SOCIO-ECONOMIC CONTRIBUTIONS OF NAVAJEEVAN COOPERATIVE AND ITS IMPACT ON POVERTY REDUCTION IN KAILALI DISTRICT, NEPAL

Abstract

Cooperatives have manifested as centralized tools of promoting financial inclusion and improvement of livelihoods in developing economies. This study critically examines the socio-economic value addition of Navajeevan Cooperatives Limited (NCL) located in the Kailali district of Nepal and determines how the membership in the cooperatives alleviates poverty. Based on survey data of 405 cooperative members, the study uses descriptive statistics, reliability tests, correlation tests, cross tabulations and logistic regression to estimate the interrelationship of the variables: economic well-being, financial inclusion, social capital, credit access issues, and self-reported poverty alleviation. The results reveal that financial accessibility is widely spread, but economic well-being represents the strongest predictor of poverty alleviation (p < 0.0001, OR ≈ 8). The social capital has moderate impact and access to credit alone is not a significant predictor of poverty outcomes (p = 0.2227). The limitations to the provision of credit include strict eligibility requirements, lack of financial literacy, and geographic location. The findings highlight the fact that cooperatives produce not only multidimensional benefits, including economic, social, and institutional benefits, but that their potential to reduce poverty is fulfilled most when there is a buttressing of financial services by favourable social conditions and institutional reform. It adds to the cooperative development theory and presents policy recommendations that can strengthen cooperative governance and capacity of members in Nepal.