The Viability Of Cooperative Societies As Business Organization In Ahiazu Mbaise Local Government Area Of Imo State

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

The Viability Of Cooperative Societies As Business Organization In Ahiazu Mbaise Local Government Area Of Imo State


Abstract


The objective of this research was to find out how cooperative societies in Ahiazu Mbaise local government area are viable in their business transactions. This research was to present a conceptual framework which can reflect the paradigm for the capability and viability of cooperative societies as a business organization. The study consists of 40 cooperative societies selected from the said local government area out of a population of 92 registered cooperative societies in Ahiazu Mbaise local government area.

It was found that cooperative societies are viable in some parts of the area and are not viable in some part pf the area in Ahiazu Mbaise local government area. Those not performing well were attributed to several problems facing their societies. These problems are poor funding which the major constraint to the viability of cooperative as a business organization, managerial incompetence, lack of basic infrastructure, lack of members’ education and members’ commitment, high level of illiteracy among the members, etc.

Those that are viable were attributed to the following; provision of proper education to the members to improve their various business activities, cooperative help members to improve their economic well being thereby raising their standard of living, few members of cooperative obtained government’s assistance and majority of the members have years of experience in cooperative.

This shows that many of the members know what cooperative is all about and the benefits of being a member. Cooperative societies in Ahiazu Mbaise local government area are profitable due to proper management and proper planning of the business, thus making cooperative as a business organization to be viable. Based on these findings, some recommendations were made.


Table Of Contents


Preliminary Page(s)

  • Title page
  • Certification
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problems
  • 1.3 Objectives of the Study
  • 1.4 Scope of the Study
  • 1.5 Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Limitation of the Study
  • 1.8 Definition of Terms

Chapter Two

2.0 Literature Review

  • 2.1 History of co-operative societies
  • 2.2 Definitions and meaning of co-operative movement
  • 2.3 Principle guiding the operation of co-operative societies
  • 2.4 A co-operative option
  • 2.5 Economic and social viability in societies

Chapter Three

3.0 Research Methodology

  • 3.1 Sources of Data
  • 3.2 The Population/sample size determination
  • 3.3 Sampling techniques
  • 3.4 Instrument
  • 3.5 Limitations to Data Collection
  • 3.6 Method of Data Analysis

Chapter Four

4.0 Presentation, Analysis of Data

  • 4.1 Presentation of Data
  • 4.2 Analysis of Data
  • 4.1 Test of hypothesis

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendations
  • Bibliography
  • Appendix

Chapter One


1.0 Introduction

1.1 Background Of The Study

The modern type of cooperative was introduced formally into Nigeria by the then colonial administration in 1935. The British colonial government had in 1904 introduced the cooperative movement in India, which was one of the British colonies then.

The same 1904 was the year the then colonial government in India enacted a cooperative law in India. Following the successes recorded in India, the British colonial government in Nigeria tried to experiment the introduction of cooperative in Nigeria.

The same year, 1935, cooperative movement in Nigeria was born. First step was taken by the then colonial government in Nigeria to enact the Nigerian cooperative societies ordinance.

Before the formal introduction of cooperative in Nigeria, there had been moves by various groups and individuals to organize what looked like cooperative societies. During the early nineteen thirties, the cocoa farmers in the Western part f Nigeria were organized in to small cooperative societies.

The initiative was taken by the then ministry of Agriculture. These cooperative societies could be described as the fore runners of modern agricultural cooperative societies. Though they used the name cooperative, they did not operate really under the cooperative principles as they were not guided by any cooperative law.

The colonial government tried to investigate the possibility and desirability of introducing the cooperative movement into their Nigerian colony. Thus, 1933, the government invited a cooperative expert, Mr. C. F. Strickland, from India and requested him to make an investigative tour of Nigeria and to advise the then Nigerian government on the desirability and possibility of Nigeria. Mr. C. F. Strickland carried out the investigation and submitted his report on the 17th April, 1934. In his report titled, “Report on the introduction of cooperative societies in Nigeria” he strongly recommended the introduction of the cooperative movement in the colony of Nigeria, maintaining that cooperative societies would help to improve the economic and social conditions of Nigerians and among others; the report was accepted by the government.

After the acceptance in 1935, the government enacted the first Nigerian cooperative societies’ law, while in 1936; regulations were drawn up to guide the running of cooperative societies. The Nigerian cooperative societies law was fashioned after the cooperative societies law operating in India, which was another British colony at that time. Cooperative cocoa societies started in the Western part of Nigeria. 1938, workers formed cooperative thrift and loan societies in the Eastern and Western parts of Nigeria.

In 1936, Major E. F. G. Haig was appointed the first registrar of cooperative societies in Nigeria. His legacy to the Nigerian cooperative movement thereafter, was nothing short of complete government control. Thus, control continued from the colonial time till date.

In 1937, Mr. J. U. Eka, was appointed as the first inspector of cooperative societies in Eastern Nigeria and he worked in Calabar province.

As soon as the cooperative movement was introduced into the country, it started to grow. By the end of 1944, there were one hundred and eighty one (181) cooperative societies in Nigeria.

The history of cooperative movement in Nigeria has been one of continuous growth. For better appreciation, it is grouped into three stages:

  1. The stage that describes the introduction or birth of the movement to the Rochdale centenary conference held in Lagos in August 1944.
  2. The stage that describes the regionalization of the movement in 1951 and
  3. The stage that describes the period of consolidation.

After the birth of cooperative in Nigeria, the Rochdale Centenary conference was held in Lagos starting from 8th August, 1944, for three days. The then registrar of cooperatives invited delegates from all the cooperative societies in the country to the conference.

The conference was formally opened by an address by His Excellency, Sir. Arthur Richard, the then Governor–General of Nigeria. The aim was to join British cooperators and celebrate the centenary of the first successful cooperative venture of the Rochdale pioneers.

Based on the above, one can safely ask does cooperative societies achieve all the set objectives?

  1. What are the impediments to the achievement of these objectives?
  2. How can cooperative societies stand firmly as business organization or as social organization or both?

The conduct of this research was motivated by the questions already posed whether or not cooperative societies achieve objectives with which they are set and if not, what are the obstacles that hinder the progress of these societies. In other words, are cooperative societies viable as business organizations in Ahiazu Mbaise Local Government Area of Imo state?

Based on the findings, the researcher will advance some recommendation that would lead to the improvement of the performance of these cooperative societies in the local government in particular and the society in general.

The researcher tends to find out ways cooperative societies are successful as other business organization. The success can be seen as providing functional education, social amenities, infrastructure, agricultural development, etc.

Cooperative however, has acquired technical and modern meaning. Modern cooperative movement is associated with the successful experiment of 28 weavers from Rochdale England who in 1844 established the first successful cooperative consumer society. Their success became widely acclaimed and their working principles were accepted and adopted as the basic principles were accepted and adopted as the basic principle of cooperative organization.

To this end, this study is geared towards finding out the viability of cooperative society as business organization in Ahaizu Mbaise Local Government Area of Imo state and find out those rodent that hinder the viability by finding out possible solution to ensure the growth of cooperative business organization.


1.2 Statement Of Problems

Business organization exists in so many forms and different capacities. Some business organizations are viable while some are not.

Can cooperative societies as business organization be said to be viable in Ahiazu Mbaise Local Government Area or not?

The non-viability of cooperative as a business organization depends on so many problems that confront the societies.

The researcher is intended to look into the following problems, the problems are; whether mismanagement hinder the success of cooperatives, inadequate financing of cooperative business, effect of illiteracy on the viability of cooperative as a business organization, wrong perception/opinion of cooperatives, aspects of cooperative acts and regulation and activities of competitors. These and other factors mentioned hinder the cooperative business from being viable.


1.3 Objectives Of The Study

The objectives of the include the following:-

  1. To determine the extent to which poor funding hinder the viability of cooperative
  2. To find out the effect of wrong perception of cooperative on successful execution of cooperative business.
  3. To determine whether or not some aspect of cooperative acts and regulation are inimical to successful cooperative business.
  4. To find out whether or not poor management of cooperative society obstruct the functioning of the society.

1.4 Scope Of The Study

This study will center on the problems of viability and the analysis of the viability of cooperatives as business organizations. The research will be limited to cooperative in towns located in Ahiazu Mbaise local government area.


1.5 Hypothesis

  1. Ho: Poor perception of cooperative do not constitute a major hindrance to cooperative being a viable business organization in Ahiazu Mbaise.
    Hi: Poor perception of cooperative constitute a major hindrance to cooperative being a viable business organization in Ahiazu Mbaise.
  2. Ho: Illiteracy do not constitute a major hindrance to cooperative being a viable business organization in Ahiazu Mbaise.
    Hi: Illiteracy constitute a major hindrance to cooperative being a viable business organization in Ahiazu Mbaise.
  3. Ho: Poor funding do not constitute a major constraint to viability of cooperative as a business organization
    Hi: Poor funding constitution a major constraint to viability of cooperative as a business organization.
  4. Ho: Cooperative societies in Ahiazu Mbaise local government area are not profitable.
    Hi: Cooperative societies in Ahiazu Mbaise local government Area are profitable.

1.6 Significance Of The Study

  1. It will highlight the level of cooperative development in Ahiazu Mbaise local government area and the society in general.
  2. It will eliminate doubt as to whether or not cooperative are of any significance to business development especially the case of Ahiazu Mbaise local government area.
  3. To individual investors and organization, it will provide a guide on how to invest a long cooperative business.
  4. To the government and policy makers, it serves as an aid on developing business environment.
  5. The information in this study will be of enormous help to individual and organization wishing to conduct further research in area of viability of cooperative enterprises as business organization not covered in this study.

1.7 Limitations Of The Study

The research limited the study due to some obstacles that militated against the smooth conduct of the survey. Which include the following:-

The researcher limited the study as a result of some financial ad tie constraints


1.8 Definition Of Terms

Operating / Working Capital:

This I money needed to keep the cooperative going as a business concern. Money required for purchase of goods, payment of wages, and overheads, current bills for telephone, gas, stationary etc, such capital is coming and going.

Internal Or Owned Fund:

Internal funding or woned capitals are resources (funds) which belong to the cooperative society. The right to use, the source and cost ar relatively free because it belongs to the cooperative society. This source of financing is very important in the life of the cooperative society.

Share Capital:

Share capital is money which an incoming member pays into the cotters of cooperative society. Share capital is paid at the beginning of the life of a cooperative or when an incoming member joins.


Chapter Five


5.0 Summary Of Findings, Conclusion And Recommendations

In this chapter, the researcher shall discuss his summary of findings, conclusions and give recommendations based on the findings of the research study carried out.


5.1 Summary Of Findings

The following constitutes the findings of this research:

  1. Poor perception of cooperative constitute a major hindrance to cooperative being a viable business organization.
  2. The effects of illiteracy on members constitute a major constraint to the success of cooperative business
  3. Poor funding constitute a major constraint to viability of cooperative as a business organization,
  4. The cooperative societies in Ahiazu Mbaise LGA are profitable due to proper management and proper planning of the business, thus making cooperative as a business organization to be viable.
  5. Cooperatives provide cooperative education activities.
  6. Cooperative help members to improve their economic well being thereby raising the standard of their living.
  7. Only few members of cooperative obtain government assistance.
  8. Majority of the members of cooperative societies in Ahiazu Mbaise are married and majority are men.
  9. The sizes of membership to cooperative societies are small and this will affect their capital mobilization.
  10. Majority have their age ranges between 41-50 years. This age brackets will affect their productivity and invariably their viability.
  11. Majority of the members have years of experience in cooperative ranging between 15-18 years. This shows that many of the members know what cooperative is all about, and the benefits of being a member.

Despite the success made so far, they still have some problems in their business transactions. These problems include lack of adequate capital, lack of governmental assistance, lack of competent managers, embezzlement of society fund and illiteracy of some members.


5.2 Conclusion

This study was carried out to find out the viability of cooperative societies as a business organization in Ahiazu Mbaise Local Government Area. The Main aim was to find out whether cooperative societies business in Ahiazu LGA are viable or not and if so, to what extent.

From the different research being carried out by the researcher, it could be pointed out that cooperative movement in Ahiazu Mbaise LGA are viable mostly in agricultural and agro- based societies. But it does not mean that other societies do not exist.

There is need to improve the effectiveness of cooperative organization as this will enhance the standard of living of the people within the community.

In terms of financial growth, it was found that cooperative societies financial growth and capabilities are too low. This is because of the dishonestly of members and officials of the society.

The member age brackets affects their productivity and invariably their viability as it falls within the age of less emergencies group in production.

Other problems could be associated with the amount of attention paid to the business of cooperative societies, which was found to be grossly inadequate.

Finally, cooperative organization should be regarded as a good venture, people should endeavour to form and given prior attention in all aspect.


5.3 Recommendations

On the basis of the findings of this research, the following recommendations were made by the researcher:

  1. That cooperative societies should embark on a viable projects so as to increase their productivity and profitability levels. To this end, the divisional cooperative officer should compel all the societies to submit the feasibility study reports of all the project they want to embark on, so as to avoid investing on unviable projects.
  2. The Divisional cooperative officer also should have a close monitoring of the activities of these primary societies, so as to curb the incidence of embezzlement of fund by the officials of the societies.
  3. The divisional cooperative officer will ensure that all registered cooperative forward the total employment they made, their turnover and the type of investment each society has made, so far in every year.
  4. He will also ensure that they forward the annual report of their societies every financial year for easy detection of the position of these societies, i.e. to know if they are viable or not.
  5. All these should be forwarded to the DCO for documentation and references for further studies. To improve financial deficits from the records of the societies, the Ahiazu Mbaise DCO should employ the services. All these should be forwarded to the DCO for documentation and references for further studies. To improve financial deficits from the records of the societies, the Ahiazu Mbaise DCO should employ the services of visiting secretaries to handle the issue of finance in the societies.
  6. Members should be able to keep proper books of account and records to enable them achieve the following advantages.
    • Minimization of misunderstanding among the members.
    • To easily know their financial stand or position.
    • To make auditing of the societies very easy.
    • To follow transactions easily.
  7. 7 Members of cooperative societies in Ahiazu Mbaise LGA should work towards uplifting the image of their societies in order to improve in the following area:-
    • Increase in farming, thereby increasing productivity and their productivity and their profitability.
    • Building of health centers.
    • Investing in transportation business.
    • Bulking of community based library in order to improve their children education capability.
    • Increase in block molding business and supplying.
    • Increase in savings ability.
    • Increase in fishing business and supplying.

With the above recommendations by the researcher, it implies that cooperative organization will go a long way in increasing and improving the standard of living of the people.


The Viability Of Cooperative Societies As Business Organization In Ahiazu Mbaise Local Government Area Of Imo State


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