Financial Efficiency of Cooperative Federations in Karnataka: A Study on KSCF Societies and KSSFC Societies

Abstract

The cooperative sector in Karnataka has played a pivotal role in promoting financial inclusion, rural development, and socio-economic empowerment. Among the key institutions, the Karnataka State Cooperative Federal  Societies (KSCFS) and the Karnataka State Souharda Federal Cooperative (KSSFC) represent two distinct cooperative models that contribute significantly to the state’s financial landscape. This study seeks to evaluate and compare the financial efficiency of these federations, with a focus on their operational performance, profitability, and sustainability. The research is based on secondary data drawn from annual reports, audit records, and published statistics over a ten-year period. Financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), liquidity ratios, and solvency measures are employed, alongside CAMEL analysis, to assess efficiency and stability. The comparative approach highlights variations in capital adequacy, asset quality, earnings, and compliance standards across the two federations. Preliminary findings suggest that while both cooperative federations have demonstrated resilience in serving members and mobilizing resources, KSSFC societies exhibit greater flexibility and innovation under the Souharda framework, whereas KSCFS societies reflect stronger adherence to traditional cooperative norms and regulatory compliance. The study concludes that enhancing managerial efficiency, ensuring better audit compliance, and leveraging technology are crucial for improving financial performance. The results provide valuable insights for policymakers, cooperative leaders, and stakeholders in strengthening the role of cooperative federations in Karnataka’s economic development.