The government will soon be able to get instant updates on the financial health of the cooperatives operating in the country as they will be required to submit financial details online. The Ministry of Cooperatives and Poverty Alleviation (MoCPA) has been preparing to make it mandatory for cooperatives to upload their accounts so it can keep a close tab on them.

The online reporting system is being introduced after the financial health of some cooperatives started deteriorating beyond repair within a very short period, indicating lapses in monitoring on a timely basis.

“We believe the installation of the online information system will make the monitoring of the cooperatives more effective,” said Joint Secretary Suresh Pradhan. “The system will be launched within a month.”

Initially, the MoCPA had planning to introduce the online reporting system for savings and credit cooperatives with annual transactions of Rs50 million and greater. Currently, there are more than 33,000 cooperatives operating across the country. Among them, 14,000 are savings and credit cooperatives. Over 600 cooperatives are estimated to have an annual turnover of Rs50 million and above.

According to the ministry, a software named Copomis has been developed for the online reporting system. Pradhan said the operation guideline for the information system had been finalised.

“The proposed software has been developed in compliance with Pearls monitoring system that will also help track the financial health of savings and credit cooperatives in particular,” he said.

Pearls is a financial performance monitoring system that includes a set of financial ratios. It involves 44 quantitative financial indicators that facilitate an integral analysis of the financial condition of the institutions.

It records information such as the number of members of each cooperative, share capital, investments made by the cooperatives, deposit to credit ratio and liquidity ratio, among others.  Pradhan said the system would provide information on duplication of cooperative members, the portion of bad loans, details of borrowers and the liquidity situation. “This will help to prevent embezzlement at cooperatives,” he said.

Once the system is up and running, all cooperatives will be able to submit their financial reports to the concerned Cooperatives Division Offices online.

Moreover, cooperative members can view the financial records of their respective institution online. Many cooperative operators have not been disseminating their financial information even to their own members.

Cooperatives will be required to submit their financial reports to the division offices monthly after the system is implemented. Current laws require cooperatives to file monthly reports, but most have not been doing so. Pradhan said timely submission of reports to the authorities would help to minimise wrongdoings by cooperatives.

The ministry has developed the software with support from the UK’s Department for International Development (DFID). According to Pradhan, the DFID has started providing training to cooperative operators on using the information system.