Pem Tsering Sherpa, 71, and his wife Jambung, 55, were making just about enough to survive from a small eatery they ran out of their Jorpati home on the outskirts of Kathmandu.

The regular customer was one of the operators of Sumo Saving and Credit Cooperative Limited in Bauddha. He offered a 15 percent annual interest on their savings.

The Sherpa couple trusted him and deposited their money. Over time, the cooperative started giving them bags, t-shirts, sweaters, and tea cups every year as souvenirs on top of interest payments. Five months ago, the couple’s deposits in the cooperative amounted to Rs2.5 million.

“Even my cousin sent Rs700,000 from Qatar and asked me to deposit it with the cooperative so he could get a good interest rate,” said Sherpa.

The goodwill did not last, though.

The cooperative owner is out of the contact and their hard-earned savings have evaporated.

In their effort to recover the savings, the couple were in a protest at Maitighar in Kathmandu on Friday. The couple carried a distorted image of an operator of the cooperative.

“We no longer have the time or energy to earn. Nor can we get support from my son as he isn’t on good terms with us,” said Sherpa, pleading for help to locate the cooperative operators so that they may get their deposits back.

The duo travels from Bauddha to Maitighar every day. For a week they have closed their eatery to sit on the road in scorching heat with two dozen other similar victims from Baudha.

Four years ago, Chin Kala Malla, 45, and her husband Rajib, 47, came to Kathmandu Valley from Himali Rural Municipality in Bajura district. Their sole purpose was to provide ‘better education’ to their only son Kushal who was at the time in the sixth grade.

Chin Kala and her husband worked on a farm in Godavari. They would take green vegetables to Satdobato, Lalitpur, to sell. In their early days of business, a woman came to them and asked them to deposit their daily earnings in her cooperative, suggesting that the savings could be used for her son’s higher education.

As the woman had suggested, they regularly deposited their money in Sandhya Saving and Credit Co-operative Limited. They also enrolled their son in a local private school.

“We deposited regularly for the sake of our son’s bright future. Our fixed deposit amounted to Rs500,000, but they didn’t allow us to withdraw it citing the Covid-19 pandemic and its impact on the cooperative,” said Chin Kala.

She too was at Maitighar on Friday along with her son Kushal, who is now 15.

“He just took the Secondary Education Examinations (SEE). We don’t have money for his higher education. I am told that the chairperson of the cooperative is on the run,” said Chin Kala, who has been a regular at the protest for a week.

Sherpa and Malla represent hundreds of people who deposited their hard-earned cash in cooperatives and are now in trouble as the cooperative operators have gone out of contact. Many of those who are in contact tell them that they can’t immediately give back the deposits.

Other depositors who came to Maitighar for the protest shared similar stories.

Over two dozen victims of cooperatives have been staging a sit-in at Maitighar, pleading with the authorities to help them get their savings back.

In its preamble, the Cooperatives Act, 2017 says a cooperative helps with the economic, social and cultural uplift of community members.

“But most of them are doing the opposite,” said Purushottam Karki, coordinator of the Federation of Cooperative Victims. “Instead of providing financial help, they have been swindling huge amounts of money from the depositors.”

Karki said the victims wanted strong punishment for the culprits.

Additional Inspector General Kiran Bajracharya, chief at the Central Investigation Bureau that oversees such cases, said cooperative fraud and money laundering were becoming common across the country.

“Every day the bureau receives many complaints, some from the Cooperative Department, others from the provincial government. Many people also come at the individual level,” said Bajracharya.

Officials at the police bureau said that every day over 100 individuals file complaints. While some make calls to record their grievances, others visit the office to lodge the complaints.

“Police alone can’t solve this problem,” said Bajracharya. “First, the accused cooperative operators’ accounts should be frozen. Many of them are trying to flee abroad. We cannot allow them to go,” she said.

The chief of the Nepal Police bureau said if the government does not take stringent and immediate actions against such cooperative operators, there is a chance of capital flight.

“If the operators of cooperatives get a chance to fly abroad, they will definitely go,” she said.

As of Friday, victims of 28 different cooperatives from around the country have met at Maitighar.

“We are trying to organise as many victims as possible,” said Karki.

Some victims have been on the streets for months demanding government action against fraudulent cooperatives.

In the first week of February, the Kathmandu Metropolitan City said more than 2,000 victims had filed complaints against 123 cooperatives that owed depositors more than Rs960 million.

At the time, the municipal office claimed to have resolved 57 cases and forwarded the rest to the police for investigation.

In his conversation with the Post on Friday, Khimanand Aacharya, deputy-registrar and complaint hearing officer at the cooperative department, said cases of cooperatives defaulting have sharply increased after the Covid-19 pandemic.

The government promoted cooperatives as one of the three pillars of the national economy to complement the private and public sectors to help reduce poverty and promote socialism.

But a large number of cooperatives have failed to work as per their stated objectives because of lack of government oversight and wrong intent of the operators.

Mitra Raj Dawadi, co-chair of the National Co-operative Development Board, which is headed by minister for Land Management Cooperative and Poverty Alleviation, said the current crisis emerged as cooperatives didn’t follow the basics.

He said the government adopted a policy of letting the cooperatives run as self-regulatory organisations. “For that the cooperatives should be self-disciplined to follow the rules—and they are not,” Dawadi told the Post. “We see many anomalies in the way the cooperatives function today.”

Dawadi said there should be a specific agency where the victims can lodge complaints and get justice. “I don’t understand why the government is taking so long to tackle the problem head-on.”