A Study on Financial Performance of Navayug Saving & Credit Co-operative Limited

Abstract

I investigate a case study of the financial and social impact of the Navayug Savings and Credit Cooperative (SACCO) in rural Nepal, a topic which has diverse unattended questions pertaining to remote cooperatives. The cooperatives of Nepal are recognized by their constitutions as one of the major sectors of the economy alongside the public and private sectors. Their role is crucial in the promotion of local development and financial inclusion of remote areas. This is even more important in underdeveloped areas where the cooperatives function as the only available financial institutions and help alleviate poverty.

Adopting a mixed-methods case study, this research studies qualitative empowerment outcomes and quantitative financial metrics (2078–2080 BS) using the PEARLS monitoring framework. It is evident from the results that Navayug SACCO has a great social impact—its membership includes 58% women and 17% Dalits, and there are real stories of economic empowerment through credit and leadership. That said, financial data points to troubling operational deficiencies, including weak liquidity (average cash ratio of 7.26%), low profitability (ROA 0.47%), and erratic current ratios—all below international cooperative operating standards.

A local cooperative’s inefficient financial policies lead to hostile exchanges in communal finance. While the grassroots cooperatives serve to boost social inclusion and empowerment, their financial management is weak, threatening their long-term viability. This research contributes to the literature in the following ways: first, it presents research on cooperatives in the hinterland, which are understudied. Secondly, it investigates the cooperative policies of Nepal and their implementation. Thirdly, it integrates the aspect of social impact and financial health through one single framework. In regard to policymakers and practitioners, the results highlight the concern. The social missions of cooperatives must be complemented with advanced competencies in financial governance, risk management, and daily operations. Success in these aspects only leads to sustainable poverty reduction.