The Role Of Federal Government In Cooperative Financing In Imo State (A Case Study Of Selected Rural Based Cooperative Societies In Ikeduru Imo State)

Project and Seminar Material for Economics

Project and Seminar Material for Economics


This work investigated the Role of federal Government in cooperative Financing. The primary method of data collected from cooperative societies was used for their study. In the analysis table and simple percentage were used.
This work recommended that the federal government should put in more effort or ensure that loans are given to farmers/cooperative in the country without much bureaucracy, and that government should create a specialized bank for the running of the cooperative or the strengthening for existing Nigeria agricultural cooperative and rural development bank ( NACRDB).

This work reveals that the government shall recognize and respect the autonomy and operational independence of the co-operative sector/promote creation of national co-operative financing agency to provide financial backing.

Chapter One


1.1 Background Of The Study

The choice of this topic; the role of federal government in co-operative financing cannot be over emphasized at the present economic situation of the country.

This is because of the fact that the issue of co-operative financing has reached all the nook and crannies of Nigeria. The past and present regime emphasized on the best way of encouraging co-operative development. Though this does not mean that the best needs for co-operative development have been achieved.

According to IJERE (1970) rural and co-operative development have strategies and plans to help improve the living standards of the rural population. Development and economic growth are essential to determine the standard of living both the rural and urban dwellers. We cannot talk of development and growth in Nigeria economy without mentioning the development of our rural areas. Neglecting the development of the problem half. We should be wise enough to extract the experiences gained from countries like China, Malaysia, Israel, Tanzania, and some of the Asian tigers. Which have yielded a great deal of success in those countries. Our guest and enthusiasm towards the development of our rural co-operative base in panacea to the Nigerian economy. A well planned rural development is the answer to rural centers.

This will also create awareness and increase in the economic standard of the rural population and it eliminates such plagues as ignorance, poverty, poor standard of living and general backwardness associated with the underdevelopment.

This issue of infrastructural development which is pertinent to co-operative development will include our rural dwellers as long as the rural areas are not developed and one imagines what life would be like without electricity, pipe born water, good roads, net work facilities viewing centers and others.

According IJERE (2005) co-operative is a very wide one, it has two main branches that is owned and borrowed what belongs to you and what you set from another source. Owned capital is constituted with by share and reverse mainly. While external finding comes outside co-operative complex.

Co-operative movement the greatest impediment to a dynamic co-operative movement in Nigeria once we get it right, every other thing falls in place.

Finance they say is the act of raising funds and using of funds by individuals, co-operative firms and government organization for the day to day operation, running and management of business undertaking.

Finance is the life line organization be it profit oriented or welfare/ religious organization. Finance concerns itself with sourcing acquisition and utilization of fund in organization need to raise funds for it to effectively and efficiently deliver its goal.

Even though co-operative de-emphasizes the role of capital, it is now ever needed seriously for the society to grow.
In discussing co-operative finance we have to distinguish between two types of capital namely:

I. Fixed Capital:

This is funds used in acquiring moveable assets like land, buildings and machinery equipments and offices, fittings etc. it is capital “SUNK” or “LOCKED UP” and cannot consequently be recovered easily within a short period of time.

II. Operating / Working capital:

This is the money needed to keep the co-operative going as a business concern.

1.2 Statement Of The Problem

Co-operative has always been the subject of critic from the general public about the role to play in the socio-economic life of the populace. Our issue of rural development is the same. In many of our rural areas people have always heard of civilized government and its agents of being partial in the provision of social amenities being responsible for the present rural, urban migration causing poor standard of living in the country.

We all know quite well that over 80% of agricultural activities are done in the rural areas, in the villages farmers complain of the un-availability of some essential commodities (pipe born water, electricity and roads) credit facilities such as loans from banks are inadequate. Co-operative societies lack financial inclusion in the federal government budget. Most co-operatives have no access to financial institutions and all this factors hinder co-operative growths.

I.3 Objective Of The Study

The broad objective is to examine the role of the federal government in co-operative financing in Imo State.
The specific objectives are:

  1. To ascertain how the federal government finances the activities of rural based societies is Imo State.
  2. To determine government policies which aid to promote co-operative development in Nigeria?
  3. To examine how managers of co-operatives efficiently use grants, loans, gift from the federal government.
  4. To find out whether co-operative have access to financial institutions.

1.4 Research Questions

The following research questions are passed as likely solution to the problems if well addressed.

  1. How much loan has federal government disbursed to rural based co-operative societies in Ikeduru L.G.A?
  2. Is there any problem facing co-operative financing in Ikeduru L.G.A?
  3. Does the federal government contribute in financing rural based co-operative societies in Imo State?
  4. Does the loan provided by the federal government attract higher or low interest rate?
  5. Are co-operative societies in Ikeduru adequately funded by the government?

1.5 Significance Of The Study.

In this study, the researcher has set out to examine the role of federal government in co-operative financing in Imo state.

This study is expected to rekindle their interest more and they will take note of various recommendations mentioned and that will help the government towards forming a sound financial institution that will help the development of co-operative and rural areas at large.

This study will also serve as literature to individuals or co-operative bodies who want to carry out further research on the role of federal government in co-operative financing.

1.6 Scope Of The Study.

In this study, the entire population in Ikeduru L.G.A, is 21,000 people from research I carried out, the co-operative societies in Ikeduru lack finance in their co-operative businesses and they have been able to do well or bring what is reasonable in their agricultural product.

  1. Provision of basic amenities for the effective transportation of the product of the urban area.
  2. Organizing workshops and seminars for co-operative members
  3. Farm tools, machineries are needed for productivity.
  4. It should make it easier for co-operative societies to obtain credit.

1.7 Limitation Of The Study

The limitations encountered in the course of carrying out this work include financial constraints, insufficient time. The unwillingness of respondents to give the researcher adequate information needed to carry out the research work.

1.8 Definition Of Terms

Co-operative society is an economic institution which within the existing system of free competition aim to correct wholly or partly the natural imperfection of the distribution of wealth.


The term financing in this contest means monitoring of loan to rural farmers.


means functions, assistance or helping hand rendered to somebody or something.


People in charge of a group of people in the state or country.


Means a place or village where people live and they are specialized in agriculture. Also a place where people live with little or no basic amenities.

Chapter Five

5.0 Summary Conclusion And Recommendation

5.1 Introduction

This summary gives conclusion and recommendations of the study conducted by the researcher to examine the role of federal government in cooperative financing.

5.2 Summary Of Findings

From the forgoing it has been deduced and stated that cooperative is relevant in rural development. Simply put, cooperative is seen as a force that compels its workers member for effective and efficiency in their work and also seek for the interest as well as protect them from the exploitation.

The oral interview and documents used in this researcher study touched on some crucial problem facing cooperative development in Nigeria, notable are;

  1. Lack of finance
  2. Lack of technological know how
  3. Mismanagement of funds and fraud
  4. Lack of probity and accountability
  5. People seeing government loan grants as national cake.

5.3 Conclusion

In conclusion of this work it should be pointed out that the federal government has an important role to play in cooperative financing. Therefore for any country to make a progressive drive, cooperative development and have a reliable agricultural project through which the national income of the country can grow. Moreover, this study has shown the best measure to promote cooperative development and ensure a substantial economic to work out more methodology and more reason for financing cooperative projects in Nigeria as a whole.

5.4 Recommendation

From the researcher’s observation the following recommendations are made,

  1. The federal government should put in more effort on ensuring that loans are given to farmers, cooperatives in the country without much bureaucracy.
  2. Creation of a specialized bank for the running of cooperative or the strengthening for existing Nigeria agricultural cooperative and rural development bank (NACRDB).
  3. They should advice any of the federal owned financial institution that it is their duties to ensure that the loans they are given to the customers are not diverted to some other projects rather the said cooperative project.
  4. Appointment of an auditor by the government to check the stand of financial statement of cooperative.
  5. Education, seminar, workshop and training of cooperative members, employees and general public.
  6. I will also suggest that the federal government should endeavor to hand the federal government financial institution to obtain loans from the international bodies comfortably without any financial difficulty.

Finally, research believes that if the above suggestions are implemented or followed properly, these will be a progressive drive in areas of cooperative development in Nigeria.

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