KATHMANDU, May 9 -- Many cooperatives are found to have fallen in financial problems mainly due to issuing loans rampantly to the near and dear ones of their board members.

Kashi Raj Dahal, former chairperson of the Problematic Cooperative Management Committee, said a number of cooperatives faced problems after the executives provided loans to their close family members. Giving an instance, Dahal said the chairperson of one of the cooperatives that they had cross-checked was found to have issued loans of up to Rs 5 billion without any collateral.

"In one of such cases, the chairperson of a cooperative provided a huge amount of loans just on the backup of the guarantee of his wife," said Dahal, speaking at a program organized by Nepal Fe...