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Institution Development and Capacity Enhancement Program for Leasehold Forestry Cooperatives Limited 1999 to 2001

Project area: Dhadhing, Tanahun and Makwanpur district.

Nepal possesses successful experience on providing sustainable micro finance services to small and marginal farmers (similar to LFUG members), given that activities like institution development, saving mobilization, capability enhancement of local institutions and provision of matching fund are carefully considered. Unlike other activities, institution development of LFUGs is not an easy task, It has been felt that institutional base of LFUGs can not be developed without a simple and understandable manual with clear-cut and functional steps and process for (i) providing leasehold program and (ii) developing institutions capable of undertaking both leasehold development and micro finance activities. The project has entrusted DEPROSC-Nepal to prepare a simple and understandable manual to implement the rural finance program by the leaseholds groups themselves. The manual was prepared and pre-testing was done in three districts Tanahun, Dhadhing and Makawanpur by federating leasehold groups into inter groups and developing the inter-group cooperatives. Leasehold groups in these districts are federated into six inter groups to form a sustainable cooperative capable to implement savings and credit, lease land development program and various income generation programs. Three inter-groups have been registered into multi-purpose cooperatives, one in each district and three inter-groups are in a process of registration under cooperative act. The challenge at this moment is to enhance the newly emerged cooperatives need technical support of external agency in the initial stage, particularly in saving and credit management, account keeping, cooperative management, livestock development and marketing management. The program was therefore planned to establish the cooperatives and enhance their capability for institutionalization and development of the leasehold programs to increase the income level of the participating members and ecological improvement of the leaseland. The specific objective of the project were to

· Enhance the capacity of the executive members to organize regular monthly meeting to increase the awareness, ensure the participation and maintain the quality in the program.

· Enhance the capability of the Leasehold Forestry Multipurpose Cooperative Society Limited (LFMCSLs) by organizing training on

(i) savings and credit management

(ii) accounts/record keeping and financial/operational management

(iii) loan policy and procedures for effective and sustainability of the cooperatives

· Initiate livestock development program and complete preparatory work to initiate livestock insurance program in the areas

· Establish group marketing program to ensure the input output supply at reasonable rate for lease land development, livestock development and income generation program for poverty reduction,

· Develop the cooperatives as an institution capable to cater competent credit services, income generation and lease land development program for sustainable development

Activities and Achievement of the Project

Out of sixteen inter-groups formed, fifteen have been registered as cooperatives (five each in Dhading, Tanahun and Makwanpur district). In Tanahun and Dhading, the inter-groups have been registered as Multipurpose Cooperatives whereas in Makwanpur two inter-groups have been registered as Single purpose Leasehold Cooperative and remaining three as Multipurpose Cooperative.

· A total of 1025 members (649 male and 376 female) from 170 LFGs have participated in the cooperatives.

· Out of the total 1025 members, 926 are the formal members i.e. 560 male and 366 female have purchased the shares of the Co-operatives which is 90 % of the total membership.

· There were 87 additional children members participating in the child saving scheme. This is in Basaha MCL, Dhading and Maibal MCL, Tanahun.

· Membership structure in the cooperatives was mixed with 37% female participation. Female participation was above 60% in four cooperatives (Maibal MCL, Laligurans MCL and Buldi MCL ) in Tanahun and in one cooperative (Basaha MCL) in Dhading. Female participation was highest (74%) in Maibal MCL of Tanahun and lowest ( 2%) in Mahadev MCL in Dhading.

· Average female participation was highest in Tanahun (55%) followed by Dhading (23%) and Makwanpur (19%). However, in case of Dhading, except Basaha MCL and Annapurna MCL the rest three cooperatives had less than 10% female members.

· The average number of members per cooperative was 68.

· All the LFMCL have executive committee where 153 members including 39 female (25%) have participated where target group's representation is 91 (60%) in the board.

· All the cooperatives have organized their Annual General Meeting in time through which management committee in 11 LFMCL has been changed.

· Seven cooperatives have kept paid Accountant for accounts and record keeping.

· Two cooperatives in Tanahun (Buldi MCL and Maibal MCL) and one cooperative in Makawanpur (Shree Kalika MCL) had applied their application for having soft loan from RSRF of NRB.