The Critical Review Of The Sources Of Funds Open To Cooperative Society In Imo State (A Case Study Of Some Selected Primary Cooperative Society In Imo State.)

Project and Seminar Material for Cooperative Economics and Management CEM

The Critical Review Of The Sources Of Funds Open To Cooperative Society In Imo State (A Case Study Of Some Selected Primary Cooperative Society In Imo State.)


This is no doubt that finance is the blood life of any business enterprise even cooperative society.
In the truest concept and practice, finance is concerned with money, and is involved in cooperative societies for the establishment or formation.

This research work tends to look into the sources of funds opened to cooperative, how cooperative source for funds, the importance of sourcing for funds, why cooperative are organized, origin or cooperative, sparking up of cooperative, organizing step in cooperative and factors that could affect the formation of cooperative society.

Table Of Contents

Preliminary Page(s)

  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Abstracts
  • Table Of Contents

Chapter One

1.0 Introduction

  • 1.1 background of the study
  • 1.2 Statement of problem
  • 1.3 Objectives of the study
  • 1.4 Research question
  • 1.5 Significance of the study
  • 1.6 Scope of the study
  • 1.7 limitation of the study
  • 1.8 Definition of terms

Chapter Two

2.0 Review of Related Literature

  • 2.1 Origin of cooperative
  • 2.2 Sparking of a cooperative
  • 2.3 Why cooperative are organized
  • 2.4 Organizing steps in cooperative
  • 2.5 Sources of funds opened to cooperative
  • 2.6 The importance of finance in cooperative
  • 2.7 The reason for joining cooperative
  • 2.8 Factors that could affect/influence the establishment of cooperative

Chapter Three

3.0 Research Methodology

  • 3.1 Research design
  • 3.2 Sources of data collection
  • 3.3 Rationale for choice of variables
  • 3.4 Instrument for data collection
  • 3.5 Description of data
  • 3.6 Validity and reliability of measuring instrument

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Analysis according to research question
  • 4.3 Data presentation and classification

Chapter Five

5.0 Summary of Findings, Conclusion and Recommendation

  • 5.1 Summary of findings
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography
  • Appendix
  • Questionnaire

Chapter One

1.0 Introduction

This project research tends to look at the sources of funds open to cooperative society in Imo state, a case study of some selected primary cooperative societies in Imo state.

Observation and questionnaire shows the sources of funds opened to cooperative society, and emphasis is placed on the sources. The existence of a business enterprise to a large extent depends on the availability of fund both for initial take off and for running the business.

Enough capital outlay is needed to buy assets (e.g cars, building, equipment etc), and for handling daily needs (e.g stationeries, paying wages and salaries etc). lack of fund can put a firm on a standstill. The capital requirement of business varies from firm to firm.

Financing is the act of raising and using of funds by individuals, cooperatives, firms and governmental organizations for their day to day operations, running and management of a business undertaking as opted by Okeke (2006). As a discipline, finance is merely a body of facts, principles and theories which deal with the raising (e.g by borrowing) and using (e.g by investing) of money by individuals, cooperatives, firms and governmental organizations. In the truest concept and practice, finance is concerned with money (that is the life blood of any business enterprise) be it cooperatives, partnerships, limited liability companies etc.

Adeyeye (1978), implied that no business organization can thrive and survive without constant and adequate flow of finance . He opted that in business financing there are three ways of going about it, and is as follows;

  1. By short term
  2. By intermediate term
  3. By long term

To further explain, short term is the type of borrowing that is repayable within one year intermediate is more than one year but less than5 years, while long term is 5 years and above.

A key consideration in choosing the source of cooperative finance is to strike a balance between equity and debt to ensure the fund structure suits the business.

The main difference between borrowed money (debt) and equity and that bankers request interest payments and capital requirements, and the borrowed fund is usually secured on business assets or the personal assets of shareholders/ directors.

The overall objective in rraising funds in cooperatives to excessive high borrowings, but without unnecessarily diluting the share capital. Raising funds is often a complex process. Cooperative needs to assess several alternatives and then negotiate terms which are acceptable to the fund provider.

Bob Igwe (1996), quoted that the sources of funds opened to any cooperative society has made it possible for the director/management to take a reasonable decision that will effect changes in cooperative development.
Calvert H (1956), said finance is the most encompassing of all business enterprises.

Cooperative society have expanded forms of business due to the opportunity to raise shares of capital through the public and the ease with which fund can be available to them owing to the fact that they have collateral to borrow money from financial institution.

1.1 Background Of The Study.

According to thirlwal (1972;260), the study of the sources of funds opened to cooperative van be viewed from domestic resources. Some members of cooperative societies in the rural arrears are characterized by poverty, illiteracy, unemployment etc. and has become a huge problem to financing cooperative.

The formation or starting up of a cooperative need good financial planning, by this the researcher means an adequate identification of the financial needs of cooperative through aggregate budget of the various units or department or division that make up cooperative.

The capital needs in cooperative incorporate thee need to solve certain problems militating the growth of cooperative. With this the cooperative society will look inward to see what is available, and how to source for fund internally and externally. Serious attention should be given to financial need of cooperative in terms of time, sources and economically feasible method of acquisition.

1.2 Statement Of Problem.

Statement of problem are problems to be faced in the means of sourcing for funds in cooperative. Since cooperative is an association of persons who have voluntarily joined together to achieve a common end through the formation of a democratically controlled business organization, making equitable contribution to the capital required, and accepting a fair share of the risk and benefits of the undertaken in which the members actively participate.

1.3 Objective Of The Study

The objective necessitated the importance of sources of funds opened to cooperative, and the study is significant in the sense that it provides the following:

  1. It contributes to the existing literature in sourcing for funds in cooperative.
  2. It determines how members contributes in sourcing for funds.
  3. It identify how cooperative societies are funded.
  4. To determine the prospect of sources of funds opened to cooperatives.
  5. To determine the impact of cooperative in sourcing for funds in Imo State.

1.4 Research Question.

  1. How can cooperative societies in Nigeria be funded?
  2. What are the roles played by members in funding cooperatives?
  3. What are the problems militating against cooperative funding?
  4. What benefits do a member derive in funding cooperative society?
  5. What are the sources of funds opened to cooperative societies?

1.5 Significance Of The Study

This study is very significant in nature, and tends to view how cooperative societies can be financed in Imo state, and Nigeria as a whole by proffering solution to the problem. The findings of the study also reveals the extent and level of sources of funds opened to cooperative societies.

1.6 Scope Of The Study

The scope of this research work is on identifying the critical review on the sources of funds opened to cooperative societies. However, the available and adequate facts obtained is within the research topic which is effectively utilized.

1.7 Limitation Of The Study

The limitation in this research work is as follows:

Lack Of Information:

In the area of information, the lukewarm attitude of the members of the selected primary cooperative societies to give out information that will enable the researcher to have a comprehensive due in identifying the sources of funds open to cooperative.

Financial Constraint:

If this research work has been extended to the entire nation, it will have taken a lot of funds in financing this research work.

Time Constraint:

This is another problem encountered, the time available to carry out this research work was extremely short and insufficient coupled with other academic commitment.

Environmental Problem:

This research work is limited to Owerri and its environment because of time and proximity to source.

1.8 Definition Of Terms

Cooperative Society:

Cooperative society can be defined as a business organization owned and operated by a group of individuals for their mutual benefits.


A fund can be defined as a money that is set aside for a particular purpose. It can be said to be a sum of money saved or made available for a specific purpose.


Sourcing can be defined as the strategic places where things originate from. This is the source where cooperative generates it funds from.


Finance is often defined as the management of money in an organization, while financing is the act of raising and using funds by individuals, cooperatives, firms and government organization.

Chapter Five

5.0 Summary Of Findings, Conclusion And Recommendation.

5.1 Summary Of Findings.

In this research work, a lot of findings have been observed, from the interview it was shown that cooperative societies can source for fund internally and externally respectively using some selected primary cooperative societies in Owerri, Imo state.

Also from the observation, it was revealed that unavailability of funds makes it impossible for cooperative societies to start up their activities in large production.

Furthermore, cooperative societies are faced with problems of collateral in borrowing from financial institution, lack of government support and dependency on government, low income earners among the members, most especially in the rural areas, lack of qualified or skilled personnel to handle or manage available funds appropriately e.t.c.

However, the sources of funds opened to cooperative societies also are numerous both internal and external source, and from this source they can map out the best that suits them, depending on level of establishment like secondary cooperatives would require huge amount of money.

5.2 Conclusion

To conclude this research work, it is clear and accepted that sources of funds opened to cooperative societies are so numerous. This is aimed at encouraging cooperatives as people organizations to avail themselves the opportunity of mobilizing venture capital acquisition, and building through the sources. The capital of the cooperative is subdivided into two namely fixed capital and working capital.

However, fixed capitals are for items like land, building, equipment, vehicles, business automation and other system e.t.c. The working capital on the other hand is capital for items like paying for deliveries of produce by members stocks of goods and payment of such.

5.3 Recommendation

So far the presentation, analysis and finding on this project has revealed most weakness of cooperative sourcing for funds. Most of these problems can be minimized or controlled by sound and swift response by the government.

  1. By increasing individual shareholding: By relating shareholding to the volume of business transaction.
  2. By giving an added incentive on additional shareholding in the form of a guaranteed or a high rate of interest as in the case with common stock companies.
  3. By increasing the minimum contribution i.e. by allowing long-term payment or accumulation out of patronage funds with a low initial cash contribution.

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