ISSUES AND PROSPECTRS OF DEPOSIT MOBILIZATION OF

COOPERATIVE ORGANIZATIONS
(A STUDY OF SURKHET VALLEY)

 
A Thesis Report

Suvas Thapa
Roll No.: 67040098
MWU Regd. No.: 2018-67-3-1001-0049
Faculty of Management
Mid-Western University
August, 2020
 Background
Deposit mobilization is a fundamental part of financial
institutioning activity. Mobilization of saving through
intensive deposit collection has been regarded as the major
tasks of financial institutions. Mobilization of deposit for a
financial institution is as essential as oxygen for human
being. Deposit mobilization is one of the main functions of
financial business and so an important source of working
fund for the financial organizations. Deposit mobilization
is the collection of cash or funds by a financial institution
from the public through its current, savings, fixed,
recurring accounts and other specialized schemes (Banson
et al, 2013).
 Statement of the Problem
The transaction cost of cooperatives is lower than other financial
institutions because voluntary members undertake most of the work,
and this unpaid participation reduces the overhead costs. Being
located in urban and rural areas, they collect deposits at their
members’ doorstep, so members can easily and frequently execute
transactions without incurring traveling costs. Financial risk is
limited since they mobilize their own resources. One of the key
questions that any institution should ask is when getting involved
with cooperatives programs to avoid crises. Finally, the increased
reliance on member funding counters the risk of dislocation that
would be caused by the discontinuation of outside support.
Therefore, the purpose of the present study is to empirically
investigate the potential issues and prospects of deposit mobilization
on the financial sustainability of cooperative organizations in Surkhet
valley.
 Objectives
This study is concerned with issues and prospects
of deposit mobilization of cooperative
organizations in Surkhet valley. The general
objectives related to this study are presented below:
• To find out the issues of deposit mobilization in
terms of higher transaction cost, technology and
competition.
• To analyze the prospects of deposit mobilization
in terms of investment opportunity, profitability
and potential growth of deposit sector.
 Limitations of the Study
• This study was about the issues and prospects of
deposit mobilization. So, the result of this study
may not be generalized in other areas.
• The respondents were limited upto 75 only.
• The data were collected from the managers of
cooperative organizations in Surkhet valley.
• Only primary data were used in the study.
• The study has been limited within Surkhet valley
only.
 LITERATURE REVIEW
Deposits are normally considered as a cost
effective source of working fund, the
cooperative’s ability to lend more as well as
its success greatly lies on its deposit
mobilization. However the cooperative’s
ability to mobilize enough funds from the
public through its current, savings, fixed,
recurring accounts and other specialized
schemes will depend on the systems
employed in this highly competitive
industry (Digaria, 2011).
 Conceptual Framework
Independent Variables Dependent Variable

Issues
Issues
--Higher
Highertransaction
transactioncost
cost
--Technology
Technology
--Competition
Competition DependentVariable
Variable
Dependent
DepositMobilization
Deposit Mobilization
Prospects
Prospects
--Investment
Investmentopportunity
opportunity
--Profitability
Profitability
--Potential
Potentialgrowth
growthofof
deposit
depositsector
sector
 RESEARCH METHODOLOGY
Research Design
This study adopted descriptive and quantitative research design.
Population of Study
The target population for the study included all the managers of cooperative
organizations in Surkhet valley.
Sampling Design
Purposive sampling method was used to select the sample.
Sample Size
The sample size was 75 managers of 75 cooperative organizations.
Development of Questionnaire
Questionnaires were developed to collect primary data from the respondents.
Administration of Questionnaire
Direct communication was made with the respondents to collect information and
discuss about the survey work.
Data Analysis and Presentation
Data analysis was done using SPSS version 20 and the Microsoft Excel software.
The frequency, percentage were used to describe the nature of data. Mean, standard
deviation and variance were used to find out the issues and prospects of deposit
mobilization.
 Findings
• Out of the total respondents, 56 percent said that low transaction cost increases deposit,
34.7 percent said that high transaction cost decreases deposit and 9.3 percent said that
low transaction cost increases deposit and high transaction cost decreases deposit.
• In this study, 90.7 percent of the respondents said that use of technology has effects on
deposit mobilization and 9.3 percent said that use of technology has no effects on
deposit mobilization.
• The study found 28 percent of the respondents said that the competitors of cooperative
organizations are development banks, 16 percent said that the competitors are
commercial banks, 52 percent said that the competitors are other cooperatives and 4
percent said that there are no competitors of cooperative organizations regarding deposit
mobilization.
• The study found 97.3 percent of the respondents said that deposit mobilization creates
investment opportunities and 2.7 percent said that deposit mobilization does not create
investment opportunities.
• The study found out of the total respondents, 96 percent said that deposit mobilization
creates profitability and 4 percent said that deposit mobilization does not create
profitability.
• Among the total respondents, 92 percent said that growth of deposit sector enhances
deposit mobilization and 8 percent said that growth of deposit sector does not enhance
deposit mobilization.
 Summary

The topic of this research was Issues and Prospects of Deposit Mobilization of
Cooperative Organizations in Surkhet Valley. The purpose of this study was to
find out the issues and prospects of deposit mobilization of the cooperative
organizations. The study was undertaken in Surkhet valley. All the managers of
cooperative organizations were the population of the study. Among the managers of
the cooperative organizations, 75 were selected as sample by using convenient
sampling method.
Purposive sampling method was used to select the sample from the managers of
cooperative organizations.
The researcher distributed the questionnaires to the respondents. All the
questionnaires were collected by the researcher. The researcher distributed 75
questionnaires to the respondents. All of the 75 questionnaires were collected.
The data were analyzed using frequency, percentage, mean, standard deviation,
variance, tables and figures. This study succeeded to find the relationship between
independent variables and the dependent variable. After the analysis and presentation
of data, recommendations were made
 Conclusion
This study was conduct to find out the issues and prospects of deposit
mobilization of cooperative organizations in Surkhet valley. The data
were collected through primary sources. Questionnaires were used to
collect the data from the respondents. The study concludes that there is
difference of 1 to 8 percent and above in cost of transaction of
cooperative organizations. Mostly ICT is used in deposit mobilization.
The study further concludes that there is competition among cooperative
organizations regarding deposit mobilization. The study also concludes
that cooperatives invest on personal borrowers, businesses, agriculturists
and other sectors. The study concludes that deposit mobilization creates
profitability and deposit mobilization gains profit. The study finally
concludes that growth of deposit sector enhances deposit mobilization
and the potential sectors of deposit mobilization are business, agriculture,
education, health and others. The study concludes that the higher
transaction cost, technology and competition are the issues of deposit
mobilization whereas investment opportunity, profitability and potential
growth of deposit sector are the prospects of deposit mobilization.
 Recommendations
• It is suggested to the concerned authorities of cooperative
organizations to minimize transaction cost so as to increase deposit.
• It is suggested to concerned authorities of cooperative organizations
to use new technologies to enhance deposit mobilization.
• It is recommended to the concerned authorities of cooperative
organizations to decrease interest rate on loan and increase interest
rate on deposit to enhance deposit mobilization.
• It is suggested to the concerned authorities of cooperative
organizations to enhance investment through deposit mobilization in
different sectors.
• It is suggested to the concerned authorities of cooperative
organizations to mobilize their deposits in different sectors to
increase profitability.
• It is recommended to the concerned authorities of cooperative
organizations to practice and mobilize deposit to increase deposit
sector.
 RFERENCES
Banson, F. et al. (2013). The Role of Mobile
Deposit in Deposit Mobilization in Ghana.
Asian Journal of Business and Management
Science, vol. 3.
Digaria, H.A. (2011). Deposit mobilization.
M.A.E.E.Rs MIT School of Management,
PUNE: 411038, University of Pune.
Thank You !