The Sources And Uses Of Funds In Cooperative Business Enterprises (A Case Study Of Acci Multipurpose Cooperation Society Ltd. Abuja)

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The Sources And Uses Of Funds In Cooperative Business Enterprises (A Case Study Of Acci Multipurpose Cooperation Society Ltd. Abuja)


Abstract


This study was carried out on the source and uses of funds in cooperative business enterprises using Acci Multipurpose Cooperation Society Ltd. Abuja as a case study. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of members of Acci Multipurpose Cooperation Society Ltd. Abuja. In determining the sample size, the researcher purposefully selected 70 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables. While the hypotheses were tested using chi-square statistical tool. The result of the findings reveals that cooperatives finance their business enterprises through members’ contributions, subscription fees, occasional charges, return on investments, and fixed deposits. The study also revealed that the funds generated are used for the development of the cooperative business enterprise. Furthermore, the funds generated are used for the expansion of the cooperative business enterprise. Therefore, it is recommended that on the area of finance, they should depend on themselves through mobilizing for economic transportation. They should increase their internal sources of fund like membership monthly dues, thrift savings, share capital etc.


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypotheses
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.0 Data Presentation
  • 4.1 Analysis of Data
  • 4.2 Answering Research Questions
  • 4.3 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Summary
  • 5.3 Conclusion
  • 5.4 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE 

Chapter One


Introduction

1.1 Background of the Study

Cooperative Societies have grown to be recognized as a powerful tool for fostering economic empowerment, particularly among women and other vulnerable and marginalized groups. They have continued to play important roles in the economies of many countries. In the Republic of Kenya, for example, cooperatives account for 45 percent of GDP and 31 percent of National Savings and Deposits. They control 70% of the coffee market, 76% of the dairy market, 90% of the pyrethrum market, and 95% of the cotton market. Cooperatives directly and indirectly employ almost a quarter of a million people in the country. Agricultural cooperatives in South Korea have approximately two million farmers as members, accounting for around nine-tenths of all farmers in the country, with an annual production of USD 11 billion (Todaro, & Smith, 2019). Approximately one billion individuals are active in cooperatives in some capacity, either as members/customers, employees/participants, or both. Globally, cooperatives employ at least 100 million people. Cooperative societies are expected to provide a living for roughly half of the world’s population. The combined earnings of the world’s 300 largest cooperative societies are USD 1.6 trillion, which is similar to the GDP of Spain, the world’s ninth largest country (Todaro, & Smith, 2019).

A cooperative society is the voluntary gathering of persons with similar interests with the goal of meeting members’ mutual economic or social needs. Members benefit from one another’s ideas, abilities, skills, and energy by combining their efforts. In this way, they are able to do things that they could not do as well (or at all) on their own in areas like as production, marketing, distribution, thrift, education, and so on. According to the International Cooperative Alliance, a cooperative society is an independent organization of people who have come together freely to achieve their shared economic, social, and cultural needs and goals through a jointly owned and democratically controlled company (Skipper, 2017).

Prior research has concentrated on determining the worth of cooperativism in regions. Cooperatives are seen to be crucial for the development and expansion of territories because they have an influence on the creation of jobs in underserved areas, on meeting new social demands that react to groups at risk of social exclusion, and, in short, on the promotion of social capital. In the same manner, the cooperative-related institutions and groups, always contain references to this component in their reports. Following the release of the most recent report of the Federal Government of Nigeria, cooperatives are emphasized as essential local private sector actors under the following concepts: “Cooperative companies are a wonderful match with the EU2020 agenda, which aspires for a sustainable economy that prioritizes people and responsibility while fighting exclusion and transitioning to a green economy hence the need for funds for cooperative firms (Otto, & Ukpere, 2015).

Both governmental and non governmental have driven financial sustainability and integrated community development among funds in Nigeria. in the process the study examined the extent to which sources and uses of funds in cooperative business enterprises have resulted in an economic, social and political empowerment. Funds are generally considered to be at the lowest rung of the poverty ladder in Nigeria, the study extrapolated the effects of funds on the mitigation of poverty. This helps us to know the implication of financing cooperative capital in an economic activities and enterprises. The theoretical bases of analyzing funds is because of the low economic status in Nigeria society. There is a general likelihood that the financing approach is targeted at women. This approach from the Nigerian perspective was realized and tested and selected in three micro finance (1) Non – organization (2) Government assisted micro finance organization: Country Women Association of Nigeria (COWAN), the Peoples Bank of Nigeria and Family Economic Assistance Programmes. The latter two are both federally operated institutions of the government of Nigeria aimed at providing credit to those who ordinarily would not get them and by so doing raise their economic status and help to eliminate poverty. The proposition of funds are:

There a direct relationship between microcredit availability and economic development

  1. There is a direct relationship between microcredit and women empowerment in Nigeria
  2. The availability of microcredit facilitates income generating activities among people and contributes to their increased standard of living.
  3. There is an association between microfinancial institutions and the development of financial sustainability among Nigeria women and
  4. That microfinancial institutions are directly associated with women leadership development in Nigerian.
    It has been reported that at an international conference in 1998, “donors and governments renewed their commitments to advancing women regenerating environmental resources and providing sustainable livelihood for all”. The contention is that micrfinance is at the core of each of these three goals. This is because microfinance provides the means to generates income that eventually leads to a sustainable development. Funds constitute and provide the drive to develop a “broad access” to the financial resources to the poor in order to provide the basic requirements for sustainable development.

1.2 Statement of Research Problem

The importance of funds to any business enterprise, be it private or public, cannot be overemphasized. Co-operative societies need funds to finance their fixed and working capital, to pay for services and for making interest-yielding investments. Lack of funds has featured prominently among the key constraints to co-operative business enterprise in Nigeria even at normal times. We can then imagine, or rather, we are all aware of, the situation under the prevailing excruciating business climate in Nigeria. Other scholars and policy analysts have identified the inhibiting factors that make micrfinance enterprises unsuccessful. Yaron identified “high risk” “heavy transaction costs”, and “mounting loan losses” as some of the many factors that drained state resources and the consequently have failed to provide financial self sustainability. The problems that have faced in Nigeria is that it has always included social welfare projects which divert attention from financial sustainability to welfare issues, Lack of collateral as demanded by the lending institutes, Poor accounting and record keeping, Lack of credit worthiness in the estimation of potention lenders, High interest rate structures, Problems created by the peculiarities inherent in the nature and structure of cooperative principles, legislations and regulations, The rank and file of most cooperative societies in Nigeria are not knowledgeable enough to explore the available opportunities that can expand their ability to borrow, extend credit and invest money, Problem associated with low membership size and general poverty of the members of cooperative, Management of cooperative societies in Nigeria often are not able to conceive bankable projects.


1.3 Objectives of the Study

The purpose of this study is to review and appraise the source and uses of funds in cooperative business enterprises of Nigeria situation. They are:

  1. To identify the sources of funding cooperative business enterprises.
  2. To identify those areas, funds can be of importance to cooperative business enterprise
  3. To see the extent sources and uses of fund has helped cooperative business enterprise in Nigeria.

1.4 Research Question

  1. How does cooperative finance their business enterprises in Nigeria?
  2. Are the funds generated used for the development of the cooperative business enterprise?
  3. Are the funds generated used for the expansion of the cooperative business enterprise?
  4. What is the extent at which sources and uses of fund has helped cooperative business enterprise in Nigeria.

1.5 Research Hypotheses

  • H01: The funds generated are not used for the development of the cooperative business enterprise.
  • H02: The funds generated are not used for the expansion of the cooperative business enterprise.

1.6 Significance of the Study

The research will help to find out the achievement made by sources and uses of funds in cooperative business enterprise and also assist researchers on how best to promote cooperative. his study will also help to ascertain whether the sources and uses of funds its aim or not. This will help to limit the lack of access of capital. This study generate income that eventually leads to a sustainable development. The availability of facilitates income and contribution to their increase in standard of living. Banks helps to increase significantly household incomes, productivity, labour force participation, and rural wages thereby reducing the level of absolute poverty. Creating significant income and employment opportunities for the poor in developing countries. Promoting self sufficiency Raising their economic status. Empirically, the study will ad to the general body of knowledge and serve as a reference material to student and scholars who wishes to conduct further studies in related field.


1.7 Scope of the Study

The research intends to theoretically expose the sources and uses of funds in cooperative business enterprises of Nigeria situation and also to find out the problems that hindens the sources and uses of funds in Nigeria situation. The study is however delimited to Acci Multipurpose Cooperation Society Ltd. Abuja


1.8 Limitation of the Study

This research project, like all human endeavors, had some challenges that threatened to derail the study’s completion. One of the reasons is that the time allotted for this work was so limited that the researcher did not have enough time to complete the task thoroughly. During data collection, the researcher also had to put forth extra effort to understand the respondents’ interview schedules, several of whom fell into the incomprehensible age group. Also, there were financial and transportation constraints to deal with. Insufficient funds tend to impede the efficiency of the researcher in sourcing the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, interview).


1.9 Definition of Terms

Cooperative means a voluntary association of free and independent persons: for the betterment of their economic conditions.

Financing

Is the act of raising and using of funds by individuals, cooperatives, firms and governmental organizations for the day today operations, running and management of a business undertaking.

Business

Buying and selling trade

Enterprise

Carrying out private or government control of commerce and industry


1.10 Organisations of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, abnd selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings onthe source and uses of funds in cooperative business enterprises using Acci Multipurpose Cooperation Society Ltd. Abuja as a case study. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was on the source and uses of funds in cooperative business enterprises using Acci Multipurpose Cooperation Society Ltd. Abuja as a case study. The study is was specifically carried out to; identify the sources of funding cooperative business enterprises, identify those areas, funds can be of importance to cooperative business enterprise, and the extent sources and uses of fund has helped cooperative business enterprise in Nigeria.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were members of Acci Multipurpose Cooperation Society Ltd. Abuja.


5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

  1. Cooperatives finance their business enterprises through members’ contributions, subscription fees, occasional charges, return on investments, and fixed deposits.
  2. The funds generated are used for the development of the cooperative business enterprise.
  3. The funds generated are used for the expansion of the cooperative business enterprise.
  4. The extent at which sources and uses of fund has helped cooperative business enterprise in Nigeria is high.

5.4 Recommendation

The researcher considers it necessary to make the following recommendations to reduce issues encountered by co-operative and to ensure viability and growth.

  1. On the area of finance, they should depend on themselves through mobilizing for economic transportation. They should increase their internal sources of fund like membership monthly dues, thrift savings, share capital etc.
  2. The leaders should also ensure adequate accountability with respect to fund handling.
  3. Government should try to aid co-operative through provision of grants and modern equipment.
  4. The societies should repay their loan properly to ensure adequate credit worthness
  5. Public awareness of co-operative, incentives should brings more membership
  6. Co-operative organization should organize massive education and orientation for both members and staff of co-operative.
  7. Device like films, visitations should be providing to impact adequate knowledge.
  8. Middlemen should be eliminated and co-operative shops used as distribution center only.
  9. Leaders should try to hold general meeting at least once every month to know the needs of the members.
  10. Viable marketing system should be provided to help increase return

The Sources And Uses Of Funds In Cooperative Business Enterprises (A Case Study Of Acci Multipurpose Cooperation Society Ltd. Abuja)


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