Poverty Alleviation Through Cooperative Movement (A Case Study Of Ogbe Ahiara Microfinance Bank Limited, Ahiazu Mbaise, L.G.A.)

Project and Seminar Material for Cooperative Economics and Management (CEM)

Poverty Alleviation Through Cooperative Movement (A Case Study Of Ogbe Ahiara Microfinance Bank Limited, Ahiazu Mbaise, L.G.A.)


Against the background of high and increasing incidence of poverty in Nigerian, it is a known belief that lack of employment and empowerment of the poor and low capacity utilization in the nation has been attributed to the neglect of small and medium scale industries as well as cooperative in not given a proper framework to guide its operation.

With the activities of microfinance and cooperative organization which geared towards empowerment of small and medium scale business as well as poor people, If microfinance leverage is given to cooperative organizations, they will expand their business, stimulate local economic growth, resulting in fast economic development.

This research work is divided into five chapters, the overview of the study, the statement of the problems, purpose, limitations, scope, objectives, Significance of the study were treated and the terms used were also defined.

Chapter two into review of past related works in order to establish the existence of a knowledge gap to which this study is focused.

Chapter three focused on the research design and methodology, in chapter four, the data were presented, analyzed and interpreted. Finally chapter five highlighted the summary of the findings and also draw conclusion and give some recommendations on the study.

Table Of Contents

Preliminary Page(s)

  • Title
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Contents

Chapter One

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 The significance of the study
  • 1.7 The scope of the study
  • 1.8 Limitation of the study
  • 1.9 Definition of terms

Chapter Two

2.0 Literature Review

  • 2.1 Concept and background of microfinance
  • 2.2 Microfinance Defined
  • 2.3 Objective of the Microfinance institution
  • 2.4 Operations of the microfinance banks as means of poverty alleviation
  • 2.5 Justification for the establishment of microfinance banks in Nigerians.
  • 2.6 Instruments and measures used in poverty alleviation by microfinance Banks.
  • 2.7 What is a cooperative society?
  • 2.8 Microfinance and cooperative as framework for development.

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 The population of the study/sample size
  • 3.4 Sources of data collection
  • 3.5 Method of data analysis
  • 3.6 Validation of Research instrument

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Data presentation, classification and calculation.
  • 4.3 Analysis of Data to test of Hypothesis
  • 4.4 Analysis of Data to test of Hypothesis
  • 4.5 Interpretation of Result/Conclusion.
  • 4.6 The Statistical Data of loans given out by the OAMB

Chapter Five

5.0 Summary of Findings Conclusion and Recommendation

  • 5.1 Summary of findings
  • 5.2 Conclusions
  • 5.3 Recommendation
  • 5.4 Area of further study
  • Bibliography
  • Appendix

Chapter One

1.0 Introduction

1.1 General Overview Of The Study

Poverty alleviation until recently has been the first challenge which the microfinance institution faced. An estimated US $4 billion is invested annually on microfinance around the world. Robus economic growth cannot be achieved without putting in place well concentrated programmed to reduce poverty through empowering the people by increasing their access to factors of production especially credit. CBN microfinance policy framework (2005: sal).

Microfinance is relevant to the cooperative enterprises by interven(ing) directly to them though some people are not so sure of this, and called microfinance โ€˜a rather blunt toolโ€™ for achieving the millennium development goals. The connection between microfinance and poverty alleviation is indeed considered straight forward within the microfinance industry of the eight (8) millennium development goals, microfinance is mainly assume to be directly related to goal number one which aim at eradicating extreme poverty and hunger.

Although success stories such as the grameen bank in Bangladesh and the Indonesians bank Rakyat have been widely used as evidence of the impact of microfinance on poverty reduction. The link between the two may not be that direct. The current debate is that microfinance benefits the less poor and that the poorest who are implied in the MDGS rarely benefit from microfinance.

1.2 Statement Of Problems:

There is concrete evidence that microfinance helps in achieving the cooperative enterprises goals. However I think it would be fools paradise to believe that microfinance alone will so. What microfinance can achieve is the reduction or eradication of extreme poverty and hunger. Hence there are some lingering problems which present its optimal operation, they include:

  1. Lack of appropriate framework and confidence in the enterprises.
  2. Lack of well defined operations and resolved regulatory/supervisory requirements
  3. High rate of interest
  4. Corruption among the high officers of recovering institution
  5. Poor management consultant of some microfinance scheme
  6. Some microfinance institution targets a segment of the population that have no access to business opportunities.

2.3 Objective Of The Study

Having identified the problems militating against the development of microfinance banks in carrying out their work effectively towards poverty alleviation. The objective of this study then include.

  1. To identify the areas of operations of microfinance bank in the state.
  2. To identify the strength and weakness of microfinance banking system in poverty alleviation.
  3. To find out how microfinance bank can help to alleviate poverty in Nigeria.
  4. To find out the relevant of microfinance bank in poverty alleviation and rural transformation.
  5. To make policy recommendations based on the findings.
  6. To identify possible strategies to adopt in order to enlarge the pool of micro credit facilities for the poor through partnership with the stakeholders.
  7. To find possible strategies to make financial service accessible to a large segment of the cooperative enterprises with no access to financial service.
  8. To promote linkage programmes between universal development and specialized institution and microfinance banks.

1.4 Research Questions

Based on the objectives as well as the problems, statement of the study, this research question are:

  1. How can microfinance banks help to alleviate poverty in Nigeria?
  2. Do Microfinance activities have any effect on cooperative business productivity?
  3. How do cooperatives receive their microfinance services?
  4. Do microfinance banks give or extend credit by proxy?
  5. Is there any hard evidence that microfinance can help to achieve the enterprise goals as well as the Millennium development goal?
  6. What are the objectives of the microfinance activities?
  7. What do you think are the weakness of the microfinance banking system in poverty alleviation?
  8. Do you think that the launching of the microfinance policy will achieve its intended objective especially in cooperative movement?

1.5 Hypothesis

  • HA: The microfinance service has contributed to the growths and development of the Nigerian Economy.
  • HA: The Microfinance Banks serves as a catalyst for the provision of micro-credit for economic development
  • HA: The Microfinance activities have an effect on cooperative business productivity.

1.6 Significant Of The Study:

This study will go a long way in helping people that is the potential productive people who want to wriggle out of poverty and who have the interest of the poor at heart as well as the betterment of the economy. It will be a great importance for those who have the cooperative business as a good factor of living. As such;

  1. This work will enable the reader to realize the role of microfinance in poverty alleviation.
  2. It will ginger the members of the cooperative enterprises who have been looking for a way out of poverty to do so with dignity.
  3. It will give a specific detail of the activities of microfinance institutions i.e. how loans are given out and the interest rate and also the conditions for the loans.
  4. It will go forth to distinguished microfinance banks from commercial banks.
  5. From this study, students shall derive pleasure when researching in future in similar topic

1.7 Scope Of The Study

The study covers the Ogbe Ahiara Ahiazu Mbaise L.G.A. Imo state. It will also examine the regulatory body of microfinance institution in the country (Nigeria)

1.8 Limitations Of The Study:

There were some constraints experienced in the course of this study which hindered the maximum achievement intended in this study such as:

  1. Financial constraint
  2. Poor experimental design.
  3. Poor questionnaire returns.
  4. Inadequate/non representative sample.
  5. High rate of literacy of the respondents.
  6. Time constraints.
  7. Poor attitude of the respondents.

1.9 Definition Of Terms:

Microfinance Institutions:

These are the institutions that provides microfinance services to the low income groups e.g microfinance banks


This is the provision of wide range of financial services such as loans, deposit, insurance etc to the poor who are traditionally not served by the conventional banks.

Micro Credit:

This refers to small packaged loans provided to the poor to enhance their capacity to engage in productive activities


This means making an unpleasant conditions or suffering or pain less or reducing it.

Cooperative Business Enterprises:

This is a business or organization which is owned and managed by the cooperative societies, they share its benefit and profit.


Tt is a form of business organization which involves the coming together of individuals who have the same socio-economic problem, who then pool their resources together in order to help solve the problem.

Chapter Five

5.0 Summary, Conclusion And Recommendation

5.1 Summary

Regardless of the challenges that face the industry such as barrier to reaching targeted people and the misappropriation of the funds. The microfinance banks as been striving hard to provide the right atmosphere for the economy to develop greater technology capability for raising financial services.

  1. An estimated N106.2m was invested by the Ogbe Ahiara Microfinance bank to various sectors of the economy between the year 2002 and 2008. Within these years, 29.3m was given to cooperative societies, 13.4m to low income household, 13.1m to low income groups, 21.7m to Artisans and 28.7m was given to agricultural sector (low income farmers).
  2. Evidence of the field support the view that microfinance provide a valid contribution to the achievement MDGs particularly the first three MDGs which are eradication of extreme poverty and hunger, achieving universal primary education and promoting gender equality, it has the ability to intervene directly at the household level, bringing tangible improvements in the conditions of life in rural as urban and sub-urban areas.
  3. A survey of the staff and other beneficiaries uncovered the access to microfinancial services was effective to increase income, improve nutrition, provide better food intake, housing, consumption on clothing, health care and access to education for children, how child mortality, lower rate, high adoption of family planning practices etc.

5.2 Conclusion

As a key player in the achievement of the millennium number one goals, the microfinance has through the years provided the avenue and served as an intermediary, which enables the poor as well as the self employed to get small loans in order to reduce poverty, create employment and increase the productivity and income of small groups.
It is therefore pertinent at this juncture to conclude based on the analysis and findings that the microfinance institution has played a tremendous role in the development of the Nigerian economy.

5.3 Recommendation

Having meticulously gone through this research work, it becomes a pressing task to proffer some recommendations that if given some attention, has the tendency of moving the microfinance institution to the next level.

The development and continuity of the microfinance activities is essential for the development of Nigeria and to meet up with global trends. To this end, the microfinance institution in recent terms has evolved many strategies to enhance its services to availability of information and degree of network. This is critical for better decision making and understanding of market operations or credit reference system which would provide information on microfinance clients in order to minimize risk and also enable them to overcome the attendant moral hazards.

The successful implementation of management certification programme to address the technical skill gap for the delivery of a successful one in the future should be introduced due to the poor performance of the community banks and past microfinance institutions which is characterized by poor deposit mobilization, weak cooperate governance, inadequate internal controls. Unacceptable risk management practices, lax credit administrations and its resultant impact on their earning and erosion of shareholders funds.

There should also be a provision of sustainable in depended microfinance development fund. In order to meet the requirement of microfinance bank and they also provide technical assistance, credit insurance rating systems, micro credit research and support for MFโ€™s apex associations.

With more effects devoted to ensuring the sustenance of the above mentioned variables, there will be an economic revolution in Nigeria. The microfinance services will get more and more interesting in the years ahead as small, micro and machines business will find their way out of wood.

5.4 Areas Of Further Study

  1. Nigerian Micro-finance newsletters
  2. Post projects dealing on related matters.

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