‘Cooperatives will own assets of members’
- By Misheel Lkhasuren -
- May 12,2021
On May 10, lawmakers S.Chinzorig and G.Temuulen, Director of the Agency of Small and Medium Enterprises Ya.Erdenesaikhan and Vice President of the National Association of Mongolian Agricultural Cooperatives D.Batmunkh reported on the Law on Cooperatives, which was revised on May 6.
Legislator S.Chinzorig said, “The powers of state and local self-governing bodies related to cooperatives were redefined in the law. Particularly, it defines the powers of government agencies to increase the supply of raw materials and products through cooperatives, to evaluate the development of cooperatives every two years, and to provide management and information to cooperatives through cooperative associations.”
“In accordance with the revised law, each cooperative will have its own assets. Assets of its members will be registered in the name of the cooperative. This will allow cooperatives to borrow from commercial banks. Arrangements to exempt value-added tax from services of a cooperative that serves its members are included in the law. As a result, cooperatives will develop independently, and it will create more jobs and promote the cooperative movement in rural areas through the activities of cooperatives,” he added.
Parliamentarian G.Temuulen noted that it includes a measure to make 2022 the Year of Cooperative Development on the occasion of the 100th anniversary of the cooperative movement in Mongolia, and the government instructed to take measures to intensify the cooperative movement.
There are more than 4,700 registered cooperatives in Mongolia, 86 percent of which are primary and 13.5 percent are savings and credit. Most of the cooperatives operating today are in rural areas, and most of the active members are herders, according to Ya.Erdenesaikhan.
He emphasized that with the adoption of the law, local herders and farmers are able to sell their products to local producers without any intermediaries, and local producers are able to supply and sell it to consumers at the lowest possible price.
“The Soum Development Fund was established by Resolution No. 134 in 2011 to support local small and medium enterprises through soft loans. The government conducted a state inspection in 2019, and the working group concluded that the fund should be transformed into a cooperative development fund. The Soum Development Fund in all soums of Mongolia has an average funding of 1 billion MNT. In accordance with the revised law, the fund is being transformed into a cooperative development fund, and relevant regulations are being developed and approved,” Ya.Erdenesaikhan said.
The lawmakers believe that the revised Law on Cooperatives will provide a legal basis for taking the development of cooperatives to a new level, as well as an incentive for the international cooperative movement to spread throughout the country.