EFFICIENCY OF RISK MANAGEMENT IN COOPERATIVES SOCIETIES

The people are achieving equal aims and goals have forming Cooperatives Society. It access to capital market for poor, middle class and illiterate people. Risk management always has been included, but different stakeholders most critical of all risks faced by depository institutions. Though regulatory prerequisite imposed to Cooperative has not standard as imposed to banks by central bank, and the number of risk has been observed in this sector. Along with the horizontal and vertical growth of Cooperatives, it diluted the ethical practices, and resulted issues, such as adverse selection problem, lack of transparency and poor governance system. Credit risk management of Cooperative does not seem to be satisfactory so, concern authorities should select an appropriate credit risk management systems and management should give emphasis for credit risk management. risk variables are significantly associated with financial performance, efficiency, and organizational factors. A huge discrepancy on sizes of activities between the Cooperatives, unanimous regulatory direction for policy reform may not be effective for this sector.