does cooperative financing method influence micro credit delivery an empirical investigation of...

International Journal of Academic Research in Management (IJARM) Vol. 2, No. 4, 2013, Page: 109-124, ISSN: 2296-1747 Helvetic Editions LTD, Switzerland www.elvedit.com

Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical

Investigation of South Western States of Nigeria

Authors

Oladejo Moruf Management Sciences/ Management and Accounting/ Ladoke Akintola University University

Email: [email protected] Ogbomoso, 234, Nigeria

Abstract

This paper appraises the influence of Cooperative Societies as microcredit delivery channel in selected western states of Nigeria with a view to identify the role of Cooperatives in the revised Microfinance policy of the Nigerian government. Studies over the years have shown the positive impact of cooperative societies as micro credit delivery channel and vehicle for poverty alleviation. The revised microfinance policy framework (2011) recognized the existing informal financial institutions like credit Unions and financial Cooperatives but placed more emphasis on MFBs because they are under the regulatory and supervisory purview of the Central Bank of Nigeria (CBN). Appraising the influence of Cooperative Societies on credit delivery at a time when the government seems hesitant of channeling fund for cooperative development and the resultant failure of the microfinance schemes in Nigeria becomes imperative. The data collected through the questionnaires were sorted edited and coded in a table. Both descriptive and inferential statistics were used to present and analyse the data. Purposive sampling technique was adopted to select the sample size. The selection of the 300 Cooperative Societies was done in a simple manner as such that all geo-political zones in each state were adequately represented while the 600 members selected on the basis of two members per one Cooperative Society. Analyses of Variance (ANOVA) as well as t-test were used to test the hypothesis on the cross sectional perception of SMEs members and leaders of cooperative societies on its impact as a micro credit delivery channel in the six selected states of the south west Nigeria. The mean differences were significant at 5%. Also the t-calculated value of 3.93 which is greater than that of tabulated value of 2.25 shows statistically that the mean perception of leaders is significantly different from that of the members.

Key Words

Cooperative Financing Method, Micro Credit Delivery, Nigeria, Microfinance Policy.

International Journal of Academic Research in Management Volume 2, Issue 4, 2013, ISSN: 2296-1747

Copyright 2013 Helvetic Editions LTD - All Rights Reserved

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I. INTRODUCTION The continued lack of the Nigerian government attention to cooperative development due to

ignorance of its micro credit delivery power has been a subject of concern to the accountants, bankers and other players in microfinance. Mean while the micro finance power of cooperative societies cannot be overemphasized. This is because Small and Medium scale enterprises (SMEs) have been promoted greatly by Microfinance Institutions (MFIs), the major and most geographically spread of which are cooperative societies. Apart from ready access to microcredits, Small and Medium Scale Enterprises (SMEs) obtain loans with soft and convenient term. Adelaja (2006) noted that the current banking consolidation programme though desirable, is likely to be more of threat than opportunity for MSMEs. Therefore there is the need to embrace the cooperative options. Most members of cooperative societies engage in one economic activity or the other and thus contribute in no small measure to economic outputs of the nation. Economic development is better achieved through cooperation to solve the problem of scarcity.

According to Kareem, Arigbabu, , Akintaro, & Badmus, (2012) there is hardly any workplace in Nigeria today particularly government establishments, where a cooperative society is not operational. It's quite effective because transactions of money are carried out in conjunction with employers of labour on behalf of their staff. For example, staff's savings into the co-operatives are deducted at source and repayment of loans is done through deductions from staff salaries as requested by the operators of the societies (Godwin 2011). In the same vein, there are co-operative societies that have been set up by private initiative, i.e. group of people seeking a common economic goal and hoping in the long run to improve their economic status.

Invariably, cooperative societies remain the better alternative to economic reconstruction of the government. Most of the Non-Cooperative Groups (NCGs) often die in the midway without fulfilling the economic objectives for their establishment. The study attempts to explore the various economic potentials of cooperative societies especially the microfinance power in promoting Small and Medium Enterprises (SMEs) as well as economic production capacity of cooperative societies. Despite its microfinance power, the Cooperative Societies as an informal source of finance has serious setbacks. One of these problems is the inadequate amount of capital that can be raised from the members of the cooperative society when compared to the need of small scale industrialists. There are factors; however that have militated against the efficiency of cooperative sector as an economic tool of microfinance, job creation, poverty eradication and wealth creation. Some of these are bad leadership, lack of mutual training and exposure to modern management techniques, ambiguous government role in the cooperative movement, as well as the challenges of the changing world.

Kareem, Arigbabu, , Akintaro, & Badmus, (2012) concluded that co-operative societies have effect on members welfare and the role of co-operative society in poverty reduction and capital formation cannot be overlooked in the development process of any country particularly the less developed countries like Nigeria. However the suggestion for government assistance to co-operative society to improve their capital base through the annual budget of the country may require further empirical investigation.

Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western States of Nigeria Oladejo Moruf

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A. Objectives of the Study

In the light of the above, it is the intention of this study to appraise the impact of cooperative societies as a micro-credit delivery channel, especially in the promotion of micro enterprises in Nigeria. The specific objectives to be pursued in achieving the main objective are:

1. To examine the influence of cooperative of society as a micro-credit delivery strategy

2. To assess if there a significant difference in the impact of cooperative societies as a microfinance delivery channels across states in Nigeria.

B. Research Hypothesis

HO: There is no significant difference in the impact of Cooperative Societies as a microfinance delivery channels across states in Nigeria.

II. LITERATURE REVIEW The best way of pushing the limit of economic problem of scarcity is by working together. This

is because more can be accomplished when people coordinate their efforts with each other take concerns and talents of other into considerations (Reeve, 2003). Invariably, cooperative societies remain the better alternative to economic reconstruction of the government, but its vast potentials have always been jettisoned by the Nigerian Government.

However Cooperatives have been denied attention by the Nigeria government over the years despite the economic impact of the cooperative method. For instance Agbo and Chidebelu (2010) assessed the extent to which cooperative societies had access to the special intervention fund administered by the Nigerian Agricultural Cooperative And Rural Development Bank (NACRDB) Ltd. The study was carried out between March and September, 2005, on six randomly selected states, one from each of the six geopolitical zones into which Nigeria has been divided. Sixty cooperative societies were randomly selected for the study from each state covered; thirty of them with access and thirty without access to the intervention fund, on the whole 360 cooperative societies were studied. The Levenes test for equality of means showed that the difference between the means of the two categories of cooperative societies were statistically significant at 5% probability level. Likert scale rating confirmed that the operational guidelines of NACRDB such as minimum credit requirement, type of crop grown, approved loan size, and insurance cover affected access to the intervention fund.

In the year 2005 the Federal Government domiciled the sum of N50 billion with the NACRDB Ltd to lend to cooperatives and other farmer organizations at concessionary interest rates. A recent study of the patterns of disbursement of the N50 billion intervention fund showed that more than 75% of the fund went to private farmers and other farmers organizations that are not cooperative societies (Onyeagocha, 2008). Some factors have been responsible for the poor access of cooperative societies to the intervention fund domiciled with the NACRDB Ltd. Socio-economic characteristics of cooperative societies have been singled out as the major constraints to



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cooperative societies access to services of agencies established to help them in Nigeria (Ijere, 1977; Okafor, 1979). Such socio-economic characteristics include membership size, the cooperatives asset base and membership participation. In his own study, Ambruster (2001) isolated, among others, the system of delivery of the services needed by cooperatives, the process used to determine the sector that needs intervention, and the mode of selection of beneficiaries as the most critical factors affecting cooperatives access to development resources.

Studies have shown that Cooperative method provides the best funding alternative for SMEs than all other economic grouping and schemes (Akinwumi, 2006; Oladejo, 2011; Oluyombo, 2012). The extent to which the cooperative method can be explored and integrated in the Nigerian microfinance policy is expected to be addressed in this study.

A. Evolution of Informal and Formal Cooperative Finance in Nigeria

The modern microfinance according to Dunford (2006) has roots in the cooperative movement. Further to this is the observation of Kevin, Louis & Mark (2000) that one means for the entrepreneurial firms to overcome the constraint of access to credit is by cooperating with either other entrepreneurial firms or possibly with larger, established, resource-rich firms. Cooperative is as old as man. Epetimehin (2006) traced the development of cooperative societies to the beginning of civilization since early people had to learn to work together to meet their common need or perish. Asaolu (2004) believed that modern cooperative societies came into existence in the first half of the 19th century during the Industrial Revolution in Britain. The first successful cooperative societies call Rochdale Equitable pioneers was formed in 1844. Ancient records show that Babylonians practice cooperative farming and that Chinese developed saving and loan associations similar to those in use today. Roy (1964) traced that history of cooperative societies to the old Egyptian Empire 3000 B.C.

Abrahamson (1976) submitted that Robert Owen often regarded as the father of cooperation was credited with developing a new view of society which he described in four essays that received wide recognition. Owen created the environment in which four basic cooperative ideas emerged in embryonic form. These ideas are:

(i) Associated Efforts: Which centres on bringing people together in an effort to deal with the problems confronting them.

(ii) Voluntary Approach: People are free to join or not, but Owen believed that through educational efforts many of them would come to understand the merit of cooperative ideas.

(iii) Democratic Control: People could be relied upon to make the right decisions in governing themselves self-governance idea.

(iv) Service to Members Emphasized: The communal society should identify members need and should seek to satisfy them. Production should be for use and not for profit.

However modern cooperative enterprise differs in some basic ideas as advocated by Robert Owen. Todays cooperatives according to Abrahamsen (1976) are highly specialized, restrict



operations to specific member needs and are very much a part of the exchange economy. Modern cooperative operations are oriented towards accumulation of private property and the sharing of benefits in proportion to participation in the business. Also members are expected to provide a substantial share of the capital necessary to start and operate their cooperative.

In 1937 the first registered cooperative society, the Gbedun cooperative produce marketing society near Ibadan, Oyo State was thus established. This makes Oyo State the cradle of modern cooperation in Nigeria. The early types of cooperative societies were mainly agricultural cooperatives. The activities of a farmers organization known as Agege planters union operating in the then Lagos province became popular.

These groups were organized into cooperative societies to provide them with organizational means for helping them with credit, storage, transport, chemicals and herbicides, and marketing of their produce at higher prices for their improved well-being. In the old western region (now western states) of Nigeria cocoa producer cooperatives accounted for 40% inputs supply and distributions in 1950s and 1960s. Thrift and credit cooperative societies started among missionaries in Abeokuta and among traders and farmers in the old Calabar province. The impressive performance of the savings and credit cooperatives can be seen in the establishment of cooperative banks in the western, eastern and north Nigeria respectively. Despite the loss of cooperative identity bank the then cooperative to recent recapitalization in the banking sector it obvious that credit cooperative have made and will continue to make significant impact as the rue banks of the commoners.

According to the cooperative development policy document of 2002, issued by the Federal Ministry of Agriculture and Rural Development (FMARD) membership of cooperative societies in the country has increased astronomically. Between 1939-40 there were only 32 registered cooperative societies with a total of 1,203 members all over the country. This increased to 181 with total members of 5,908 between 1943 and 1944. In 1990 there were reportedly 29,000 registered cooperative societies with about 2.6million members. In the year 2000, it was estimated that over 50,000 cooperative societies existed with over 5 million members.

B. Economic Importance of Cooperative Societies Cooperative society provides opportunities for millions of people in all economic sectors,

particularly in the rural and urban low income groups, to escape poverty in a sustainable ways. Statistics are not available, but is a general fact that cooperative are second only to government in employment, particularly in the southwest of the country. And certainly there can be no bigger provider of employment in the formal sector than the cooperatives in their various types and forms. Cooperative is meant to provide its members with some benefits and opportunities which ordinarily will cost more if it is to be derived outside the cooperatives. Oludimu et al (2001) believe that cooperation means that some activities can be more effectively and economically performed by a group rather than by an individual. Therefore cooperative societies are voluntary associations in which people come together to enhance their economic interest. Rana (1970)



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viewed cooperatives as a form of business organizations which is established by members on the basis of equality to promote their economic and social interest. King (1993) defined cooperative society as a formal organization of people with similar ideas, consciously working together for common aims, and guided by a set of principles which distinguish their activities from other forms of human endeavours. According to Asaolu (2004) cooperation is of course, the basic social process. Abrahamsen (1976) viewed cooperation as working together to achieve a common end. According to Kareem et al (2012), Cooperative Societies are formed with the idea of mutual co-operation. Every co-operative society is formed to render service to its members rather than to earn profit.

The U.S.A Cooperative Business Survey Report (2005) revealed that the economic impact of U.S - based cooperative businesses is significant, reflecting the ubiquity of co-operatives, the large number of Americans who are their owners or customers, and the role co-ops play in generating business activity, including jobs and economic growth. For the six key sectors that are the focus of this report, agriculture, credit unions, farm credit, electric utilities, grocery and housing, the data are impressive. From the report, there are 21,367 cooperatives in the six sectors. These cooperatives have more than 127.5 million members. Cooperatives in these six sectors employ considerably more than 500,000 Americans, with aggregate payrolls of more than $15 billion annually. These cooperatives generate total annual revenues in excess of $211.9 billion. Among individual sectors: Agriculture co-ops have a gross business volume of more than $111 billion per year and 2.8 million members. The Farm Credit System has approximately $125 billion in assets and $96 billion in loans outstanding. Credit unions have $668 billion in assets and more than 86 million members, who receive billions of dollars in benefits annually from lower loan rates and higher savings rates. Credit unions have $443.5 billion in loans outstanding. Electric utility co-ops serve 37 million people and their lines cover more than three quarters of the U.S. land mass. Food and grocery co-ops generate $33 billion in annual revenues while retail food co-ops alone pay back an estimated $4 million a year to their members. Housing cooperatives have combined budgets in excess of $11 billion, and make an estimated $1.2 billion in property improvements each year.

Kevin, Louis and Mark (2000) conducted a research study, using a seven-nation (Australia, Finland, Greece, Indonesia, Mexico, Norway, and Sweden) sample, found that entrepreneurs from feminine, collective, and uncertainty-avoiding societies have a greater appreciation for the strategic importance of cooperative strategies than their counterparts. Moreover, entrepreneurs from feminine societies place greater emphasis on partner commonality in terms of objectives and values to ensure cooperative success, whereas those from individualistic societies emphasize contractual safeguards.

According to Narayan and Petesch (2009) Co-operatives are in many countries as significant social and economic actors in national economies, thus making not only personal development a reality, but contributing to the well-being of entire populations at the national level. Co-operatives have significantly contributed to economic growth throughout the world. Furthermore, the United Nations estimated in 1994 that the livelihood of nearly 3 billion people, or half of the



worlds population, was made secured by co-operative enterprises. Nearly 800 million individuals are members of cooperatives today, compared with about 184 million in 1960. They account for an estimated 100 million jobs and are economically significant in a large number of countries providing foodstuffs, housing, financial and a wide variety of consumer services as put by International Labour Conference, Report (2001).

C. Cooperative development policy for Nigeria The Federal Ministry of Agriculture and Rural Development issued a policy on cooperative

development in August 2002 to facilitate economic development in Nigeria. The policy takes cooperatives as unique organization with both social and economic objectives, uphold the principles of cooperatives as adopted by ICA, 1995 and adopt cooperatives as a vehicle for national development. The policy reviewed the performance of cooperative sector since the inception of formal cooperation in Nigeria in 1935.

Highlights of the performance of the cooperative sector to date have been given as follows:

(i) Development of export crops production in quality and quantity leading the way in foreign exchange earnings from cocoa, palm produce, groundnuts cotton rubber etc.

(ii) Minimization of exploitation of producers by middlemen and traders. All these were done by cooperative societies.

(iii) Development of indigenous banking which favourable compete with foreign banks and break their monopoly in financial intermediation. We have cooperative bank (now Skye Bank, Nigeria Agricultural Credit, Cooperative Rural Development Bank (NACRDB) etc.

(iv) Mobilization of enormous financial resources from small cooperative savers thus creating thrift and credit systems that have helped millions of small scale industrialist to establish businesses and become house owners.

(v) Formation of strong viable cooperative societies in urban and rural areas throughout the country. Thus allowing for rural development.

(vi) Creation of mass enlightenment and inculcation of democratic principles and practices through membership education and cooperative management. Every registered society maintains democratic methods of decision making.

(vii) The creation of many cooperatives apex bodies such as Cooperative Federation of Nigeria (CFN), Cooperative Finance Agencies (CFA), Worldwide Insurance Company, Cooperative Trust and Investment, Rainbow Travels Agency etc have made many for reckoning in the Nigerian private sector economic activities.

(viii) Linkages with the government, non-government organizations and international and intergovernmental organizations have further strengthened cooperatives and assisting in the



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objective of promotion of economic opportunities for their members and poverty alleviation.

D. Problems and Challenges of Cooperatives in Nigeria One major obstacle to Cooperative development in Nigeria is policy neglect. The Nigeria

government is not attracted to the cooperative financing strategies and has in most case preferred some other economic groups similar to this in her poverty eradication programme. There are some factors that affect the performance of Cooperative Societies in discharging micro credit roles effectively and perhaps the reasons for lack of interest by the policy makers in Nigeria. Generally the capacity of Cooperative Societies to provide fund to the poor and low income group is limited by inadequate capital base (Asaolu 2004). The other critical element according to Akinwunmi (2006:3) was leadership. If there is purposeful leadership, if leaders are transparent, dedicated and truly serving, the cooperative society will succeed. Most leaders are not focused and in most cases engage in embezzlement of the little fund available making members to lose interest in this viable economic method.

Poor accounting and record keeping has crippled the activities of most cooperative societies in Nigeria (Asaolu 2004, Oladejo 2008, Lawal 2006). Most cooperative societies are not yet exposed to modern technologies like computers not to talk of electronic payment system that could have facilitated the operations and improved the performance of the cooperative societies. There are so many areas where information technology can impact well on the operations of cooperative societies. Most leaders have not made this to work for fear of exposure of their excesses. Most offices of department of cooperative services were yet to be equipped with computers and other Information Communication Technology (ICT) that are valuable in enhancement of cooperative operations like accounts, internal checks, record keeping including updated data base of all cooperative societies and their activities in each state. This would facilitate interstate cooperative transactions and information update.

Another challenge facing the Nigerian cooperatives is non taping from the opportunities in mortgage financing that would have assisted members housing and accommodation problem. Although few cooperatives especially in Lagos state and Ogun state engage in property business, limited capital base might be responsible for full mortgage financing.. Generally it is seen that co-operative societies do not function efficiently due to lack of managerial talent as submitted Kareem et al (2012).

III. METHODOLOGY The study made use of cross-sectional survey design. The study area was Lagos, Southwestern

Nigeria; a choice based on its strategic location as the commercial nerve of Nigeria.

This section focuses on the research techniques adopted and used for this study with the aim of achieving the research objectives. Survey research design was chosen because the sampled elements and the variables that are being studied are simply being observed as they are without making any attempt to control or manipulate them. Data were collected from a sample of Cooperative leaders in the six states of south western Nigeria to determine the relationship



between Cooperative method and microcredit delivery. The independent variables are Cooperative financing method while the dependent variable is the microcredit delivery. The ordinary least square equation can be expressed as follows:

Y = f (X) ............................................................... (1)

Explicitly, the model is specified as:

Yit = 0 +1 CFMit+ eit ........................................ (2)

Where Y is the dependent variable proxied by credit delivery efficiency and X is the independent variable represented by the Cooperative financing method (CFM)

However, the study was restricted the six states of south western Nigeria. The choice south western Nigeria stems from the fact that the concentration and predominance of Cooperative societies in south western Nigeria is easily identifiable. For effective coverage and lower cost, purposive sampling technique was used to select the participating Leaders in Cooperative Organizations. A simple random sampling technique was used to select a total of 300 cooperative Societies in the selected states of the South Western Nigeria. The selection of the 300 cooperative societies was done in a simple manner as such that all geo-political zones in each state were adequately represented while the 600 members selected on the basis of two members per one Cooperative Society.

The data collected though the questionnaires and interview were sorted edited and coded in a table. Both descriptive and inferential statistics were used to present and analyses the data. The Likert scale was used for responses to the hypothesis questions using weights 5,4,3,2 and 1 to SA, A, D, S D and U respectively. Thus a state with 8 zones had at least 8 cooperative societies selected for each zone. Analyses of Variance (ANOVA) as well as t-test were used to the hypothesis on the cross sectional perception of members and leaders of cooperative societies on its impact as a micro credit delivery channel in the six selected states of the south west Nigeria.

IV. DISCUSSIONS OF THE FINDINGS The study attempted to appraise the influence of Cooperative Societies as micro-credit delivery

channel with a view to provide solutions to problems in the Nigerian situation. The total number of cooperative societies in the south-west was 48,856as at 24th of September, 2012 as per information collected from the various directorates of cooperative services in the six states of the south-west. Oyo state had the largest of 17,867 cooperatives with the Lagos state having the least with 2261 cooperative societies as shown in the Table I below.



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TABLE I: NUMBER OF COOPERATIVE SOCIETIES IN THE SOUTH WESTERN NIGERIA AS AT 24TH OF SEPTEMBER, 2012.

SOURCES: OFFICE OF DIRECTORS OF COOPERATIVE SERVICES IN EACH STATE

STATE NO. OF COOPERATIVE SOCIETIES Ekiti 9233 Lagos 2261 Ogun 7175 Ondo 5287 Osun 5032 Oyo 17867 Total 48,856

From the 300 questionnaire distributed to the selected cooperative leaders only 241 were completed and returned. This constitutes 80% of the total questionnaire and found to be adequate for the purpose of the study. Also only 456 questionnaires out of the 600 sent to the selected Members SMEs were completed and returned. This represents 76% of the total questionnaire distribution which is considered appropriate for the purpose of the study (Table II ab).

The analysis of the operating performance of the four selected cooperative societies in Ogun state revealed that the cooperative societies have performed well in the area of loan disbursement to the members to expand their business. Most cooperative societies also give out investment loan, project development loan as well as education loan to the needy members. Although cooperative organizations are not for profit and not for charity, the profit performance to the total income generated over the years is not forthcoming. The ratios of operating cost to the total income for the selected cooperative societies were on the higher side. This reflected in the poor net surplus and the resulting dividend paid to members over the years. This suggests the need for the improvement in the performance of the cooperative societies as proclaimed some leaders in Table III.

From the Table IV of mean of mean perception score of respondents SSEs on the impact of cooperative societies as a microfinance delivery channels across six states in the South Western Nigeria, over 76.5% had mean perception score of 50 or more, indicating the majority of the respondents with high mean perception score in the study area. Therefore we can conclude that leaders of cooperative societies perceived cooperative societies as vibrant micro credit delivery channel across states differently. This corroborated the study of Asaolu 2004 in the selected areas in Osun State that confirm the power of cooperative societies as a micro finance delivery channel.

The result presented in Table V shows that the, mean perception for members is 63.66 and that of leaders is 68.33 with standard deviation of 16.99 and 9.74 respectively. The mean differences were significant at 5%. Also the t-calculated value of 3.93 which is greater than that of tabulated value of 2.25 shows statistically that the mean perception of leaders is significantly different from that of the members. This shows that statistically, the null hypothesis is thus rejected.



Table VI shows the result of the Analysis of Variance on the differences in the impact of cooperative societies as a microfinance delivery channel across the six states of Nigeria revealed the F- calculator value of 2.32 whose probability close to zero percent suggest that there is a difference in the impact of cooperative society as a microfinance delivery channel across the state in Nigeria. The multiple comparison of the differences showed that the mean difference is significant at 0.5% between Lagos, Ekiti and Ondo State., also with Ekiti and Lagos and Oyo State. The same thing with Ondo,Lagos and Oyo State. Oyo has significant difference in the impact compared to Ekiti, Ondo and Osun State so also was the impact in Osun State significantly different to that of Oyo State.

The cooperative societies have significantly impacted on sustainable development of Nigeria, and that cooperative societies are significantly vibrant in fund mobilization and financial intermediation. This corroborated the earlier work of Abrahamsen 1976; Asaolu 2004; Epetimehim 2006; Kareem et al 2012.

TABLE II A: QUESTIONNAIRE DISTRIBUTION TO LEADERS OF COOPERATIVES SOCIETIES. SOURCE: FIELDS SURVEY 2013.

Responses Sent Returns % of Returns Ekiti 50 38 76% Lagos 50 40 80% Ogun 50 41 82% Ondo 50 38 76% Osun 50 39 78% Oyo 50 45 90% Total 300 241 80.3%

TABLE II B: QUESTIONNAIRE DISTRIBUTION TO SMES MEMBERS OF COOPERATIVES SOCIETIES. SOURCE: FIELD SURVEY 2013.

Responses Sent Returns % Of Returns Ekiti 100 68 68% Lagos 100 84 84% Ogun 100 88 88% Ondo 100 69 69% Osun 100 65 65% Oyo 100 82 82% Total 600 456 76%



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TABLE III A : ANALYSIS OPERATING PERFORMANCE OF THE SELECTED COOPERATIVE SOCIETIES IN OGUN STATE BETWEEN THE YEARS 2003 TO 2007.

SOURCES: AGM REPORTS AND ACCOUNTS OF THE SELECTED COOPERATIVE SOCIETIES FOR THE YEAR 2003 TO 2007.

Performance indicators

2003 #

2004 #

2005 #

2006 2007 #

Gross profit 10455671 16494597 19984690 25737378 23733188 Expenditure 7089146 13792411 16837956 17817613 15855384 Surplus 3639125 5660325 6387133 8094246 8254573 Dividend 1676925 2352353 2454680 3619671 3486536 Total Asset 179128205 121771912 135339032 166829789 193105727 Fixed Asset 21104102 24816567 40886035 64600742 79387079 Current Asset 68309595 97136756 102462401 109998816 113674140 Current Liabilities

5737544 4551464 12058982 13310608 16392132

Share Holders 58565748 105861508 154833028 166705068 230004385

TABLE III B: LOAN DISBURSEMENT TO MEMBERS AND REPAYMENT BETWEEN THE YEARS 2003 TO 2007 IN THE SELECTED COOPERATIVE SOCIETIES IN OGUN STATE.

SOURCES: AGM REPORTS AND ACCOUNTS OF THE SELECTED COOPERATIVE SOCIETIES FOR THE YEAR 2003 TO 2007.

Loan status 2002

# 2003

# 2004

# 2005

# 2006

# Loan Granted 102539491 156281073 173260790 176678334 185347408 Loan Repaid 82159682 94609940 95289476 101673624 104186607 Loan Unpaid 20399809 61671133 78000000 75004710 81160801

Unpaid 19.9% 39.5% 45% 42.5% 43.7%

TABLE IV: MEAN PERCEPTION SCORE OF RESPONDENTS ON THE IMPACT OF COOPERATIVE SOCIETIES AS A MICRO FINANCE DELIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.

Perception score FREQUENCY PERCENTAGE < = 30 13 2.9 31-40 43 9.4 41-49 51 11.2

50 or more 349 76.5 Total 456 100.0

TABLE V: T- TEST SHOWING DIFFERENCES IN THE PERCEPTION OF MEMBERS AND LEADERS ON THE IMPACT CS AS A MICRO FINANCE DILIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.

Category N Mean STD DF t-cal t-tab Remarks Members 456 63.6579 16.99325

694 3.93 2.25 Significant Leaders 240 68.3250 9.73641



TABLE VA: HYPOTHESIS ONE: ANALYSIS OF VARIANCE (ANOVA) SHOWING DIFFERENCES IN THE IMPACT CS AS A MICRO FINANCE DELIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.

Parameter Sum of Squares

DF Mean Square F P Remarks

Between Groups 3305.997 5 661.199 2.323



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V. CONCLUSION The results of hypotheses tested showed there is no significant difference in the impact of

Cooperative Societies as a microfinance delivery channels across states in Nigeria.

In the light of the above the following suggestions are considered a viable options to solving the identified constraints.

(i) SMEs should be encouraged by the government to join or form cooperative societies which should embody all principles of cooperation to facilitate access to fund and promote

(ii) Cooperative potentials could be explored by attempting a synergy of Cooperatives and Microfinance banks for improved credit delivery efficiency

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AUTHORS BIOGRAPHY

.MR OLADEJO MORUFU OLADEHINDE is currently a lecturer in the department of Management and Accounting of Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has MSC in Accounting, MBA and BSc in Accounting from Olabisi Onbanjo University, Ago Iwoye, Ogun state Nigeria. He is an associate member as well as examiner to both the Institute of Chartered Accountants of Nigeria (ICAN), and the Chartered Institute of

Taxations of Nigeria (CITN). He is pursuing his Phd in Management and Accounting of the Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, with specialisation in Accounting and E-payment system. His research interests include Microfinance, Financial Institutions Analysis and electronic payment system. He has published papers in microfinance, accounting and e-commerce.

does cooperative financing method influence micro credit delivery an empirical investigation of...

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