problems and prospects of cooperative society in nigeria
TRANSCRIPT
PROBLEMS AND
PROSPECTS OF
COOPERATIVE
SOCIETY IN
NIGERIA
1
(a case study of Farmers Cooperative Society. Oyi L.G. Anambra State.)
BY
……………………………………..
(AKP/WRR/BMG/BUS/ND2007/………..)
A PROJECT WORK SUBMITTED TO THE
SCHOOL OF BUSINESS STUDIES, DEPARTMENT OF
BUSINESS ADMINISTRATION. IN PARTIAL FULFILLMENT OF
THE REQUIREMENT
FOR THE AWARD NATIONAL DIPLOMA
IN BUSINESS ADMINISTRATION.
NOVEMBER 2009
2
CERTIFICATION
We certify this work was carried out by OZAH BLESSING N. in the
School of Business Studies, department of Business
Administration, Akwa Ibom State Polytechnic as meeting the
requirement for the award of ordinary diploma in Business
Administration.
__________________ ________________
(Supervisor) Centre Co-ordinator
Date __________ Date __________
3
DEDICATION
I dedicate this project to Almighty God for his divine guidance,
grace and mercy throughout my academic pursuit. May all Glory,
Honour, Majesty and power be ascribed unto His Holy Name in
Jesus Name.
4
ACKOWLEDGEMENT
To God be the glory for its not by my power nor my might but by His grace
that is superfluous and more than sufficient. I thank Him for making this
programme a reality.
I am also grateful to my supervisor Mr Emmanuel Nelson Bassey for his
painstaking and thoroughness in supervising this project.
I acknowledged the immense support I received from my family especially
my children, their encouragement during the period of the programme.
The cooperation and the encouragement of my supporting staff who always
stand in for me anytime I am away.
This acknowledgement will be incomplete without noting the contribution of
the following people to the success of the programme, the school registrar,
the assistance registrar and other friends who had contributed in one-way
or the other to the successful completion of the programme.
A special word of thanks go to staff of C.A.C.T. Publishers in typing the
various draft of the manuscript..
5
I wish to conclude this acknowledgement by expressing my sincere
appreciation to all my colleagues for their friendly disposition towards me
during the period of the programme. MAY GOD BLESS YOU ALL.
6
ABSTRACT
In this research work, the researcher empirically unveil the
problems and prospects of cooperative society in Oyi LG in
Anambra State. In the course the research, it was discovered that:
Cooperative provides ready markets for members produce. Members are
encouraged to engage in economic production and services that enhance
gross domestic product and national income.
Retail goods are made available for the consumption of the cooperators as
well as the public at affordable prices.
Bonuses are given to members on patronage which enhance their
personal income.
Cooperative members readily benefited from government and non-
government organizations of expert advisory services in various ways.
Cooperative enjoys soft loan benefits from the governments, banks and
other similar institutions for the operation of their joint or individual
businesses.
Functional cooperatives education and training imparted on the members
enable them to do well in their businesses.
7
Standard of living of the cooperators has been raised thus guaranteeing
quality of members' lives.
Cooperative is a major vehicle for a nation's industrial development.
TABLE OF CONTENTS
Cover page - - - - - - - i
8
Title page - - - - - - - - i
Certification - - - - - - - ii
Dedication - - - - - - - iii
Acknowledgement - - - - - - iv
Abstract - - - - - - - - vi
Table of content - - - - - - ix
CHAPTER ONE
INTRODUCTION - - - - - - 1
1.0 THE BACKGROUND OF THE STUDY - - 1
1.1 STATEMENT OF RESEARCH PROBLEM - 3
1.2 THE OBJECTIVE OF THE STUDY- - 4
1.3 THE SIGNIFICANCE OF THE STUDY - - 5
1.4 HYPOTHESES - - - - - - 6
1.5 LIMITATIONS OF THE STUDY - - - 7
1.6 THE STRUCTURE OF THE WORK - - 9
CHAPTER TWO
REVIEW OF THE RELATED LITERATURE
2.0 ORGANIZATION AND IDEOLOGICAL
9
ROOTS - - - - - - - - 10
2.1 COOPERATIVE AS LEGAL ENTITIES - - 13
2.2 IDENTITY - - - - - - - 14 2.3
MEANING OF CO-OPERATIVE SOCIETY - 15
2.4 TYPES OF CO-OPERATIVE SOCIETIES - 18
2.5 TYPES OF COOPERATIVE
GOVERNANCE - - - - - - 20
2.6 CHARACTERISTICS OF CO-OPERATIVE
SOCIETY - - - - - - - 25
2.7 FORMATION OF A CO-OPERATIVE
SOCEITY - - - - - - - 28
2.8 ADVANTAGES OF CO-OPERATIVE SOCIETY 29
2.9 LIMITATION OF CO-OPERATIVE
SOCIETY - - - - - - - 31
2.10 IMPACT OF COOPERATIVE IN
NIGERIA - - - - - - - 32
2.11 CO-OPERATIVES TODAY - - - - 33
2.12 PROSPECTS OF THE COOPERATIVE
SOCIETY - - - - - - - 34
2.13 PROBLEMS OF COOPERATIVE - - - 40
10
2.14 THE NEED FOR RE-ENGINEERING
COOPERATIVES SOCIETIES - - - 42
CHAPTER THREE
RESEARCH METHODS AND PROCEDURES
3.1 RESEARCH DESIGN - - - - - 44
3.2 SAMPLING - - - - - - - 46
3.3 POPULATION - - - - - - 47
3.4 DATA COLLECTION - - - - - 48
3.5 FIELD WORK - - - - - - 51
3.6 DESCRIPTION OF DATA PRESENTATION AND ANALYSIS
- - - - - - 52
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION - - - - - - 54
4.2 DATA PRESENTATION - - - - 55
4.3 CROSS-TABULATED ANALYSIS - - - 62
4.4 HYPOTHESIS TESTING - - - - 63
4.5 SOFTWARE USED FOR DATA ANALYSIS - 64
4.6 SUMMARY OF RESULT - - - - 67
CHAPTER FIVE
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FINDINGS, SUMMARY AND CONCLUSION
5.1 FINDINGS - - - - - - - 68
5.2 SUMMARY - - - - - - - 70
5.3 RECOMMENDATION - - - - - 71
5.4 REFERENCES - - - - - - 73
CHAPTER ONE
INTRODUCTION
1.0 THE BACKGROUND OF THE STUDY
Although co-operation as a form of individual and societal behaviour
is intrinsic to human organization, the history of modern co-operative
12
forms of organizing dates back to the Agricultural and Industrial
Revolutions of the 18th and 19th centuries. The status of which was
the 'first co-operative' is under some dispute, but various milestones
in the history may be identified.
In 1761, the Fenwick Weavers' Society was formed in Fenwick, East
Ayrshire, Scotland to sell discounted oatmeal to local workers. Its
services expanded to include assistance with savings and loans,
emigration and education. In 1810, Welsh social reformer Robert
Owen, from Newtown in mid-Wales, and his partners purchased New
Lanark mill from Owen's father-in-law and proceeded to introduce
better labor standards including discounted retail shops where profits
were passed on to his employees. Owen left New Lanark to pursue
other forms of co-operative organization and develop co-op ideas
through writing and lecture. Co-operative communities were set up in
Glasgow, Indiana and Hampshire, although ultimately unsuccessful.
In 1828, William King set up a newspaper, The Cooperator, to
promote Owen's thinking, having already set up a co-operative store
in Brighton.
13
The Rochdale Society of Equitable Pioneers, founded in 1844, is
usually considered the first successful co-operative enterprise, used
as a model for modern co-ops, following the 'Rochdale Principles'. A
group of 28 weavers and other artisans in Rochdale, England set up
the society to open their own store selling food items they could not
otherwise afford. Within ten years there were over 1,000 co-operative
societies in the United Kingdom.
Other events such as the founding of a friendly society by the
Tolpuddle Martyrs in 1832 were key occasions in the creation of
organized labor and consumer movements.
From the report of the workshop held on 10th – 11th November 2008
during the 8 the ICA Africa regional assembly at the international
conference centre, Abuja. Mr Tom Tar - The Executive Secretary of
Cooperative Federation of Nigeria, In his introduction of the
movement in Nigeria, said the Cooperative Federation of Nigeria
(CFN) was formed in 1945 and got registered in 1967.
He traced the background of cooperatives in Nigeria to the traditional
savings and loans system. He added that following agitation by the
Agege Cocoa planters Union in 1907, the study for establishment of
formal cooperation was commissioned in 1934. This was followed by
14
the enactment of cooperative legislation in 1935. The early move was
in agriculture and latter shifted to marketing following the shift in the
Nigerian economy from agriculture to crude oil. He gave the scope of
cooperative activities in Nigeria as covering: On population, he said
there are about 5million family members covering 20 million house
holds. Total number of registered cooperative societies is about
50,000.
1.1 STATEMENT OF RESEARCH PROBLEM
In considering the statement of the research problem, these
question readily come to mind:
(i) Can any competent person become a member of a society, at
anytime.
(ii) Is the liability of the members is unlimited.
(iii) do the government encourages and supports the formation of co-
operative societies by providing subsidies and exemptions.
(iv) Can It exist for long due to a legal entity separate from its
members.
(v) Is the society managed by one person only.
1.2 THE OBJECTIVE OF THE STUDY
15
It would have been a total waste of time, efforts, energy and of course
fund, in conducting this research if it was not meant to achieve any
meaningful objectives. The research would also have been seen as a
fruitless exercise if there were no fundamental objectives to be
achieved at the end of the study. The major objective of the study
therefore was analysing the problems and prospects of cooperative
society in Anambra State but the subsidiary objectives are:
- Cooperatives put people at the centre of their business and not
capital.
- in cooperative movement, the welfare of members is emphasized
- Cooperatives engage in business activities that touch members e.g.
schools building, credit.
- cooperative Create jobs and empowerment for members
- cooperative Render service rather than making profit
- cooperative emphasis on Mutual help instead of competition
- cooperative offers Self help instead of dependence
1.3 THE SIGNIFICANCE OF THE STUDY
This study is significant because it will produce data on cooperative
movement in Nigeria that will be useful to:
16
1. federal ministry of labour and productivity
2. national union of local government employees
3. state civil service commission
4. federal civil service commission .
5. managers and top executives in organized private sector
6. united nation commission on employment
7. federal ministry of finance
8. Central bank of Nigeria
9. students carrying out a research work in this same issue.
1.4 HYPOTHESES
It is a conjectural statement of the relationships between two or more
variables. It is testable, tentative problem explanation of the
relationship between two or more variables that create a state of
affairs or phenomenon.
17
E.C. Osuola (1986 page 48) said hypothesis should always be in
declarative sentence form, and they should relate to them generally
or specially variable to variables.
HYPOTHESIS THUS:
1. Explain observed events in a systematic manner
2. Predict the outcome of events and relationships
3. Systematically summarized existing knowledge.
In essence, there exist NULL HYPOTHESIS set up only to
nullify the research hypothesis and the ALTERNATIVE
HYPOTHESIS for the purpose of the study. For the efficiency
of the study, the hypothesis is as follows:
Null Hypothesis (HO)
1. The liability of the members is not unlimited.
2 The society is not managed by one person only.
Alternative Hypothesis (HI)
1. The liability of the members is unlimited.
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2. The society is managed by one person only.
1.5 LIMITATIONS OF THE STUDY
A research work of this nature cannot come to an end
without limitation. The researcher encountered numerous
problems which affected the smooth running of the work.
These problems includes, difficulty in procuring materials for
the project, time factor and financial constraints.
Material Procurement
There was a lot constraints as to getting information and
materials for the job. The researcher made series of
consultations and visit to most renowned institutions to
acquire the needed information. Most materials used were
very difficult to come by, as there is no library within the
town.
Time Constraints
Combining academic work with job is no doubt a thought
provoking issue, as it has to do with time. Actually, a lot of
time was wasted as the researcher visited the organizations
19
and individuals together with government agencies to obtain
valuable information for the project.
Financial Constraints
The researcher would have obtained more information than
what is obtainable here but due to lack of money to visit
some of the firms and government agencies located a bit
farther from the researcher place of resident.
1.6 THE STRUCTURE OF THE WORKThis research work is to be organized in five chapters as
follows:
1 Introduction
2 Review of related literature
3 Research method
4 Data presentation and analysis
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5 Findings, Summary, and conclusion
CHAPTER TWO
REVIEW OF THE RELATED LITERATURE
2.0 ORGANIZATIONAL AND IDEOLOGICAL ROOTS
The roots of the co-operative movement can be traced to multiple
influences and extend worldwide. In the Anglosphere, post-feudal forms of
21
co-operation between workers and owners, that are expressed today as
"profit-sharing" and "surplus sharing" arrangements, existed as far back as
1795. The key ideological influence on the Anglosphere branch of the
cooperative movement, however, was a rejection of the charity principles
that underpinned welfare reforms when the British government radically
revised its Poor Laws in 1834. As both state and church institutions began
to routinely distinguish between the 'deserving' and 'undeserving' poor, a
movement of Friendly Societies grew throughout the British Empire based
on the principle of mutuality, committed to self-help in the welfare of
working people.
Friendly Societies established forums through which one member, one vote
was practiced in organisation decision-making. The principles challenged
the idea that a person should be an owner of property before being granted
a political voice. Throughout the second half of the nineteenth century (and
then repeatedly every 20 years or so) there has been a surge in the
number of cooperative organisations, both in commercial practice and civil
society, operating to advance democracy and universal suffrage as a
political principle. Friendly Societies and consumer cooperatives became
the dominant form of organization amongst working people in Anglosphere
industrial societies prior to the rise of trade unions and industrial factories.
22
Weinbren reports that by the end of the 19th century, over 80% of British
working age men and 90% of Australian working age men were members
of one or more Friendly Society.
From the mid-nineteenth century, mutual organisations embraced these
ideas in economic enterprises, firstly amongst trade people, and later in co-
operative stores, educational institutes, financial institutions and industrial
enterprises. The common thread (enacted in different ways, and subject to
the constraints of various systems of national law) is the principle that an
enterprise or association should be owned and controlled by the people it
serves, and share any surpluses on the basis of each members'
cooperative contribution (as a producer, labourer or consumer) rather than
their capacity to invest financial capital.
The cooperative movement has been fuelled globally by ideas of economic
democracy. Economic democracy is a socialist extension of the liberal idea
of political democracy. Different forms of socialism have developed
different approaches to thinking about and building economic democracy.
Both Marxism and anarchism, for example, have been influenced by as
well as contemporaneous with utopian socialism, which however was
23
based on voluntaristic cooperation, without recognition of class conflict
(such as for example is posed by a belligerent capitalist class, dependent
on labour and mobilizing by of and for itself). Anarchists are committed to
libertarian socialism and they have focused on local organization, including
locally-managed cooperatives, linked through confederations of unions,
cooperatives and communities. Marxists, who as socialists have likewise
held and worked for the goal of democratizing productive and reproductive
relationships, often placed a greater strategic emphasis on confronting the
larger scales of human organization. As they viewed the capitalist class to
be prohibitively politically, militarily and culturally mobilized in order to
maintain an exploitable working class, they fought in the early twentieth
century to appropriate from the capitalist class the society's collective
political capacity in the form of the state, either through democratic
socialism, or through what came to be known as Leninism. Though they
regard the state as an unnecessarily oppressive institution, Marxists
considered appropriating national and international-scale capitalist
institutions and resources (such as the state) to be an important first pillar
in creating conditions favorable to solidaristic economies. With the declining
influence of the USSR after the 1960s, socialist strategies pluralized,
24
though economic democratizers have not as yet established a fundamental
challenge to hegemonic and belligerent global neoliberal capitalism.
2.1 COOPERATIVES AS LEGAL ENTITIES
Although the term may be used loosely to describe a way of working, a
cooperative properly so-called is a legal entity owned and democratically
controlled equally by its members. A defining point of a cooperative is that
the members have a close association with the enterprise as producers or
consumers of its products or services, or as its employees.
In some countries, e.g. Finland and Sweden, there are specific forms of
incorporation for co-operatives. Cooperatives may take the form of
companies limited by shares or by guarantee, partnerships or
unincorporated associations. In the USA, cooperatives are often organized
as non-capital stock corporations under state-specific cooperative laws.
However, they may also be unincorporated associations or business
corporations such as limited liability companies or partnerships; such forms
are useful when the members want to allow: some members to have a
greater share of the control, or some investors to have a return on their
capital that exceeds fixed interest, neither of which may be allowed under
local laws for cooperatives. Cooperatives often share their earnings with
25
the membership as dividends, which are divided among the members
according to their participation in the enterprise, such as patronage, instead
of according to the value of their capital shareholdings (as is done by a joint
stock company).
2.2 IDENTITY
Cooperatives are based on the co-operative values of "self-help, self-
responsibility, democracy and equality, equity and solidarity" and the co-
operative principles of “voluntary and open membership; democratic
member control; member economic participation; autonomy and
independence; education and training; co-operation among co-operatives;
and concern for community”. Also, in the tradition of their founders,
cooperative members believe in the ethical values of honesty, openness,
social responsibility and caring for others. Such legal entities have a range
of unique social characteristics. Membership is open, meaning that anyone
who satisfies certain non-discriminatory conditions may join. Economic
benefits are distributed proportionally according to each member's level of
participation in the cooperative, for instance by a dividend on sales or
purchases, rather than divided according to capital invested. Cooperatives
may be generally classified as either consumer cooperatives or producer
26
cooperatives. Cooperatives are closely related to collectives, which differ
only in that profit-making or economic stability is placed secondary to
adherence to social-justice principles.
2.3 MEANING OF CO-OPERATIVE SOCIETY
Let us take one example. Suppose a poor villager has two cows and gets
ten litres of milk. After consumption by his family everyday he finds a
surplus of five liters of milk. What can he do with the surplus? He may want
to sell the milk but may not find a customer in the village. Somebody may
tell him to sell the milk in the nearby town or city. Again he finds it difficult,
as he does not have money to go to the town to sell milk. What should he
do? He is faced with a problem. Do you have any solution for him?
One day that poor villager met a learner of NIOS who had earlier read this
lesson. The learner told him, you see, you are not the only person facing
this problem. There are many others in your village and also in the nearby
village who face a similar problem. Why don’t you all sit together and find a
solution to your common problem? In the morning you can collect the
surplus milk at a common place and send somebody to the nearby town to
sell it. Again in the evening, you can sit together and distribute the money
27
according to your contribution of milk. Of course first you have to deduct all
the expenses from the sale proceeds.
That villager agreed to what the learner said. He told everybody about this
new idea and formed a group of milk producers in his village. By selling the
milk in the nearby town they were all able to earn money. After that they did
not face any problem of finding a market for the surplus milk.
This process continued for a long time. One day some body suggested that
instead of selling only milk why not produce other milk products like ghee,
butter, cheese, milk powder etc. and sell them in the market at a better
price? All of them agreed and did the same. They produced quality milk
products and found a very good market for their products not only in the
nearby town but in the entire country.
Just think it over. A poor villager, who was not able to sell five litres of milk
in his village, is now selling milk and milk products throughout the nation.
He is now enjoying a good life.
How did it happen? Who made it possible? This is the reward of a joint
effort or co–operation.
The term co-operation is derived from the Latin word co-operari, where the
word co means ‘with’ and operari means ‘to work’. Thus, co-operation
means working together. So those who want to work together with some
28
common economic objective can form a society which is termed as “co-
operative society”. It is a voluntary association of persons who work
together to promote their economic interest. It works on the principle of self-
help as well as mutual help. The main objective is to provide support to the
members. Nobody
joins a cooperative society to earn profit. People come forward as a group,
pool their individual resources, utilise them in the best possible manner,
and derive some common benefit out of it. In the above example, all
producers of milk of a village joined hands, collected the surplus milk at a
common place and sold milk and milk products in the market. This was
possible because of their joint effort. Individually it would not have been
possible either to sell or produce any milk product in that village. They had
formed a co-operative society for this
purpose.
In a similar way, the consumers of a particular locality can join hands to
provide goods of their daily need and thus, form a co-operative society.
Now they can buy goods directly from the producers and sell those to
members at a cheaper price. Why is the price cheaper?
Because they buy goods directly from the producer and thereby the
middlemen’s profit is eliminated. Do you think it would have been possible
29
on the part of a single consumer to rather buy goods directly from the
producers? Of course, not. In the same way people can form other types of
co-operative societies as well. Let us know about them.
2.4 TYPES OF CO-OPERATIVE SOCIETIES
Although all types of cooperative societies work on the same principle, they
differ with regard to the nature of activities they perform. Followings are
different types of co-operative societies that exist in our country.
1. Consumers’ Co-operative Society: These societies are formed to
protect the interest of general consumers by making consumer goods
available at a reasonable price.
They buy goods directly from the producers or manufacturers and thereby
eliminate the middlemen in the process of distribution.
2. Producers’ Co-operative Society: These societies are formed to
protect the interest of small producers by making available items of their
need for production like raw materials, tools and equipments, machinery,
etc.
3. Co-operative Marketing Society: These societies are formed by small
producers and manufacturers who find it difficult to sell their products
30
individually. The society collects the products from the individual members
and takes the responsibility of selling those products in the market.
4. Co-operative Credit Society: These societies are formed to provide
financial support to the members. The society accepts deposits from
members and grants them loans at reasonable rates of interest in times of
need. Village Service Co-operative Society and Urban Cooperative Banks
are examples of co-operative credit society.
5. Co-operative Farming Society: These societies are formed by small
farmers to work jointly and thereby enjoy the benefits of large-scale
farming. Example is farmers cooperative society Oyi Local Govt. in
Anambra State.
6. Housing Co-operative Society: These societies are formed to provide
residential houses to members. They purchase land, develop it and
construct houses or flats and allot the same to members. Some societies
also provide loans at low rate of interest to members to construct their own
houses. The Employees’ Housing Societies and Metropolitan Housing Co-
operative Society are examples of housing co-operative society.
2.5 TYPES OF COOPERATIVE GOVERNANCE
Retailers' cooperative
31
A retailers' cooperative (known as a secondary or marketing co-operative in
some countries) is an organization which employs economies of scale on
behalf of its members to get discounts from manufacturers and to pool
marketing. It is common for locally-owned grocery stores, hardware stores
and pharmacies. In this case the members of the cooperative are
businesses rather than individuals.
The Best Western international hotel chain is actually a retailers'
cooperative, whose members are hotel operators, although it now prefers
to call itself a "nonprofit membership association." It gave up on the
"cooperative" label after some courts insisted on enforcing regulatory
requirements for franchisors despite its member-controlled status.
Workers cooperative
A worker cooperative or producer cooperative is a cooperative, that is
owned and democratically controlled by its "worker-owners". There are no
outside owners in a "pure" workers' cooperative, only the workers own
shares of the business, though hybrid forms in which consumers,
community members or capitalist investors also own some shares are not
uncommon. In practice, control by worker-owners may be exercised
through individual, collective or majority ownership by the workforce, or the
retention of individual, collective or majority voting rights (exercised on a
32
one-member one-vote basis). A worker cooperative, therefore, has the
characteristic that the majority of its workforce own shares, and the majority
of shares are owned by the workforce. Membership is not always
compulsory for employees, but generally only employees can become
members either directly (as shareholders) or indirectly through membership
of a trust that owns the company.
The impact of political ideology on practice constrains the development of
co-operatives in different countries.
Social cooperative
A particularly successful form of multi-stakeholder cooperative is the Italian
"social cooperative", of which some 7,000 exist. "Type A" social
cooperatives bring together providers and beneficiaries of a social service
as members. "Type B" social cooperatives bring together permanent
workers and previously unemployed people who wish to integrate into the
labour market.
Social cooperatives are legally defined as follows: no more than 80% of
profits may be distributed, interest is limited to the bond rate and dissolution
is altruistic (assets may not be distributed) the cooperative has legal
personality and limited liability
33
the objective is the general benefit of the community and the social
integration of citizens those of type B integrate disadvantaged people into
the labour market. The categories of disadvantage they target may include
physical and mental disability, drug and alcohol addiction, developmental
disorders and problems with the law. They do not include other factors of
disadvantage such as race, sexual orientation or abuse.
Type A cooperatives provide health, social or educational services
various categories of stakeholder may become members, including paid
employees, beneficiaries, volunteers (up to 50% of members), financial
investors and public institutions. In type B co-operatives at least 30% of the
members must be from the disadvantaged target groups voting is one
person one vote
Consumers' cooperative
A consumers' cooperative is a business owned by its customers.
Employees can also generally become members. Members vote on major
decisions, and elect the board of directors from amongst their own number.
A well known example in the United States is the REI (Recreational
34
Equipment Incorporated) co-op, and in Canada: Mountain Equipment Co-
op.
The world's largest consumers' cooperative is the Co-operative Group in
the United Kingdom, which offers a variety of retail and financial services.
The UK also has a number of autonomous consumers' cooperative
societies, such as the East of England Co-operative Society and
Midcounties Co-operative. In fact the Co-operative Group is something of a
hybrid, having both corporate members (mostly other consumers'
cooperatives, as a result of its origins as a wholesale society), and
individual retail consumer members.
Business and employment co-operative
Business and employment co-operatives (BECs) are a subset of worker co-
operatives that represent a new approach to providing support to the
creation of new businesses.
35
Like other business creation support schemes, BECs enable budding
entrepreneurs to experiment with their business idea while benefiting from
a secure income. The innovation BECs introduce is that once the business
is established the entrepreneur is not forced to leave and set up
independently, but can stay and become a full member of the co-operative.
The micro-enterprises then combine to form one multi-activity enterprise
whose members provide a mutually supportive environment for each other.
BECs thus provide budding business people with an easy transition from
inactivity to self-employment, but in a collective framework. They open up
new horizons for people who have ambition but who lack the skills or
confidence needed to set off entirely on their own – or who simply want to
carry on an independent economic activity but within a supportive group
context.
2.6 CHARACTERISTICS OF CO-OPERATIVE SOCIETY
A co-operative society is a special type of business organisation different
from other forms of organsation you have learnt earlier. Let us discuss its
characteristics.
36
i. Open membership: The membership of a Co-operative Society is open
to all those who have a common interest. A minimum of ten members are
required to form a cooperative society. The Co–operative societies Act
does not specify the maximum number of members for any co-operative
society. However, after the formation of the society, the member may
specify the maximum number of members.
ii. Voluntary Association: Members join the co-operative society
voluntarily, that is, by choice. A member can join the society as and when
he likes, continue for as long as he likes, and leave the society at will.
iii. State control: To protect the interest of members, co-operative
societies are placed under state control through registration. While getting
registered, a society has to submit details about the members and the
business it is to undertake. It has to maintain books of accounts, which are
to be audited by government auditors.
iv. Sources of Finance: In a co-operative society capital is contributed by
all the members. However, it can easily raise loans and secure grants from
government after its registration.
37
v. Democratic Management: Co-operative societies are managed on
democratic lines. The society is managed by a group known as “Board of
Directors”. The members of the board of directors are the elected
representatives of the society. Each member has a single vote, irrespective
of the number of shares held. For example, in a village credit
society the small farmer having one share has equal voting right as that of
a landlord having 20 shares.
iv. Service motive: Co-operatives are not formed to maximise profit like
other forms of business organisation. The main purpose of a Co-operative
Society is to provide service to its members. For example, in a Consumer
Co-operative Store, goods are sold to its members at a reasonable price by
retaining a small margin of profit. It also provides better quality goods to its
members and the general public.
v. Separate Legal Entity: A Co-operative Society is registered under the
Co-operative Societies Act. After registration a society becomes a separate
legal entity, with limited liability of its members. Death, insolvency or lunacy
of a member does not affect the existence of a society. It can enter into
38
agreements with others and can purchase or sell properties in its own
name.
vi. Distribution of Surplus: Every co-operative society in addition to
providing services
to its members, also generates some profit while conducting business.
Profits are not earned at the cost of its members. Profit generated is
distributed to its members not on the basis of the shares held by the
members (like the company form of business), but on the basis of
members’ participation in the business of the society. For example, in a
consumer co-operative store only a small part of the profit is distributed to
members as dividend on their shares; a major part of the profit is paid as
purchase bonus to members on the basis of goods purchased by each
member from the society.
vii. Self-help through mutual cooperation: Co-operative Societies thrive
on the principle of mutual help. They are the organisations of financially
weaker sections of society.
Co-operative Societies convert the weakness of members into strength by
adopting the principle of self-help through mutual co-operation. It is only by
39
working jointly on the principle of “Each for all and all for each”, the
members can fight exploitation and secure a place in society.
2.7 FORMATION OF A CO-OPERATIVE SOCIETY
A Co-operative Society can be formed as per the provisions of the Co-
operative Societies Act, of any country. At least ten persons having the
capacity to enter into a contract with common economic objectives, like
farming, weaving, consuming, etc. can form a Co-operative Society. A joint
application along with the bye-laws of the society containing the details
about the society and its members, has to be submitted to the Registrar of
Co-operative Societies of the concerned state. After scrutiny of the
appliation and the bye–laws, the registrar issues a Certificate of
Registration.
Requirements for Registration:
1. Application with the signature of all members
2. Bye-laws of the society containing:
(a) Name, address and aims and objectives of the society;
(b) Names, addresses and occupations of members;
(c) Mode of admitting new members;
(d) Share capital and its division.
40
2.8 ADVANTAGES OF CO-OPERATIVE SOCIETY
A Co-operative form of business organisation has the following
advantages:
i. Easy Formation: Formation of a co-operative society is very easy
compared to a joint stock company. Any ten adults can voluntarily form an
association and get it registered with the Registrar of Co-operative
Societies.
ii. Open Membership: Persons having common interest can form a co-
operative society. Any competent person can become a member at any
time he/she likes and can leave the society at will.
iii. Democratic Control: A co-operative society is controlled in a
democratic manner. The members cast their vote to elect their
representatives to form a committee that looks after the day-to-day
administration. This committee is accountable to all the members of the
society.
iv. Limited Liability: The liability of members of a co-operative society is
limited to the extent of capital contributed by them. Unlike sole proprietors
and partners the personal properties of members of the co-operative
societies are free from any kind of
41
risk because of business liabilities.
v. Elimination of Middlemen’s Profit: Through co-operatives the
members or consumers control their own supplies and thus, middlemen’s
profit is eliminated.
vi. State Assistance: Both Central and State governments provide all
kinds of help to the societies. Such help may be provided in the form of
capital contribution, loans at low rates of interest, exemption in tax,
subsidies in repayment of loans, etc.
vii. Stable Life: A co-operative society has a fairly stable life and it
continues to exist for a long period of time. Its existence is not affected by
the death, insolvency, lunacy or resignation of any of its members.
2.9 LIMITATIONS OF CO–OPERATIVE SOCIETY
Besides the above advantages, the co-operative form of business
organisation also suffers from various limitations. Let us learn these
limitations.
i. Limited Capital: The amount of capital that a cooperative society can
raise from its member is very limited because the membership is generally
42
confined to a particular section of the society. Again due to low rate of
return the members do not invest
more capital. Government’s assistance is often inadequate for most of the
co-operative societies.
ii. Problems in Management: Generally it is seen that co-operative
societies do not function efficiently due to lack of managerial talent. The
members or their elected representatives are not experienced enough to
manage the society. Again, because of limited capital they are not able to
get the benefits of professional management.
iii. Lack of Motivation: Every co-operative society is formed to render
service to its members rather than to earn profit. This does not provide
enough motivation to the members to put in their best effort and manage
the society efficiently.
iv. Lack of Co-operation: The co-operative societies are formed with the
idea of mutual co-operation. But it is often seen that there is a lot of friction
between the members because of personality differences, ego clash, etc.
43
The selfish attitude of members may sometimes bring an end to the
society.
v. Dependence on Government: The inadequacy of capital and various
other limitations make cooperative societies dependant on the government
for support and patronage in terms of grants, loans subsidies, etc. Due to
this, the government sometimes directly interferes in the management of
the society and also audit their annual accounts.
2.10 IMPACTS OF COOPERATIVES IN NIGERIA
The social and economic impacts of cooperatives in
Nigeria are:-
- Employment creation
- Credit to empower members to own their own business
- Contribution to GDP though statistics not available but impact is known
- Advocacy and lobbying for better legislation
The development of cooperatives in Nigeria are:
- Committed integration of women
- Strengthening cooperatives from within and reduced dependence on
government because “assistance seekers are always vulnerable”
44
- Better services to members to enable them increase their income
- Improved business entrepreneurial skills
- Stronger cooperative identity by members, committee and managers.
2.11 CO-OPERATIVES TODAY
Co-operative communities are now widespread, with one of the
largest and most successful examples being the Mondragón
Cooperative Corporation in the Basque country of Spain. Co-
operatives were also successful in Yugoslavia under Tito where
Workers' Councils gained a significant role in management.
In many European countries, cooperative institutions have a
predominant market share in the retail banking and insurance
businesses.
In the UK, co-operatives formed the Co-operative Party in the early
20th century to represent members of co-ops in Parliament. The Co-
operative Party now has a permanent electoral pact with the Labour
Party, and some Labour MPs are Co-operative Party members. UK
co-operatives retain a significant market share in food retail,
insurance, banking, funeral services, and the travel industry in many
45
parts of the country.
In Nigeria today, cooperative movement can be traced to the
traditional savings and loans system. In 1907, the study for
establishment of formal cooperation was commissioned in 1934. This
was followed by the enactment of cooperative legislation in 1935. The
association of people is called cooperative federation of Nigeria.
1.12 PROSPECTS OF THE COOPERATIVE SOCIETY
Roy (1964:1) says that there is hardly a country in the world in which
the cooperative organizations do not exist to perform both social and
economic roles. The important roles a cooperative play in an
economy cannot be over emphasized. According to Akinwunmi
(2006:1-2) those who introduced formal cooperatives realized that
individual farmers were two small in terms of farm holdings, total
production and volume supplied. Thus they encouraged cooperative
which facilitated quick transfer of technical knowledge about the
major commodities to groups of farmers. They demonstrated the
efficacy of the cooperative approach to problem solution. They helped
46
to nurture small groups with little financial means into larger groups
by encouraging the creation of unions out of the societies.
Olesin (2007:7) opined a well-run cooperative society provides a pool
of funds from which individuals members take loans to meet
respective needs. Many cooperative societies make investments in
business ventures, stocks or real property which generate returns
that could be shared as dividends to members periodically,
depending on any surplus that accrues to the fund.
Cooperative societies allow what an individual cannot do on his own,
to be done as a group.
Cooperative methods are the most practical to adopt to meet the
needs of the mass of the people in all spheres of development.
Asaolu (2004:46) argued that cooperative societies are potentially an
important instrument of social transformation, especially in the rural
areas. Cooperative methods have proved to be useful in achieving
increased domestic production of food, industrial raw materials,
manufactured products and equitable distribution of farm inputs, farm
products and other commodities.
Lawal (2006:151-155) believed that cooperative society is a
household name and need not much propaganda as to its economic
47
importance as to its economic importance. The following benefits of
cooperatives were highlighted:
? Opportunities for cooperators to buildup capital to finance their
business through gradual but regular savings of money.
? Employment opportunities. The cooperatives are the second largest
employer of labour after government.
? Substantial contribution to the commercial growth and development
of the country by undertaking business ventures economic
productions and small scale enterprises financing.
? Promotion of physical and social development of the country
through transportation business, low-cost housing units and
community development efforts.
? Significant contribution to the national output by way of massive
production of goods and services.
? Promotion of workers empowerments. Many civil servants and
other workers own houses, cars and other properties by virtue of
being members of one cooperative society or the other.
? Apart from assisting members to participate in international trade,
cooperatives make it possible for Nigeria, through members
48
representing the cooperatives at international apex, to sit among the
community of nations.
? Cooperative leaders are being trained as good community leaders
through the training and skill acquired from the democratic principles
and cooperative practices.
? Cooperative provides ready markets for members produce.
Members are encouraged to engage in economic production and
services that enhance gross domestic product and national income.
? Retail goods are made available for the consumption of the
cooperators as well as the public at affordable prices.
? Bonuses are given to members on patronage which enhance their
personal income.
? Cooperative members readily benefited from government and non-
government organizations of expert advisory services in various
ways.
? Cooperative enjoys soft loan benefits from the governments, banks
and other similar institutions for the operation of their joint or
individual businesses.
? Functional cooperatives education and training imparted on the
members enable them to do well in their businesses.
49
? Standard of living of the cooperators has been raised thus
guaranteeing quality of members' lives.
? Cooperative is a major vehicle for a nation's industrial development.
Onuoha (1986:18) viewed that cooperative method provides the
technique for the elevation of the social and economic condition of
the masses and their direct participation in those functions of the
economy that impinge on their lives. Cooperative societies liberate
people from the states of inferiority, economic dependence and
insecurity.
A major advantage cooperative society according to (Olesin 2007:7)
is that it foists a saving habit on members, since its funds are pooled
from deductions from salaries or regular contributions in case of self
employed. Cooperative society allows what an individual cannot do
on his own, to be done as a group. Cooperative societies have
contributed to the wealth creation and reduction in poverty.
Cooperative societies in Nigeria have for decades, resolved some of
the financial challenges faced by workers or low income business
owners by using the power of numbers to provide individual needs
from resources pooled by the collective efforts.
50
In the word of Ayoola (2006:3) the impressive performance of the
savings and credit cooperatives can be seen in the establishment of
cooperative banks in the western, eastern and northern Nigeria
respectively. Even though these cooperative banks have overtime,
lost their cooperate identities with the Cooperative Bank Plc which
survived until the re-capitalization in the banking sector in December
2005, it is obvious that credit cooperatives have made and will
continue to make a positive impact as truly "people" bank. Even
cooperative had existed as a rural bank in their various local areas
before the government introduced the concept of rural banking in
1987 and the defined Peoples Bank of Nigeria (PBN) in 1988.
Cooperative society provide 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 is 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 cooperative societies in their various
types and forms. Cooperative society is meant to provide its
51
members with some benefits and opportunities which ordinarily will
cost more if it is to be derived outside the cooperatives.
1.13 PROBLEMS OF COOPERATIVE
Much as desirable as cooperative societies are in the development of
a nation, there are problems and constraints that have militated
against its effective performance of its roles in nation building. This
has made for poor performance, declining and death of some
cooperatives. 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. A true leader does not cut corners, does not inflate
contracts so as to receive kick backs, does not have favourites
among members and does not mismanage the resources.
Another problem is insufficient fund to executive cooperative
programmes. For many years the movement was unable to pay its
mandatory dues to international bodies like ICA. Thus the Nigerian
cooperative movement was derived entry, participation and gain that
would have accrued.
52
Asaolu (2004:54-56) quoted the mass mobilization for social and
Economic Recovery (MAMSER) in its studies of 1988 as identifying
the problems facing cooperative movement in Nigeria to be generally
due to political and socio-economic factors. The major of these
problems are highlighted below;
(i) Lack of adequate working capital
(ii) Bad leadership and succession problems characterized by
mismanagement
(iii) Lack of modern business techniques and liability to complete
(iv) Bad record keeping and shortage of supervisory staff
(v) Inadequate capital base to cope with the need of SMEs
(vi) Proliferation of weak cooperative societies which results from lack
of coordination of activities.
(vii) Inconsistency on the past of government in supervision and
challenging fund through the cooperative societies
(viii) Widespread illiteracy and mass ignorance of the societies
(ix) Out dated cooperative laws
(x) Government interference and manipulation of cooperative
programmes in of government policies
53
(xi) Corrupt and embezzlement of cooperative fund by leaders and
paid workers Onuohia (1986:13) identified the leadership problems as
a major setback to the performance of cooperative societies saying
that group action is more difficult to coordinate than individual actions.
Akinwumi (2006:16) affirmed that bad leadership is a critical element
that affects efficiency of cooperative movements in Nigeria. Ayoola
(2006:5) identified the ambiguous role of government on cooperative
societies as another major factors.
1.14 THE NEED FOR RE-ENGINEERING COOPERATIVES SOCIETIES
Good management requires a constant scanning of the environment. This
is done with a view to identifying changes in the operating environment, in
order to determine appropriate operational strategies to be adopted
towards achieving desired objectives. (Ayoola 2006:2) re-engineering is
done by assessment of the current operational environment to determine
the most appropriate strategies for the future. At the inception of modern
cooperatives in the country, government intended to foster and nurture
cooperatives to grow and become self reliant, as government gradually
withdraws. However, seven decades of modern cooperation in Nigeria,
government still remains in fourth control of cooperatives. The implication is
54
perpetual dependency on government resulting into erosion of self-help
and self-responsibility nature of cooperatives. In fact the so called work
place cooperatives that are supposed to demonstrate intellectuality in this
regards could not help the matter which is mostly the legal framework. The
roles of government and cooperative societies prior to the National
Cooperative Development Policy of 2002 were not clearly defined and this
had been the bane of cooperative development in Nigeria. Akinwumin
(2006:16) therefore suggested the need for total reengineering of
cooperative movement
This definition of roles of cooperatives and government by the cooperative
development policy has helped to address the most fundamental constraint
to the growth and development of cooperatives in Nigeria which is the
relationship between the government and cooperative society. However the
document is yet to be fully implemented by the government. Re-
engineering becomes necessary to sustain the good advantages of
cooperative societies in an economy. It will give the cooperative movement
a strategic repositioning to meet the need of SMEs and other economic
requirements.
CHAPTER THREE
55
RESEARCH METHODS AND PROCEDURES
3.1 RESEARCH DESIGN
The research method selected for the study is a combination of a
survey and an industrial study. The survey research method is
described hereunder that:
(i) It is a design in which primary data is gathered from members of the
sample that represents a specific population;
(ii) It is a design in which a structure and systematic research instrument
like a questionnaire or an interview schedule is utilized together with
the primary data;
(ii) It is a method in which the researcher manipulates no explanatory
variables because they have already occurred and so they cannot be
manipulated;
(iii) Data are got directly from the subjects;
The subjects give the data the natural settings of their workplaces;
(iv) The answers of the respondents are assumed to be largely
unaffected of the content in which they are brought;
(v) The impacts of the confounding factors are “controlled” statistically;
and
56
(vi) The aim of the research may span from the exploration phenomena
to hypotheses testing (stone 1995).
The survey research method has some merit, which are to be
articulated hereunder: In the survey research method, the sample of
the respondents are selected in such a way as to make it low due to
the utilization of big sample sizes, which results in generally low
sample errors.
The survey research method also has the merit that data collection
takes place in the “natural” settings of the workplace rather than an
activated laboratory. Data are got directly from the respondents. The
advantage that the survey yields data that suggests new hypothesis
is very illuminating. There is also the merit that a set of systematic
data collection instruments such as questionnaire interview schedules
and observation gadgets can either be used alone or in conjunction
with other instruments (stone, 1995).
3.2 SAMPLING
57
Spiegel (1992) observes that sampling theory is a study of the
relationship existing between a population or universe and the
samples drawn from it. The population in this study is from the senior
junior staff of the firms. In order to make conclusions of sample theory
and statistical references to be valid, a sample must be selected as
to be representative of the population (Spiegel,1992). One way in
which a representative sample may be got, is by the process of
stratified random sampling. In this research work, the technique of
simple random sampling is used to select the sample of 100
respondents from each group of the personnel, making a total sample
size of 200.
The list of all senior and junior staff of the firm is from the personnel
department of the company. The numbers were written on a piece of
paper, put in a basket and the papers were folded to cover the
numbers and one of the pieces of paper was selected at a time
without replacing it and any name corresponding to the number
becomes a number of the sample. This method of sampling without
replacement was done until the sample of 100 respondents per group
of personnel was arrived at.
3.3 Population
58
The population, in this study is the totality of the senior and junior
staff of FARMERS COOPERATIVE SOCIETY OYI LG Anambra
State Nigeria.
The sample size is 200 and this number of respondents was chosen
from the population. The rationale for studying a sample rather than
the population includes that:
1. Most empirical research work in the social science involves
studying a sample in place of the population.
2. Statistical Laws reveal that statistics composed from the
sample data are usually reasonably accurate.
3. Luckily, it is usually possible to estimate the level of
confidence that can be placed on the results.
We should note that above is only possible if the probability sample
size is large enough.
3.4 DATA COLLECTION
59
Questionnaire
As earlier stated, the primary data collection instrument in this study
is the questionnaire. In the questionnaire method of primary data
collection, heavy dependence is placed on verbal reports from the
subjects to get information on the earnings per share and standard
set.
The questionnaire has a lot of merits. It needs less skill to administer.
Questionnaire can be administered to a big number of individuals at
the same time. Also with a specific research budget, it is usually
possible to cover a broader area. The impersonal nature of a
questionnaire, its structure and standardized wording, its order of
question, its standardized instructions for recording answers might
make one to conclude that it offers some uniformity from one
measurement occasion to another (Selltiz et al, 1976).
Another merit of questionnaire is that subjects may have a bigger
confidence in their anonymity, and thus feel freer to express views
they feel might be disapproved.
Another attribute of the questionnaire that is sometimes, though not
always desirable is that it might place less pressure on the subjects
for immediate response (Selltiz et al, 1976).
60
The questionnaire also has some demerits. It has noted that for
purpose of giving dependable responses to a questionnaire,
respondents must be considerably educated. Thus one of the
demerits of the usual questionnaire is that it is appropriate only for
with a considerable amount of education. There is also demerit that
subject may be reluctant and unable.
To report on the particular subject matter. Also, if a subject
misinterprets a question or give his or her answer in a batting
manner, there is often a little that can be done to ameliorate the
situation. In a questionnaire, the information the researcher gets is
limited to the fixed alternative answer format, when a specific answer
is not available, it can lead to error (Selltiz, 1976).
There is also limitation of memory in reporting on past facts. The
researcher is not a policeman that can compel answers. That is, the
information may not be readily accessible to subject and thus the
subject may be reluctant to put forth enough alternative information
that he or she is only barely conscious of (Selltiz et al, 1996).
In this research project, a structured and undisguised questionnaire is
utilized which is made up of two parts namely, the personal data
section and the section on the data on the actual subject matter of the
61
work. The questionnaire was undisguised in the sense that the
purpose of the data collection which was to collect primary data for
writing up the researcher’s ND project was made know to the 200
respondents. The questionnaire was structured in the sense the
questions are logically sequenced and are to be asked to the
respondents in the same manner and no follow up questions are to
be allowed. Some of the questions are of the fixed alternative answer
format type.
Ten (10) of the questions have yes or no answers,
Ten (10) of the questions have alternative answer for the respondents
to tick.
The structured questionnaire has the merit that it yields data that is
easier to analysis than data produced by an unstructured
questionnaire. Also the structured nature diminishes both
researcher’s and research instrument biases. It however has the
demerit that the rigidity of the research instrument diminishes the
amount of information that could be got.
Interview
The method of communication of the research instrument is by
means of the personal interview. The method has the merit that it
62
produces a better sample of the population than either mail or the
telephone methods. It also has the merit that it gives a very high
completion and response rates. It has the merit that the interview has
a bigger sensitively misunderstandings by the respondents and gives
a chance for clarification of misunderstood questions. It has the merit
that it is a very feasible method (Selltiz et al, 1976). The personal
interview method has the demerit that it is more costly than the mail
or the telephone methods of communication of a questionnaire.
Observations
In addition to questionnaire and face-to face interviews, observation
was also carried out. This was to enable the researcher to witness by
herself the officers of this firm and to interact with these people.
3.5 FIELD WORK
The researcher and three other field data collectors did the fieldwork.
The field data collectors were other classmates also offering the Part-
time ND program, who have also offered research methodology.
They had no problem gaining entrance into the office under
consideration since one of them has a friend working there. They
63
were to be trained by the researcher on how to greet the respondents
and how to tick the questionnaire correctly and honestly.
3.6 DESCRIPTION OF DATA PRESENTATION AND ANALYSIS
TOOLS
The data presentation tools are simple bar charts, histograms, and
pictorial tables. The most important parts of a table include;
(a) Table numbers
(b) Title of the table
(c) Caption
(d) Stub or the designation of the rows and columns
(e) The body of the table.
(f) The head note or prefatory note or explanatory just before the
title.
(g) Source note, which refers to the literally or scientific source of
the table (Mills and Walter 1995)
Anyiwe (1994) has observed that a table has the following merits over
a prose information that;
(f) A table ensure an easy location of the required figure;
(g) Comparisons are easily made utilizing a table than a prose
information;
64
(h) Patterns or trends within the figures which cannot be visualized
in the prose information can be revealed and better depicted by a
table; and
A table is more concise and takes up a less space than a prose
formation:
The data is to be analysed by means of percentage, cross tabulation
and the chi-square test of population proportions for testing the two
hypothesis. Percentages express the ratio of two sets of data to a
common base of 100. The researcher made us of the computer
program called SPSS (statistical package for social science) to carry
out the computation of the hypothesis testing.
CHAPTER FOUR
65
DATA PRESENTATION AND ANALYSIS
4.1 INTRODUCTION
In the previous chapter, the research methods and procedures have
been handled. In this chapter the data presentation and analysis are to
be done. The data is to be presented by means of tables, two simple
bar charts, one histogram and one pie chart to make it amenable for
further analysis. By analysis is meant the act of noting relationship and
aggregating the set of variables with similar attributes and also
breaking the unit of their components (Mills and Walters 1995).
In this research work, the research accepts the contention of Podsakoff
and Dalton (1995) that the factual information from the data can be
used as a basis for reasoning, calculation and discussion.
Apart from the heading above, the other headings in this chapter
include:
Data Presentation,
Percentage analysis
Cross-tabulated analysis
Hypothesis testing
4.2 DATA PRESENTATION
TABLE 4.1THE SUMMARY OF THE PERSONAL DATA
OF THE RESPONDENTS
66
1
2
3
4
SEXMale
FemaleTotal
Marital StatusMarriedSingleTotal
AGE21-30 years31-40 years41-50 years51-60 years
Total
HIGHEREDUCATIONAL
QUALIFICATIONDIPLOMA
ONDHND
FIRST DEGREESECOND DEGREE
NIMTOTAL
FREQUENCY15050200
13070200
90901010200
103080204020200
Anglessubtendedin degree
1854144367236360
The marital statuses of the 200 respondents it is found that 130 of them
are married while 70 of them are single. For the ages of the 200
respondents they are 21-30 years, 31-40 years, 40-50 years, 51-60 years
with frequency of 90,10 respectively. For the educational qualification of
the 200 respondents they are diploma, OND, HND, First Degree, Second
Degree, NIM. and they have frequencies of 10, 30, 80, 20, 40 and 20
respectively.
67
Figure 4.1 below shows the simple bar chart of the data on the sex of the
respondents.
FIGURE 4.1: THE SIMPLE BAR CHART OF THE DATA ON THE SEX OF THE RESPONDENTS
GENDER OF THE RESPONDENTS
TABLE 2. GENDER OF THE RESPONDENTS
Source: from data in table 1 (generated from SPSS) statistical package for social science.
68
Frequency
percentage
Valid Percent
Cumulative Percent
MAIL 150 75.0 75.0 75.0FEMAL
E50 25.0 25.0 100.0
Total 200 100.0 100.0
160
140
120
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
MAIL FEMALE
Fre
quen
cy
Gender
From figure 4.1 above, it is shown that male respondents have the
modal frequency of 150 out of the 200 respondents while the female
respondents have the frequency of 50 of them.
Figure 4.2 below shows the simple bar chart of the data on the marital
statuses of the respondents.
FIGURE 4.2: THE SIMPLE BAR CHART OF THE DATA ON THE MARITAL STATUSES OF THE RESPONDENTS
TABLE 4.3. MARITAL STATUS OF THE RESPONDENTS
From figure 4.2 above, it is shown that the married respondents have
the modal frequency of 130 out of the 200 respondents while the
single respondents have the frequency of 70 of them.
69
Status frequency
Percentage
Valid Percent
Cumulative Percent
MARRIED 130 65.0 65.0 65.0SINGLE 70 35.0 35.0 100.0Total 200 100.0 100.0
140
120
100
80
60
40
20
0
-
-
-
-
-
-
-
-MARRIED SINGLE
Fre
quen
cy
Marital status
FIGURE 4.3: THE HISTOGRAM OF THE DATA ON THE AGES OF THE RESPONDENTS.
AGES OF THE RESPONDENTS
TABLE 4. AGES OF THE RESPONDENTS
SOURCE: From the data in Table 1.
From figure 4.3 above, it is shown that the age classes limit
are 20.5-30.5 years, 30.5-40.5 years, 40.5-50.5 years and
50.5-60.5 years with frequencies of 90, 90, 10, and 10 out of
70
020
4060
8010
0
1.0 2.0 3.0 4.0
Categories(years)
Frequency
Percentage
ValidPercentag
e
Cumulative Percent
21 TO 30 90 45.0 45.0 45.0
31 TO 40 90 45.0 45.0 90.0
41 TO 50 10 5.0 5.0 95.0
51 TO 60 10 5.0 5.0 100.0
Total 200 100.0 100.0
Fre
quen
cy
Age group
TABLE 4. 5 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS
200 respectively. This shows that this is bi-modal distribution
as the age classes of 20.5-30.5 years and 30. 5-40.5 years
have a frequency of 10.
Figure 4.4 below shows the pie chart of the data on the
highest educational qualifications of the 200 respondents.
FIG.4.4 THE PIE CHART OF THE DATA ON THE HIGHEST EDUCATIONAL QUALIFICATIONS OF THE 200 RESPONDENTS
71
Educational level
Frequency Percentage Valid Percentage
Cumulative Percentag
eDIPLOMA 10 5.0 5.0 5.0
OND 30 15.0 15.0 20.0
HND 80 40.0 40.0 60.0
FIRST DEGREE 20 10.0 10.0 70.0
SECOND DEGREE
40 20.0 20.0 90.0
NIM 20 10.0 10.0 100.0
Total 200 100.0 100.0
15%
5%
10%
80%
10%
20%
FIRST DEGREE
OND DIPLOMA
FIRST DEGREE
OND
SECOND DEGREE
HND
SOURCE: from the data in table 1.
From figure 4.4 above, the Educational Qualifications are Diploma,
O.N.D, First Degree, Second Degree and NIM and the subtended angles
in degrees are equal to 180, 540, 1440, 360, 720 and 360 and
respectively at the center of the circle.
PERCENTAGE ANALYSIS
Table below shows the percentage analysis of the responses to the yes or no
Questions
72
73
S/N QUESTIONS YES % NO % TOTAL
IN NUM.
TOTAL
IN %
1 DOES COOPERATIVE SOCIETY CREATE MPLOYMENT TO MEMBERS?
110 55 90 45 200 100
2 DO COOPERATIVE SOCIETY GRANT CREDIT TO EMPOWER MEMBERS TO OWN THEIR OWN BUSINESS?
115 57.5 85 42.5 200 100
3 DOES COOPERATIVE SOCIETY CONTRIBUTION TO GDP ?
109 54.5 91 45.5 200 100
4 DOES ADVOCACY AND LOBBYING FOR BETTER LEGISLATION ONE OF THE ROLES OF THE COOPERATIVE SOCIETY?
123 61.5 77 38.5 200 100
5 Do cooperative society offers Better services to members to enable them increase their income?
155 77.5 45 22.5 200 100
6 Cooperative society helps to Improve business entrepreneurial skills
111 55.5 89 44.5 200 100
7 Cooperative society plays a leading role in poverty reduction
130 65 70 35 200 100
8 Cooperation is unique because it promotes.* Reliance &* Empowerment
122 61 78 59 200 100
9 Is Cooperative society organization owned by the people and for the people
111 55.5 89 44.5 200 100
10 Do Cooperative society put people at the centre of their business and not capital.
128 64 72 36 200 100
11 In cooperative society, is Welfare of members is emphasized?
111 55.5 89 44.5 200 100
12 Do cooperatives engage in business activities that touch members egschools building, credit?
150 75 50 25 200 100
13 Is Creation of jobs and empowerment of members one of the functions of the firm?
100 50 100 50 200 200
4.3 CROSS-TABULATED ANALYSIS
Table bellow show the analysis of the statuses of the 200
respondents
TABLE 6. CROSS- TABULATION 1
The above table shows that the total of 100 respondents (out
of 200 said YES. this proved that The liability of the members is
unlimited
TABLE 7. Cross-tabulation 2
74
DIPLOMA OND HND
FIRST DEGREE SECOND DEGREE NIM
Total
The liability of the members isunlimited
YES NO DON’T KNOW
NOANSWER
Total
61960
-3121100
2
3110
43
2
9
11
2
7
9
39
12 19
91
263121200
939
DIPLOMA 10 10 OND 19 19 HND 14 30 47 91
FIRST DEGREE 10 9 19 SECOND DEGREE 40 40 NIM 21 21
Total 104 40 47 9 200
The society is managed by oneperson only.
YES NODON’TKNOW
NOANSWER Total
The above table indicates that The society is managed by one person
only. 104 respondents out of 200 said yes. While 40 did not agree with
the fact.
4.4 HYPOTHESIS TESTING
In attempting to arrive at decisions about the population, on the basis
of sample information, it is necessary to make assumptions or guesses
about the population parameter involved. Such an assumption is called
statistical hypothesis, which may or may not be true. The procedure,
which enables the researcher to design on the basis, is sample regards
whether a hypothesis is true or not is called test of hypothesis or test
of significance.
The null hypothesis asserts that there is no significant difference
between the statistics and the population parameters and what ever is
observed difference is there, is merely due to fluctuations in sampling
from the same population. Null hypothesis is thereby denoted by the
symbol H0. Any hypothesis, which contradicts the H0, is called an
alternate hypothesis and is denoted by the symbol H1. The researcher
used chi-square analysis.
CHI-SQUARE TEST
The c is one of the simplest and most widely used non-parametric test
in statistical work. It makes no assumptions about the population being
75
sampled. The quantity c describes the magnitude of discrepancy
between theory and observation i.e. with the help of c test we can
know whether a given discrepancy between theory and observation
can be attributed to chance or whether it results from the inadequacy
of the theory to fit the observed facts. If c is zero, it means that the
observed and expected frequencies completely coincide. The greater
the value of c the greater will be the discrepancy between observed
and expected frequencies.
The formula for computing chi-square is –
c =(O-E)2/E
Where,O=Observed frequency
E=Expected or theoretical frequency
4.5 SOFTWARE USED FOR DATA ANALYSIS:
For the data analysis and the interpretation, the researcher has
adopted advanced version of SPSS (statistical package for social
science). This application software has facilitated the researcher to
construct the frequency table, various types of charts and to find out
the valid percentage responses from the sample. By this automated
data analysis it has minimized the researcher’s time constraints and
reduced human error and give also accurate outlay of information.
Chi-Square Test (1)
76
The liability of the members is unlimited
Observed
F
ExpectedF
Residual Decision
YESNO DON’TKNOW NOANSWERTotal
10043
39
18 200
50.050.0
50.050.0
50.0 -7.0
-11.0
-32.0
AcceptReject
Reject
Reject
Chi-Square Test (2)
The society is managed by one person only.
Residuals
The observed value of the dependent variable minus the value
predicated by the regression equation, for each case. Large absolute
values for the residuals indicate that the observed values are very
different from the predicted values.
SOURCE: From the questionnaires administered.
77
Observed
F
ExpectedF
Residual Decision
YESNO DON’TKNOW NOANSWERTotal
10440
47 9 200
50.050.0
50.0
50.0
54.0 -10.0
-3.0
-41.0
AcceptedRejected
Rejected
Rejected
The formulated hypothesis that is subject to statistical test is at 5%
level of significance in testing hypothesis, the calculated value of the
test statistics is usually compared with tables of value. The critical
values of the test statistics serve as criterion value. It afforded the
basis for rejecting the null hypothesis is a function of the value of the
tested statistic.
Reject the null hypothesis if the calculated value of the test statistic is
greater than the critical value.
Accept the null hypothesis if the calculated value of the test statistic is
less than the critical value.
TEST STATISTICS
78
The liability of the members is unlimited.
The society is
managed by
one person
only.
Chi-Squaredf
73.880 3
94.120 3
note: df = degree of freedom
4.6 SUMMARY OF RESULT
Level of significance……….0.05
Critical value………………………43.0
Calculated value……………………73.880
From the above analysis, it could be seen that in the first test, The
liability of the members is unlimited, the calculated value is greater
than the critical value so we reject the hypothesis.
In the second test which state that The society is managed by one
person only, the level of significance is 0.05, the critical value is 44
while the calculated value from the test statistics table is 94.120.
Looking the data above, it shows very clear that the calculated value is
greater than the critical value so we reject the hypothesis.
CHAPTER FIVE
FINDINGS, SUMMARY AND CONCLUSION
5.1 FINDINGS
-A co-operative society is a voluntary association of individuals
having common needs who join hands for the achievement of
79
common economic interest. Its aim is to serve the interest of the
poorer sections of society through mutual help.
-Membership of co-operative societies is voluntary and open to all. It
is democratically managed and it has a separate legal existence .
The main motive is to provide service to the members. It works on the
principle of self help through mutual cooperation of members.
A co-operative society can be formed under the Co-operative Act,
with a minimum of ten members. For registration, an application
along with bye-laws of the society has to be submitted to the
Registrar of Co-operative Societies.
-Co-operative societies may be classified as follows:
1) Consumers’ co-operative society - formed to eliminate the role of
middlemen and supply high quality goods and services at reasonable
price to consumers.
2) Producers’ co-operative society - formed to help producers to
procure raw material, tools, equipment etc.
80
3) Co-operative marketing society - formed to ensure a favourable
market for small producers to sell the output and get a good return on
sale.
4) Co-operative credit society - formed to provide financial help to
members through loans at low interest rates. They encourage saving
habit among members.
5) Co-operative farming society - formed to achieve economies of
large scale farming and maximization of agricultural output.
6) Housing co-operative society- formed to provide residential houses
to members by constructing them or providing loans to members to
construct their own houses.
Co-operative societies are easy to form and have a stable life.
Membership is open to all and members have limited liability. There is
democratic management based on ‘one-man, one vote’. The
societies have stable life and they enjoy government patronage.
They suffer from insufficient capital, problems in management and
conflict among members. There is lack of motivation in members due
81
to absence of direct reward for individual effort. Excessive
government regulation and control may also pose problems for them.
Co-operative societies are suitable in protecting exploitation of
weaker sections of society and promoting their economic interest. It is
ideal where service motive, and not profit, is the priority.
5.2 SUMMARY
Cooperative method remains the vibrant economic technique of
poverty eradication, wealth creation, job creation and rural
development and SMEs financing. There are various problems
militating against the performance of cooperative societies in Nigeria.
Also the changing world of technology poses great challenges to the
efficiency of cooperative societies in Nigeria most cooperative
societies are operating with inadequate capital to cope with the need
of SMEs.
5.3 RECOMMENDATION
82
? Immediate review of the cooperative law in line with the cooperative
Development Policy that would re-position the Director of
cooperative, service was suggested.
? a base line study; to allow data base and statistics on registered
societies, to allow data base and statistics on registered societies,
members savings mobilized, total reserves, loans disbursement,
percentage recovered, nature and types of cooperative societies
existing in the country, that are required for effective planning.
? Research suitable for planning more effective cooperative
education and training programmes for committees, members and
employees of cooperative is highly essential to fit with the changing
environment.
? Government should liberalize cooperatives by loosening its grip on
cooperatives to allow for self-help and self-responsibility principles of
cooperativeness.
? Investment in Information and Communication Technology (ICT)
has become imperative for a success-drive cooperatives. On-line
update of members' passbooks, loan application, etc should be
incorporated into the business of cooperatives. Otherwise, such a
cooperative will be living in the past.
83
? A guided recapitalization of the cooperative sub-sector
? Fund channelization through the cooperative societies by the
Government, NGOs and commercial banks for sustainable SMEs.
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84
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85
Lawal, T.O 2006: Introduction to modern cooperative management, Akure, alibi-
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