Financial Management And Survival Of Cooperative Societies In Nigeria (A Study Of Yaba College Of Technology Cooperative Society)

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Financial Management And Survival Of Cooperative Societies In Nigeria (A Study Of Yaba College Of Technology Cooperative Society)


Abstract


This research tends to examine Financial Management and Survival of Cooperative Societies in Nigeria with special reference to Yaba College of Technology Cooperative Society.

The research employed survey research design. Data were sourced majorly by primary means, the data were gathered with the aid of a well structured questionnaire. A sample of sixty (60) was drawn from the staff of Yaba College of Technology Cooperative Society.

The data gathered were presented on table using percentage. The formulated hypothesis was tested and resulted to rejecting the null hypothesis and concluding that Cooperative societies can only survive with efficient financial management.

From the findings, it was discovered that cooperative societies fund can be effectively managed if the necessary tools required for proper financial management are put in place. It was also deduced that the funds generated can be monitored by keeping adequate financial record.

Analysis also shows that contributions of cooperative help in improving the standard of living of the members and this really explained the relevance of cooperative societies to the Nation at large.


Chapter One


Introduction

1.1 Background of the Study

Cooperative Societies are found throughout the Word. They are found in capitalist countries, in socialist countries as well as in countries described as mixed economist existing and functioning as an integral part of the whole economy. The history of cooperative society could be traced as far back as the dark-ages when they used to exist and still in existence; Esusu, Aro e.t.c in Nigeria. Onyemachi(l983) said the history of modem cooperative could be traced to 1844 in Rockdale Concashine in England. He said it was on as October 1844, that the society was registered under the same name; The Equitable Society of Rockdale.

In starting a cooperative society, a number of at least ten persons is required in the case of primary society and for secondary society to be registered, it must has primary societies as it members, that is made possible by the Nigerian Cooperative Society Decree 90 of 1993.After registration, the duties and privileges of a registered society is expected to be presented with the registration application, this power and privileges are made in form of by-law which will have all necessary and desired regulations which dictates the code of conduct of its activities in line with the purpose of its establishment. Cooperative society is the commercial effort by people living in a community engaged in same trade, occupation or effort at assisting one another to improve on their economic output through the contribution of money into a common pool which is then distributed according to their pre­determined sharing formula.

Cooperative Society could also be defined as the voluntary organization of consumers into a society, controlled as possible for the purpose of supplying their immediate needs by observing definite and generally accepted rules of action. The international Labour Organization(ILO) defined cooperative society as “an association of person usually of limited means who voluntarily, democratically come together to achieve a common economic and social objective of its members by making equitable contribution to the capital required and accepting a fair share of the risks benefits of the undertaking”. As can be seen from the definition above member of cooperative society must join voluntary i.e without any coercions or force but should join by their own volition and willingness, the cooperative favours the doctrine of equal rights, benefits and opportunity for all vested in a management committee or board of directors but in the general meeting of members.

All members of cooperative pursue identical society and economic interest to achieve a common goal and such, all members share in risks and benefits, benefits in the form of patronage rebate i.e a share of surplus and risks by forfeiting the capital contributed in event of winding up. Equitable contribution that does not permit overwhelming percentage of the total is required i.e just reasonable and modest contribution by all members. All over the world, cooperative society could be in form of agricultural cooperative, marketing cooperative, consumer cooperatives, fishermen, artisan, informal, thrift and credit cooperative.

For the purpose of this study, the financial management and survival of cooperative society in Nigeria with respect to Yaba college of Technology as a case study is studied and examined.


1.2 Statement of the Problem

This research work is channel towards exposing the problem facing the management and survival of cooperative society. Cooperative Societies spring up day in day out in Nigeria but many of them do not stand the test of time due to one factor or the other. Also, cooperative society without the legal backing of the organization or institution of its existence die as a result of transfer, death, corruptive attitude, insolvent state, retrenchment and other of the financial members. The purpose of cooperative societies in many organization today are deviating from the instituted reason of the establishment. Also, most of the cooperative societies are not in accordance with the stated recommendation, rules and regulations that established the concept. Today, as a result of restructured of financial banks in Nigeria caused a lot of mergers amongst banks and the place of communities banks were nearly eradicated. They also were to follow a set of procedure in affiliation with one commercial bank. Activities of some of them now is synonymous with the idea and practice of cooperative societies with respect to their daily, weekly and monthly donations of individual or retailers and wholesalers. The question is that “Is present Microfinance Banks the same with the initiated cooperative society or taken over its functions?” There is need to differentiate and compare their activities, roles and functions in societies in relation to the past and present.


1.3 Objective of the Study

The objectives of this work include;

  1. To analyse the financial management of the available funds in the account of cooperative society.
  2. Examine the Strategic allocation of both excess and idle fund. Identification of debt recovery step component and procedures.
  3. To do an analysis of various sources of funds of cooperative societies.

1.4 Research Hypotheses

Hypotheses One
  • Ho: Available funds are not properly managed in cooperative societies
  • Hi: Available funds are properly managed in cooperative societies
Hypotheses Two
  • Ho: Corporative societies cannot survive without proper management of funds
  • Hi: Corporative societies cannot survive without proper management of funds

1.5 Significance of the Study

The concept of financial management became more prominent because it is assumed that the cooperators so much trust themselves without considering the sophistication in the economy and its implication on their funds. This study is channeled towards exposing the relevance of cooperative society to the members as well as to the society at large. It will be of relevant to the existing cooperative societies the necessary protocols, procedures and doctrine of cooperative society. Some members of the society are not aware of their right with respect to their contribution as well as interest on their contribution. This will help majority at large about the formation of cooperative society processes and change their crude methods and unethical means of money collection. It will also help people to be aware of the minimum and maximum percentages of interest the members should be charged with respect to the amount borrowed and systematic way of refund.


1.6 Scope and Limitation of the Study

This study is primary concerned with financial management and survival of cooperative societies in Nigeria. This study/project work covers Yaba College of Technology Cooperative Society. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.


1.7 Definition of Terms

By-law:

This is the law by a society members in the exercise of the power conferred by decree 90 of 1993 of cooperative society law.

Committee:

This is the governing body by whatever name called of a registered societyto which the management of its affairs is entrusted

Cooperators:

These are person(s) or registered society join the application for registration of a society.

Secondary Society:

This is the registered society established to facilitate the operations of society in accordance with cooperative principles.

Dividend:

These is the share of profit of members of a registered society divided among its members in proportion to the share capital held by them.

Executives/Officers:

These are the people empower under the regulation or bye- laws to give directions in regard to the activities and management of a registered company.

Arbitration:

The settlement of dispute by the decision of a person(s) chosen as judge.


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  1. Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  2. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  3. Chapter three deals on the research design and methodology adopted in the study.
  4. Chapter four concentrate on the data collection and analysis and presentation of finding.
  5. Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain a critical analysis of financial management and survival of cooperative societies in Nigeria.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of poor financial management in cooperative societies.


5.2 Summary

This study aimed at having a critical analysis of financial management and survival of cooperative societies in Nigeria. Three objectiveswere raised. These objectives include: To analyse the financial management of the available funds in the account of cooperative society, examine the Strategic allocation of both excess and idle fund, identification of debt recovery step component and procedures, to do an analysis of various sources of funds of cooperative societies.


5.3 Conclusion

Based on the above findings pertaining to the objectives of the study the following conclusions are drawn.
it was discovered that cooperative societies fund can be effectively managed if the necessary tools required for proper financial management are put in place. It was also deduced that the funds generated can be monitored by keeping adequate financial record.

Analysis also shows that contributions of cooperative help in improving the standard of living of the members and this really explained the relevance of cooperative societies to the Nation at large.


5.4 Recommendation

The following recommendations were advanced from this study:- The Yaba College of Technology Cooperative Society should have a vibrant regulator that will ensure clear financial policies and standards are in place. This is because most Yaba College of Technology Cooperative Society members emphasize more on profits and therefore the need to have a body that will ensure the Yaba College of Technology Cooperative Society reports the correct profits.

Yaba College of technology cooperative society should have ways to benchmark their financial management policies, with those that are performing well in the sectors in order to borrow the best financial practices that will ensure better financial results for the individual Yaba College of Technology Cooperative Society and the entire sub sector.

Government should implement policies that will give incentives to Cooperative Society that have the best financial management policies. This will help spar growth in this sector since this will go well to promote better management of Cooperative Societies that translate to better profits.

Members ofYaba College of Technology Cooperative Society should interrogate the financial management practices of their Cooperative Society and be cautious of any policies that will be against the growth of the financial results of their institution.


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