we are uneducated, processing loans with banks are troublesome. This deters many of us from availing loans and land up borrowing from other people which creates more trouble,” she said.

Dendup said that the cooperative is also planning to give away loans specifically to purchase cattle. “The loan amount would increase and for surety, the applicant would need to provide us with a mortgage. Everything else would remain the same including the interest rate.”

The cooperative is currently lending from its reserve of about Nu 2.1 million that was saved from selling milk and from the member contribution of Nu 100 every month.

The cooperative started with 22 members as a dairy group in 2005 and registered as a cooperative in 2011. Today, it has about 50 households as members with 200 cattle heads.

The cooperative produces around 270 litres of milk every day during summer and around 200 litres in winter.

Younten Tshedup |  Trashigang

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