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PROBLEMS AND

PROSPECTS OF

COOPERATIVE

SOCIETY IN

NIGERIA
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(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

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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 __________

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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.

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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..

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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.

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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.

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Functional cooperatives education and training imparted on the members

enable them to do well in their businesses.

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.

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TABLE OF CONTENTS

Cover page - - - - - - - i

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

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CHAPTER TWO

REVIEW OF THE RELATED LITERATURE

2.0 ORGANIZATION AND IDEOLOGICAL

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

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2.11 CO-OPERATIVES TODAY - - - - 33

2.12 PROSPECTS OF THE COOPERATIVE

SOCIETY - - - - - - - 34

2.13 PROBLEMS OF COOPERATIVE - - - 40

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

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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

FINDINGS, SUMMARY AND CONCLUSION

5.1 FINDINGS - - - - - - - 68

5.2 SUMMARY - - - - - - - 70

5.3 RECOMMENDATION - - - - - 71

5.4 REFERENCES - - - - - - 73

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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

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

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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.

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

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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

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.

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(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

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

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- 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:

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.

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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.

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:

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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.

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

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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

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.

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1.6 THE STRUCTURE OF THE WORK
This 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

5 Findings, Summary, and conclusion

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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

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

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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.

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.

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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

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

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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,

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.

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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

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

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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

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

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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

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.

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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

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.

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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

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.

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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

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

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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

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

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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

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

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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

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

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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

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.

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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.

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.

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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.

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.

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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.

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.

38
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

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.

39
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

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

40
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.

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

41
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

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.

42
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

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

43
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.

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

44
- 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”

- 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.

45
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

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

46
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

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

47
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

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.

48
? 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

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.

49
? 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.

? 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.

50
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.

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

51
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

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

52
cooperative movement was derived entry, participation and gain that

would have accrued.

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

53
(x) Government interference and manipulation of cooperative

programmes in of government policies

(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

54
withdraws. However, seven decades of modern cooperation in Nigeria,

government still remains in fourth control of cooperatives. The implication is

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.

55
CHAPTER THREE

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;

56
(v) The impacts of the confounding factors are “controlled” statistically;

and

(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).

57
3.2 SAMPLING

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.

58
3.3 Population

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.

59
3.4 DATA COLLECTION

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.

60
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).

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).

61
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

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.

62
Interview

The method of communication of the research instrument is by

means of the personal interview. The method has the merit that it

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.

63
They had no problem gaining entrance into the office under

consideration since one of them has a friend working there. They

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;

64
(g) Comparisons are easily made utilizing a table than a prose

information;

(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.

65
CHAPTER FOUR

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

66
4.2 DATA PRESENTATION

TABLE 4.1
THE SUMMARY OF THE PERSONAL DATA
OF THE RESPONDENTS

1 SEX FREQUENCY
Male 150
Female 50
Total 200
Angles
2 Marital Status subtended
Married 130 in degree
Single 70
Total 200

3 AGE
21-30 years 90
31-40 years 90
41-50 years 10
51-60 years 10
Total 200

4 HIGHER
EDUCATIONAL
QUALIFICATION
DIPLOMA 10 18
OND 30 54
HND 80 144
FIRST DEGREE 20 36
SECOND DEGREE 40 72
NIM 20 36
TOTAL 200 360

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

67
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.

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


Frequency

160-

140-

120-

100-

80

60 --

40 -

20
- TABLE 2. GENDER OF THE RESPONDENTS
0 - Frequency percentage Valid Cumulative
MAIL Percent
FEMALE Percent
MAIL 150 Gender 75.0 75.0 75.0
FEMALE 50 25.0 25.0 100.0
Total 200 100.0 100.0

68
Source: from data in table 1 (generated from SPSS) statistical
package for social science.

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

140 -

120 -

100 -
Frequency

80 -
60 -
40 -
20 -
0 -
MARRIED SINGLE
Marital status

TABLE 4.3. MARITAL STATUS OF THE RESPONDENTS

69
Status frequency Percentage Valid Cumulative
Percent Percent
MARRIED 130 65.0 65.0 65.0
SINGLE 70 35.0 35.0 100.0
Total 200 100.0 100.0

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.

FIGURE 4.3: THE HISTOGRAM OF THE DATA ON THE AGES OF THE


RESPONDENTS.

AGES OF THE RESPONDENTS


100
80
60
Frequency

40
20
0

1.0 2.0 3.0 4.0


Age group
Categories Frequency Percentage Valid Cumulative
Percent
(years) Percentage
TABLE 4. AGES OF THE RESPONDENTS
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 70
5.0 5.0 100.0

Total 200 100.0 100.0


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 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
OND DIPLOMA
FIRST DEGREE
5%
15% OND
SECOND DEGREE 10%

20%
HND
80%
FIRST DEGREE 10%

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TABLE 4. 5 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS
Educational Frequency Percentage Valid Cumulative
level Percentage Percentage
DIPLOMA 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 40 20.0 20.0 90.0


DEGREE
NIM 20 10.0 10.0 100.0

Total 200 100.0 100.0

SOURCE: from the data in table 1.

72
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

73
S/ QUESTIONS YES % NO % TOTAL TOTAL
N
IN NUM. IN %

1 DOES COOPERATIVE 110 55 90 45 200 100


SOCIETY CREATE
MPLOYMENT TO
MEMBERS?
2 DO COOPERATIVE 115 57.5 85 42. 200 100
SOCIETY GRANT 5
CREDIT TO EMPOWER
MEMBERS TO OWN
THEIR OWN BUSINESS?

3 DOES COOPERATIVE 109 54.5 91 45. 200 100


SOCIETY 5
CONTRIBUTION TO GDP
?
4 DOES ADVOCACY AND 123 61.5 77 38. 200 100
LOBBYING FOR BETTER 5
LEGISLATION ONE OF
THE ROLES OF THE
COOPERATIVE
SOCIETY?
5 Do cooperative society 155 77.5 45 22. 200 100
offers Better services 5
to members to enable
them increase their
income?
6 Cooperative society 111 55.5 89 44. 200 100
helps to Improve 5
business
entrepreneurial skills
7 Cooperative society 130 65 70 35 200 100
plays a leading role in
poverty reduction

8 Cooperation is unique 122 61 78 59 200 100


because it promotes.
* Reliance &
* Empowerment
9 Is Cooperative society 111 55.5 89 44. 200 100
organization owned by 5
the people and for the
people
10 Do Cooperative society 128 64 72 36 200 100
put people at the
centre of their business
and not capital.
11 In cooperative society, 111 55.5 89 44. 200 100
is Welfare of members 5
is emphasized?

12 Do cooperatives 150 75 50 25 200 100


engage in business
activities that touch
members eg
74
schools building,
credit?
13 Is Creation of jobs and 100 50 100 50 200 200
empowerment of
4.3 CROSS-TABULATED ANALYSIS

Table bellow show the analysis of the statuses of the 200

respondents

TABLE 6. CROSS- TABULATION 1


The liability of the members is
unlimited
NO
YES NO DON’T ANSWER Total
KNOW 2 12
19
91
DIPLOMA 6 2 2
OND 19 7
HND 26
FIRST
60 31 31
DEGREE - 10 9 21
SECOND 31 9 200
DEGREE 21
NIM
Total 100 43 11

39 939
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

The society is managed by one


person only.
DON’T NO
YES NO Total
KNOW ANSWER
DIPLOMA 10 10

OND 19 19
HND 14 30 47 91
FIRST
DEGREE 10 9 19
SECOND
75
DEGREE 40 40
NIM 21 21
Total 104 40 47 9 200
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.

76
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

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.

77
Chi-Square Test (1)

The liability of the members is unlimited

Observed Expected Residual Decision


F F
YES 100 50.0 50.0 Accept
NO 43 50.0 -7.0 Reject
DON’T
KNOW 39 50.0 -11.0 Reject
NO 50.0
ANSWER 18 -32.0 Reject
Total 200

Chi-Square Test (2)

The society is managed by one person only.

Observed Expected Residual Decision


F F
YES 104 50.0 54.0 Accepted
NO 40 50.0 -10.0 Rejected
DON’T
KNOW 47 50.0 -3.0 Rejected
NO
ANSWER 9 50.0 -41.0 Rejected
Total 200

Residuals

The observed value of the dependent variable minus the value

predicated by the regression equation, for each case. Large absolute

78
values for the residuals indicate that the observed values are very

different from the predicted values.

SOURCE: From the questionnaires administered.

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
The liability of the The society is
members is
unlimited. managed by

one person

only.
79
Chi-Square 73.880 94.120
df 3 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

80
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.

81
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

82
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

83
? 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.

84
? A guided recapitalization of the cooperative sub-sector

? Fund channelization through the cooperative societies by the

Government, NGOs and commercial banks for sustainable SMEs.

REFERENCES

Abrahamsen, M.A (1976) Cooperative Business Enterprises MC Craw Hill books

company New York

Akinwumi, J. (2006): Road Map to re-engineering Cooperatives in Nigeria; A

paper presented at the south west cooperative leaders conference, organized by

85
cooperative federation of Nigeria South west zone at Obisesan Hall, Ibadan,

September 7th.2006.

Asaolu, T. O.(2004): Evaluation of the performance of the Cooperative

Investment and Credit Societies (CICS) in financing Small-Scale Enterprises

(SSEs) in Osun State, Nigeria.

Ayoola (2006): Nigerian cooperative movement: "Yesterday, Today and

tomorrow" A paper presented at conference for cooperative leaders and

members organize by cooperative federation of Nigeria South west Zone.

Epetimehin, F. M. (2006): Understanding the Dynamics of Cooperatives, Tadon

Publishers, Ibadan.

Frank, R.H Gilorich T & Regan, D.T (1999): "Does studying Economics Inhibit

cooperation" gnu@gnu.org: free software foundation incorporation Boston,

U.S.A.

International cooperative Alliance congress (ICA) (1995), Centennial Congress

and General Assembly, Manchester.

International Labour Office, 1960, cooperative management and administration

Geneva.

86
Lawal, T.O 2006: Introduction to modern cooperative management, Akure, alibi-

Eyo&co Ltd.

Olesin, Ayo (2007) "making Cooperative societies work for you", Sunday

business in Sunday Punch Newspaper 18th, February, 2007 pg7.

Onuoha, Enyeribe 1986: Principles of cooperative enterprise, Enugu Nigeria,

Express publishing company ltd.

Rana, J.M 1970: AO,s and principles of cooperatives and Applications in different

Asian countries (in Ilo Reports, Geneva).

Roy, I. (1964). Cooperatives Today and Tomorrow, Genera.

Reeves, M (2003): A wealth of opportunities in a World of Limits: Free

Enterprises. Economics of Cooperation, Federal Reserve Bank of Dallas;

www.dallasfed.org

The Nation, Newspaper, "President Obasanjo Lunches National Policing on

consumer credit and out sourcing NAPPCO", editorial, Friday, January12, 2007,

pg.4

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Wikipaedia (2006). Economic Development, www.wikipaedia.com

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