CHAPTER ONE

Introduction

Cooperative societies are the body of people of like minds who voluntarily unite together to pool

their resources together in meeting the members' social, economic and political needs. Different

people with diverse professions come together to establish cooperative societies leading to

different types of cooperative societies. Teachers’ cooperative society is owned and controlled

by teachers in promoting their own economic strength (Owojuyigbe, 2007). Members who

belong to this cooperative society are expected to raise funds in financing the cooperative

society. Availability of fund is an essential tool in cooperative society formation or starting up

and running any individual business or organization. Fund is required in financing plans for

expansion after formation, diversification and productivity enhancement, and cooperative

societies for effective coverage of member needs (Krishna, 2001). Therefore, cooperative society

relies so much on fund availability to fulfill the purpose of establishment, which is to allow

members to promote their economic strength in different areas such as starting up or expanding

businesses, educating their wards, building a house, acquiring landed properties and some other

assets, financing health care among other things.

The first documented cooperative settlement in human history was that started by the Essence at

Eiricydi on the coast of the Dead Sea (Odey, 2009). All of them were free and owned everything

in common. In Britain and France, workers, as a result of the impact of the Industrial Revolution

spontaneously organized cooperative societies of all sorts, while intellectuals and philanthropists

such as Owen in 1858, and his contemporariesinitiated carefully planned, ideologically

motivated corporative communities. In England, the idea of establishing cooperative

organization was mooted and invigorated by Robert Owen in collaboration with his Rochdale
pioneers (Obasse, 2012; Ebi, 2014). This organization began in Road Lane, Rochdale in 1844.

This particular group of weavers led by Charles Howath met regularly throughout 1844 to

discuss on what could be done to improve their working conditions, and of the less privileged

workers, artisans, consumers, traders and farmers who were relegated to the background by the

capitalist economic system prevalent during this period and arising from the aftermath of the

Industrial Revolution.

The Rochdale principles which guided this early cooperative society stipulated the following as

its modus operandi: open and voluntary membership; any consumer was free to join, and there

were no restrictions to sex, race or social status; democratic control of one man, one vote;

political and religious neutrality, limited interest on capital, cash trading at market price, all sales

were made at prevailing prices for cash only, patronage dividends proportional to their

purchases, and the regular education of their members. Latercooperators added eight more

principles which included the first successfully organized cooperative society (Ebi, 2014).

In Nigeria, before the modern cooperatives were put in place, there existed cooperative societies

that were indigenous to the local people. These includes the labour clubs, the contribution clubs,

and the indigenous and traditional farmers’ societies which functioned at nearly all villages and

community levels (Obasse, 2012; Crowder, 1973). The modern cooperative movement in Nigeria

started when C. F. Strickland was appointed in 1933 to look into the possibility of introducing

cooperative societies into the country. Strickland’s report came out in 1934, and reported that

cooperatives be established in Nigeria for the following reasons: to eliminate exploitation by

middle men; for producers to deal directly with the entrepreneurs, producers and buyers; for

members to benefit from the extension of the Department of Agriculture; other requisite know-

how to produce high quality cotton, cocoa, and palm produce to get higher prices; to provide
production credit to members; and to do away with high interest loans. To promote cooperative

spirit in a social system that already provides the fundamental rudiments of cooperatives

(Oshuntogun, 1981; Ijere, 1975). Sequel to Strickland’s report, the first Cooperative Ordinance

in Nigeria was passed in 1935. Later in 1936, Faulker was appointed the Registrar of

Cooperatives and the control of cooperatives gradually shifted from the Agricultural Department,

and it empowered the registrar of cooperatives to register, inspect, audit, hold inquiries and settle

disputes and liquidate unsuccessfully registered cooperatives.

Cooperative societies have been closely identified with provision of financial services in the

rural sector. Since its inception, cooperative in Nigeria has been viewed as a veritable tool for

national development particularly in the area of socio-economic development of rural areas.

Cooperative societies are organized or formed to accomplish one or more functions, including

production, purchasing, supplying, marketing and provision of financial services to the members

among others. It is therefore not surprising that so much emphasis is being placed on the efficacy

of cooperatives as a welfare intervention tool.

Cooperative character provides an independent identity to cooperative organization which

emanates from the statements on definitions, values and principles approved by International

Cooperative Alliance Congress held in Manchester in September, 1995. All countries of the

world where cooperative form of organization is in operation have to ensure that these values

and principles are being adhered to by cooperatives. Government of India and State

Governments in right earnest and trust of cooperators and international agencies, always make

attempts to amend cooperative laws to allow for developing sound cooperatives.

Cooperative is based on the value of self-help, self-responsibility, democracy, equality, equity

and solidarity. In the tradition of their founders, cooperative members believe in the ethical

values of honesty, openness, social responsibility, and caring for others.

A cooperative can fulfill its members’ economic, social and cultural needs and aspirations if it is

managed as a jointly owned democratically controlled business enterprise. It is the business or

economic activity which generates income. Sustained efforts to increase income of members will

ensure their economic development, at the first step, followed by social and cultural

development. Thus, cooperative can genuinely serve the cause of members on long term basis if

it operates as business institution geared to deal with competition and succeed.

A cooperative must function by integrating cooperative institutional and business dimensions to

facilitate accomplishing its objectives and contribute significantly in socio-economic

development of its members.

1.1 Background of Study

Okeke (2011) agreed that modern cooperatives first found a home in Britain, though the

movement was occurring almost simultaneously in various European countries. Kohls and

Downey (2002) observed that workers in Britain cried out to Government to redress their

sufferings and got no help, they turned to humanitarians and social reformers. Robert Owen and

Dr. Williams King of the Briton cooperative Movement, were pioneer leaders of cooperatives. In

France, the same suffering workers as a result of the evil of the industrial revolution led to the

formulation of socialist societies. Charles Fourier, Philips Buzuchez and Louis Blanc, were the

pioneer cooperatives trained in France.

In Nigeria, okeke (2001) observed that the modern cooperatives as known today started in 1935

when the enactment of the Nigerian ordinance of cooperative societies came into operation with
the appointment of major Haig F.E.C as the registrar of cooperative societies. Nigerian

membership of cooperatives has increased and expanded across the states and local governments

of the federation with a high built up capital. Many cooperatives are in operation with

involvements in different facets of the national economy.

Ivo Local Government Area of Ebonyi State is the study area. It has a population of 129,068

people based on the 2006 census (NPC.2006). The local government Area is composed of the

following communities: Ishiagu, Isiaka, Ndiokoro ukwu, Nzerern and Obinagu. The people are

mostly farmers and some few engage in stone crushing to supplement their farm income. Ivo is

known for its inhabitants engage in various farmers ‘groups and associations. Agriculturally, Ivo

Local Government Area is known beyond Ebonyi State frontiers. The aim of the study is to find

out the contributions and impacts of Cooperatives to members and rural development in Ivo

Local Government Area of Ebonyi State, Nigeria. This study will be narrowing its research

towards Agricultural cooperative societies, because that the major cooperative societies that exit

within above stated area of study.

1.2 Statement of Problem

Development is one of the main goals that all communities try to achieve in order to improve

their living standards (Mohammed 2004). Agricultural cooperative have played an important role

in rural development through development of agriculture. Agricultural cooperatives are

considered to be the most important organization that pay attention and try to support rural

development in general and agricultural development especially through the activities and

services achieved for the sake of farmers (Agbo, 2010) Agricultural cooperatives are considered

as one of the important economic and social organization in rural communities. They play very

important roles in agricultural development by providing the farmers with production input, such
as fertilizers, seeds, other chemical substances, etc. They also provide farmers with the necessary

knowledge and skills. These are about the agricultural new methods that aim at increasing the

agricultural production, and therefore, promoting the rural societies. Cooperatives globally, play

major role in the rural society. They play major role in the agricultural food industries in various

sectors and local setting of Nigerian rural Communities. Despite these advantages, the problem

identified is that contributions of Agricultural cooperative Societies in Ivo local Government

Area of Ebonyi State, Nigeria have not been document and hence this study, also cooperative

society fund creation has been said to be significantly affected by insufficient capitalization,

dishonesty on the part of members, management and the board of directors and mismanagement

of cooperative businesses, which has affected the efficiency and effectiveness of cooperative

societies to promote the economic strength of members (Adeniyi, 2018).

1.3 Objective of the Study

The broad objective of the study is to evaluate the contribution of agricultural cooperative

societies to members in Ivo Local Government Area of Ebonyi State, Nigeria while the specific

objectives are to:

1. Determine the social economic characteristics of agricultural cooperatives members.

2. Examine the various types of existing cooperative societies in the study area.

3. Determine their contributions to their members in Ivo LGA , Ebonyi State.

4. Examine their problems relating to improvement of their welfare in the study area.

1.4 Research Questions

The following are the research questions this study would be looking into;

1. What are the social economic characteristics of agricultural cooperatives members.

2. What are the various types of existing cooperative societies in the study area.
 3. What are their contributions to their members in Ivo LGA , Ebonyi State.

4. What are the possible solution to the improvement of members welfare in the study area.

1.5 Research Hypotheses

For the purpose of this study, the following hypotheses were formulated to guide this study:

Ho1: The opinion of members differ significantly on the socio-economic characteristics of

agricultural cooperative members.

Ho2: The opinion of members differ significantly on cooperative contribution on them.

Ho3: The opinion of members differ significantly to the problems affecting the welfare from

the cooperative on its members.

1.6 Significance of the Study

Cooperative societies are formed based on certain principles which distinguished them from

other business organizations. Olayide (1975) and Whethman (1968) assert that there is a great

distinction between cooperative societies and non-cooperative businesses. The introduction of

cooperative societies, Whetman argues, is to remove the evil effects of the capitalist system of

production which did not go down well with the common man’s aspiration. Cooperative societies

are known to bring about low prices of goods. Goods are bought directly from manufacturers at

factory prices and sold to members at controlled prices thereby making their selling prices to be

lower than the operating prices in the open market. Members, for instance, have equal voting

rights, equal opportunity to participate in the management and control of the societies and make

inputs to policies (Warbasi, 1947). This organization is noted for its easy formation because it

does not require much capital or costly legal procedure to bring it into existence. It has continuity

because the death of a member does not affect the continuity of this business organization.

Advertisement is also not needed in selling the goods and services of the societies since majority
of the goods are bought by their members. Education benefits are given to members in areas of

production, distribution and buying and selling of goods and services through bulletins. The

societies have joint pride of ownership. Thus, they are jointly owned and managed by the

members. They take decisions and make policies jointly. This infuses a sense of belonging into

the members, propelling them to bring out their best (Draheim, 1952; Epere, 1978; Abasiekong,

1994). A form of high standard of living is encouraged among members unlike some other

known business organizations. For example, the societies provide essential commodities to

members at appropriate prices thereby enabling them to consume goods they would ordinarily

not have been able to consume or acquire. They also encourage members to save and give credit

facilities to the needy members. All these help the standard of living of members to improve

considerably. Cooperatives sell their goods at controlled and stabilized prices, and also regulate

the quantity of goods needed. These activities help to fight inflation and deflation. There is good

cordial inter personal relationship among members of the society and their employed staff

(Omeje, 2003; Digby and Greffon, 1988). Because of its benefits to the people, in Kenya, groups

of farmers on land settlements are encouraged to join cooperatives to undertake purchase,

supply, marketing and hulling of such goods and services like cattle, pigs and coffee. Osagie

(1976) is of the view that the cooperative movement if properly organized can facilitate the

distribution of goods to all parts of the country at affordable prices. In addition, the cooperative

provides avenue through which the masses may be involved in the production and distribution of

goods and services. The participation of the masses in the economy of their country, Osagie

argues, should lead to social peace and harmony.

1.7 Scope of the Study

The study of this project work will be based on cooperative society. Member’s welfare and the

government commitment in developing it. Its purpose is to limit to be topic area alone but like an

in house  endeavor is to go a little further to give the reader more knowledge of cooperative

societies and their activities.. The study is limited to Ivo LGA, Ebonyi State Cooperative and

Thrift Society. Data will be obtained from the various Co-operative and Thrift Society, on the

socio-economic characteristics of the members which include age, sex, marital status, education,

religion, occupation etc. Though, emphasis was solely on their thrift and credit functions and

how has it better their lot. The society was chosen because it is a fairly big cooperative society,

well recognized in Ivo LGA metropolis and also registered by the government of the state.

The project would also unveil more hidden knowledge of cooperative societies. Due to finical

constraints certain ingredients might be missing.

1.8 Limitation of the Study

During the course of this work, certain constraints were encountered:

Cost: the cost of thorough research is not what can be afforded by a student. The prices of

materials needed for this work has gone up and transport fare has also gone up.

Time: the time was one of the limitations in the process of carrying out this research work.

Lack of Cooperation from the Respondents: The researcher-encountered challenges in

the course of getting quality information from exporters in order to produce adequate and

relevant information, But after much talk to convince them of the relevance of the

questionnaires, they yielded.

1.9 Definition of Terms

1. Cooperative: according to Webster dictionary it defined cooperative “working with

another person or group to do something.

2. Hypothesis: it is the means of structuring research problems and it’s usually formulated

on the basis of a research problem or question.

3. Member: someone or something that belongs to or is a part of a group or an

organization.

4. Society: people in general thought of as living together in organized communities with

shared laws, traditions, and values. It’s also defined as the people of a particular country,

area, time, etc., thought of especially as an organized community.

 CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Framework

Concept of Cooperative Society

The term cooperative is derived from the Latin word co operatic, where the word co-means with”

and opera means to work” thus cooperative means working together. So those who want to work

together with some common economic objective can form a society, which is term as

cooperative society” it is a voluntary association of persons who work together to promote their

economic interest. The International Cooperative Alliance (ICA) in its Statement on the

Cooperative Identity, in 1995, defines a cooperative as “an autonomous association of persons

united voluntarily to meet their common economic, social, and cultural needs and aspirations

through a jointly-owned and democratically-controlled enterprise.” It is a business voluntarily

owned and controlled by its member patrons and operated for them and by them on a nonprofit

or cost basis (UWCC, 2002). It is a business enterprise that aims at complete identity of the

component factors of ownership, control and use of service, three distinct features that

differentiate cooperatives from other businesses (Laidlaw, 1974).

The International Labour Organization (ILO) In 2004, define cooperative societies as an

association of persons usually of limited means who have joined together to achieve common

economic goals through the formation of democratically controlled business organization,

making equitable contribution to the capital required and accepting a fair share of risk and

benefit of undertaken.
Encyclopedia American (2004) refers to cooperative societies as an organization establish by

individual to provide themselves with goods and services or to produce and dispose the product

of their labour. This means of production and distribution are thus owned in common and the

earning reverts to the members, not on the basis of their investment in the enterprise but in

proportion to their patronage or personal participation in it.

Helms (2005), on the other hand defined cooperative societies as a voluntary association of

persons having mutual ownership in providing themselves some needed services on non profit

basis usually organized as a legal entity to accomplish objective through joint participation of it

members. Cooperative is an association open to all and granting equal right and responsibility

(democracy and autonomy) to members engage in all economic enterprise and share of profit

which are bestowed on members in proportion to their use of the enterprise itself without regard

to their share in the society. (Standing, 2008) cooperative society is an organization people who

come together voluntarily for the purpose of contributing their wealth in terms of cash and ideas

to solve their socio-economic and cultural problems accepting to bear the risk together and

enjoying the proceeds by themselves (Okechukwu, 2001). Food and Agricultural Organization

(FOA) 2003, put it that there is no other globally tested system on the horizon than cooperative.

Cooperative society is “a group of persons with at least one economic interest variable member”.

The aim of the group is to meet their common economic needs by joint action based on mutual

help. The means to achieve this is to establish a common enterprise of which goods and services

are made available to the member as customer and employee. (Duelfer, 2006).

According to Ogbu (2007), the word cooperative is a collective noun as well as the cooperative

society. Cooperative which means to work together among a group of persons originated from

time immemorial. It means more than people working together to achieve commonly felt need.
Hence it is as old as man otherwise, instinctive. Okoli (2006), defined a cooperative as an

organization for promoting the economic interest of its members. According to Okoli (2006), it is

a free and voluntary business organization jointly owned by the people with identical economic

needs and having equal voices in it management and deriving proportionate benefit and services

from it.

According to Ibe (2002), cooperatives are one of the possible organizational forms for

conducting legitimate business in a market economy where goods are freely bought and sold in

the open market. Chilokwu (2006), gives further insight into the nature by stating that, “a

cooperative is a formal organization formed by person, usually of limited means, who voluntarily

come together, for the achievement of a common economic objectives involving the formation of

a democratic controlled business organization, and who have agreed to make equitable

contributions to the required capital of the organization as well as to accept a fair share of the

risks and benefit of their undertakings”.

Cooperatives in Nigeria

The cooperative movement in Nigeria has grown in size over the years. As of 2002, there were

more than thirty-six thousand cooperatives (FMA&RD, 2002) which grew to about 82, 460

cooperatives in 2010 (EFInA, 2012). With more than half (50.48%) of the Nigerian populace

being classified as a rural population up till 2017 (The World Bank, 2019), the development of

rural centres through cooperation is of significant interest to Nigerian policy. The government of

Nigeria through its Department of Cooperatives (DRC) have placed great emphasis on promoting

the welfare of rural dwellers through cooperative organizations. Cooperatives have since become

popular across geographical entities in Nigeria. The dual form of cooperative as both the social

and economic organizations increases its potential as a great source of help to the poor (Othman
et al., 2012). Despite the proliferation of cooperatives in Nigeria, it is not clear whether or not

cooperative membership contributes to the income generation of the rural poor. A

disproportionately large number of the Nigerian population still live in abject poverty, with the

poverty index rising from 46.3% in 1985 to 69.3% in 2010. The majority of Nigerians still live

on less than one dollar a day despite the nations’ estimated GDP at $86 billion in 2010 and

$521.8 billion in 2013 respectively (The World Bank, 2015). Also, income inequality and

unemployment in Nigeria are sources of concern for the well-being of the majority of the people

in the country. The inequality level increased from 44.7 per cent in 1985 to 50.3 per cent in 1990.

Although, it reduces insignificantly to 44.8 per cent and 40 per cent in the year 2000 and 2011

respectively (World Inequality Database, 2014), the level of unemployment in Nigeria revolves

around 21% to 24% between 2010 and 2014 (NBS, 2014).

Cooperative organizations in Nigeria owed their existence to the colonial era. The prospect of

cooperative establishment in the country was first accepted in 1935 following the submission of

Mr C.F. Strickland report. Consequently, a pioneer cooperative federation of Nigeria (CFN) was

formed in 1945, and duly registered in 1967 (Kareem et al., 2012). The subsequent success of a

cooperative organization in Nigeria thrived on a traditional savings and loans system that

provides an easy and accessible platform for financial access in rural areas. The pattern of

cooperative operations in Nigeria was similar and comparable to most African countries. In most

developing countries within the African continent, cooperative models of development were

introduced by the colonialists to facilitate the growth and export of agricultural products.

Subsequently, local authorities sustained the cooperative model to implement developmental

agenda, especially, for input distributions and marketing of agricultural commodities. Following

these periods, the outcome of globalization and liberation policies resulted in the evolution of
cooperation organizations in several rural communities in Africa. However, government

interventions, weak management, mistrust as well as poor regulations led to the failures of many

rural cooperatives (Hannan, 2014).

At independence, most African nations formed cooperative policies and legal frameworks that

enable direct management of cooperatives affairs. Ministries and departments were set up to

manage cooperative affairs. Cooperatives became the sole agents of Government marketing

boards responsible for processing, marketing and export of agricultural produce (Develtere,

2008). Poverty alleviating policies including credit administration were subsequently

administered through cooperative societies. Through this, cooperatives enjoyed the monopolistic

advantage of trade which made it compulsory for producers and traders (especially farmers and

produce marketers) to join. However, the emerging market liberalization of the time brought an

end to the monopoly status already enjoyed by the cooperatives (Wanyama, Develtere & Pollet,

2008).

Currently, cooperatives in the Nigerian rural settings are of greater interests to women. Rural

cooperatives in the country could be categorized into two: agricultural and non-agricultural

cooperatives. The agricultural cooperatives exist in various forms such as farmers’ multi-purpose

cooperatives, producers’ cooperatives, marketing and processing cooperatives, agricultural credit

and rural banking cooperatives. The existing forms in the non-agricultural groups include thrift

and credit cooperatives, investment and credit cooperatives, consumers’ cooperatives, artisans

and handicraft cooperatives (Nnadozie et al., 2015).

Establishment of Cooperative Societies in Nigeria

In Nigeria, before the modern cooperatives were put in place, there existed cooperative societies

that were indigenous to the local people. These includes the labour clubs, the contribution clubs,
and the indigenous and traditional farmers’ societies which functioned at nearly all villages and

community levels (Obasse, 2012; Crowder, 1973). The modern cooperative movement in Nigeria

started when C. F. Strickland was appointed in 1933 to look into the possibility of introducing

cooperative societies into the country. Strickland’s report came out in 1934, and reported that

cooperatives be established in Nigeria for the following reasons: to eliminate exploitation by

middle men; for producers to deal directly with the entrepreneurs, producers and buyers; for

members to benefit from the extension of the Department of Agriculture; other requisite know-

how to produce high quality cotton, cocoa, and palm produce to get higher prices; to provide

production credit to members; and to do away with high interest loans. To promote cooperative

spirit in a social system that already provides the fundamental rudiments of cooperatives

(Oshuntogun, 1981; Ijere, 1975). Sequel to Strickland’s report, the first Cooperative Ordinance

in Nigeria was passed in 1935. Later in 1936, Faulker was appointed the Registrar of

Cooperatives and the control of cooperatives gradually shifted from the Agricultural Department,

and it empowered the registrar of cooperatives to register, inspect, audit, hold inquiries and settle

disputes and liquidate unsuccessfully registered cooperatives. The ordinance was in operation

until the three regional governments of the east, north and the west) started adopting their own

cooperative society laws. Before this time, there was a Cooperative Federation Limited, having

its headquarters at Ibadan. However, as from 1952, onwards, each of the regions had her own

cooperative department under different registrars; and Ibadan ceased to be the head-office of

Nigerian cooperative societies. In 1963, the cooperative societies in the Federal Territory of

Lagos and the Mid-Western states respectively broke away and became autonomous in the

creation of more states in 1967 and 1970 respectively (Oshuntogun, 1981; Ijere, 1975).In 1974,

the Federal Military Government promulgated decree no. 5 for the establishment of a
Cooperative Development Division in the Federal Ministry of Labour for the appointment of

supporting staff (Oshuntogun, 1981; Ijere, 1975). It can at this juncture, be argued that

cooperative societies occupy a significant place in the cooperative movement. Their importance

is seen in their ability to meet the much needed cheap institutional credit needs of members,

especially farmers and small scale business men who hardly had access to bank loans. This

cooperation does not demand for the type of collaterals which other lending institutions usually

and normally require before granting loans. Thus, credit cooperatives enable their poor members

to finance and float projects with ease (Umana and Ikpeazu, 1980).

Forms of Cooperative Societies in Nigeria

There are a proliferation of cooperative societies operating in nearly all the sectors of the

Nigerian economy. Put briefly, this would include the Consumers Cooperative Societies which

are organized by consumers who pool their resources together in order to advance their interest

in retail purchases. They own shops, buy consumer goods in bulk from manufacturers at factory

prices and retail them to members at controlled prices. Any profit made is returned to members

as patronage rebates. There are also theProducers’ Cooperative Societies, here, Producers, or

Farmers’ Cooperative Societies are organized by farmers or producers who pool their resources

in order to engage in large-scale production and market their products themselves. We also have

the Credit and Thrift Cooperatives. These according to Omeje (2003) are usually organized by

members like traders, artisan and peasant farmers who contribute money into a common fund in

order to raise investment, finance and distribute same as soft loans to members. So, the main aim

of this type of cooperative society is to encourage savings among members and also offer credit

facilities to members to enable them engage in economic activities. The society usually exist

with a specific name such as Nigeria Union of Teachers, Road Transport Workers’ Union, Credit
and Thrift Cooperative Society (Omeje, 2003; Adesina, 1998). There are also in existence the

MultiPurpose Cooperative Societies. These are organized by people who pool their resources

together in order to combine different activities such as marketing of consumer goods, credit and

loans and so on. The society usually exist with a specific name such as Consumers’ Multipurpose

Cooperative or Producers Farmers. The term “Multi-Purpose” allows the society to undertake

any type of cooperative activity that is profitable in the interest of the society and its members.

There are the Industrial Cooperative Societies. These industrial or production cooperative

societies are organized by individuals who engage in specialized, skilled activities such as

carpenters, painters, masons, tailors and panel beaters, plumbers, etc. Members of the same skills

come together to mobilize funds needed for their business investment and expansion (Umeje,

2003; Baker, 1991). It should also be noted that these cooperative societies functions from our

rural communities to the local government levels, to the urban centres, having immense impact

within government circles and establishments, and vibrating in nearly all of our institutions of

higher learning, the industrial and financial sectors inclusive, and on all sectors of the Nigerian

economy. Martin (1971) opines that the aims, goals and objectives of these organizations are all

the same, namely, to serve the interest of the common man.

Types of Co-operative Societies

Although all types of co-operative 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.

i. Productive 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 equipment, machinery etc. According to Olesin (2007:7) opined
 that producer’s co-operative society is the association of producers of similar product

who have come together in order to promote the production and sale of their products.

Members of this society like farmer and other producers contribute money in order to

buy or hire equipment, machinery and raw materials at reduced rates meant for the

promotion of their product activities.

ii. Services cooperative society: These societies are formed to protect the interest of

general members by making goods available at a reasonable price. They buy goods

directly from the producers or manufactures and thereby criminate the middlemen in

the process of distribution. Examples of service cooperative societies are the

consumer cooperative society and cooperative marketing society. Consumer

cooperative society is an organization which intends to support the economy of

member household through acquisition of merchandise from wholesalers for sale to

members at a fair price, (Igwe, 2006). The cooperative marketing societies are

societies formed by small producers and manufactures who find it difficult to sell

their product individually. The society collects the product from the individual

members and takes the responsibility of selling those products in the market.

iii. Multipurpose cooperative society: These are societies which are engage in various

activities and business such as farming, housing, issuing of loans and production of

goods. Members, who belong to this society, derived a lot of benefits. Some of the

benefits according to Igwe (2006) are benefit of large scale farming, loans are given

at a reasonable rate of interest in times of need to buy land and construct houses, and

the issue of collateral security is reduced.

Benefits of Co-operative Societies

The benefits of co-operative societies according to Johnson Ugogiare:

 Encouragement of Savings: the credit and thrift co-operative society encourages its

members to save their money.

 They are Democratic in Nature: all members have equal rights to say how the society

should be organized. Every member has the rights to vote and be voted for, and each

member has one voting right.

 Results in Low Prices of Goods: this is because, they buy goods directly from the

producers and distributed to their members.

 They Prevent Price Fluctuation: this is as a result of the fact that their main motive is not

to make profit but to promote the welfare of h their members.

 Prevention of Hoarding: this is as a result of the fact that they buy directly from the

manufacturers and distributed to their members.

 They Fight Inflation and Deflation: they do these through their activities of price

stabilization, regulation of the quantity of goods needed, etc.

 Saving In Advertisement Cost: the money they would spend in advertising is saved

because they do not involve in advertising since majority of the goods they purchase from

manufacturers are bought by their members.

 Education of Their Members: this is done in areas of production, distribution, buying and

selling of goods and services. Encouragement of Hard Work: this is as a result of the fact

that they have joint pride of ownership.

 They Avoid Cheating: at the end of a given period members are paid dividends calculated

on the basis of the capital contributed and total purchases made from the society.
  They Encourage Inter-personal Relationship: there exists brotherly, sisterly, friendly etc,

relationship among members of co-operative society.

 They Encourage Economic Development: this is because; their activities encourage mass

production, distribution and consumption. They also encourage savings for further

investment.

 Increase in Standard of Living: this is as a result of the fact that they make goods

available to members at reduced rates, encourage them to save, give the needy ones loans

with little or no interest etc.

The Need for Re-Engineering Co-operative 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) opines that

reengineering is done by assessment of the current operational environment to determine the

most appropriate strategies for the future. At the inceptions of modern co-operatives, government

intended to foster and nurture cooperatives to grow and become self-reliant, as government

gradually withdraws.

However, seven decades of modern co-operation in Nigeria, government still reminds the 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 intellectually in this regards could not help

the matter, which is mostly the legal framework. The roles of government and co-operative

societies prior of the Natural Cooperative Development Policy of 2002 were not clearly defined

and this had been the bane of cooperative development in Nigeria. Akinwumi (2006) therefore
suggested the need for total re-engineering of cooperative movement. This definition of roles of

co-operatives 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.

2.2 Theoretical Framework

Theory of cooperatives

Helmberger and Hoos (1962) can be regarded as having developed the first complete

mathematical model of behaviour of an agricultural cooperative. Sexton (1995: 92), who

provides a brief overview of developments in the economic theory of cooperatives in the US

prior to Helmberger and Hoos’ paper (see also LeVay, 1983; Sexton, 1984), considers their

paper as “a landmark in the economic theory of cooperatives.” Helmberger and Hoos (1962) use

the neo-classical theory of the firm to develop short-run and longrun models of a cooperative

(including behavioural relations and positions of equilibrium for a cooperative and its members

under different sets of assumptions) using traditional marginal analysis. In their model, the

cooperative’s optimization objective is to maximize benefits to members by maximizing “the per

unit value or average price by distributing all earnings back to members in proportion to their

patronage volume or use” (Torgerson et al., 1998: 5). Sexton (1995) regards this “landmark”

paper so highly because

(1) The (correct) analysis of cooperative and member behaviour is based on a clear set of

assumptions;

(2) The model clearly distinguishes between shortand long-run behaviour in a cooperative;

and
 (3) Based on these characteristics, the model set the stage for further advances in cooperative

theory in the 1970s and 1980s.

Torgerson et al. (1998) contend that Emelianoff (1942) made a major contribution to

understanding the internal economics of cooperatives with his conception of the cooperative as a

form of vertical integration, and his focus on the structural and functional relationships of

members (the principals) to their cooperative marketing organization (the agent). His model was

later refined by Robotka (1947), Phillips (1953) and Aresvik (1955).

There have been various debates on whether a cooperative enterprise should be treated as a firm

(a decision-making entity), as Helmberger and Hoos (1962) did, or as an organization

(aggregation) of economic units (members), as treated by Emelianoff (1942), Robotka (1947),

and Phillips (1953), for example. Rhodes (1995) presents an overview of the debate on the

Helmberger-Hoos and Phillips models, with the former initially having the greatest support

among economists, although their contribution has also been criticized (e.g., LeVay, 1983;

Lopez and Spreen, 1985; Sexton, 1986). Sexton (1995: 94) views this debate as “primarily one of

semantics,” and considers the issue not important to understanding cooperatives. He sees the

development of alternative models as application of advances in economic theory of cooperatives

reflecting “the richness of the environments in which cooperatives operate and the need to have

alternative models that apply in different settings” (p. 97). Staatz (1994), Royer (1994) and

Torgerson et al. (1998) also contribute to this debate. Over the past few decades, the rapidly

changing economic environment, reflected in increasing globalization and agricultural

industrialization, has led many agricultural cooperatives to undertake substantial structural

changes in order to adapt to the new situation. Royer (1999), for example, mentions that in

addition to mergers, consolidations and acquisitions (horizontal and vertical restructuring),

cooperatives have become increasingly involved in fundamental institutional changes (e.g.,

conversion to IOFs, and joint ventures with corporations). These developments raise the question

whether there are “fundamental features intrinsic to the cooperative organizational form that

restrict cooperatives from being able to compete effectively in an increasingly complex economy

and that ultimately threaten their long-term survival” (Royer, 1999: 44). In line with the rapid

developments taking place, economists have developed three distinct but related methods to

analyze organizational forms and their relationships within the market system, namely

transaction cost economics (TCE), agency theory, and property rights analysis. Royer (1999: 44-

45) suggests that these collectively can be referred to as NIE, “because they focus on institutions

and institutional constraints rather than the profit-maximizing behavior of abstract firms in the

neoclassical economic paradigm.” However, Sykuta and Chaddad (1999) consider the three

components (methods) as merely comprising a subset of a much larger (evolving) literature,

although they do contribute to a more complete understanding of integration, contracting, and

organization.1 Nevertheless, this paper will focus on the three mentioned components of NIE.

Before these are discussed, criticisms of the neoclassical theory of the firm will be presented.

According to the neoclassical theory of the firm, each firm maximizes its profits subject to its

cost structure and product demand constraints. Transaction costs (i.e., costs of obtaining

information about alternatives and costs of negotiating, monitoring, and enforcing contracts) are

assumed to be zero, as are adjustment costs, and resources are privately held and fully allocated

among alternative uses purely in response to financial incentives. How a firm would behave

under different circumstances can be hypothesized by analyzing how changes in the firm’s

constraints affect its profits. Criticism of the neoclassical model of the firm was based on the

assumption of profit maximization but, more fundamentally, that the model does not explain why
these firms exist in the first place, and how the resources within these organizations are

employed, allocated, and motivated to achieve maximum profits (Royer, 1999; Sykuta and

Chaddad, 1999). Sykuta and Chaddad (1999: 69) contend that criticism of neoclassical

economics also extends to the study of markets because it is “ill suited to answering questions

about when, why, and how markets evolve; about the institutional infrastructure required to

support market activity; and about the structures of the organizations involved in market

activity.” The criticisms of the neoclassical paradigm led to the development of alternative

models of the firm based on other assumptions (e.g., maximizing rate of growth, sales, and firm

size subject to a profit constraint), focusing on the process of decision-making within the firm

(i.e., rejecting maximizing behaviour), and eliminating some of the unrealistic conditions of the

model (e.g., by considering utility maximization, positive transaction and information costs, and

alternative property rights structures) (Royer (1999). The role of positive transaction costs and

variable property rights has given economists new insights into the existence of firms (including

cooperatives), the evolution of alternative forms of business organization, and the choice of

organizational form (aimed at minimizing both production and exchange costs). The next

section, which draws heavily on Royer (1999), Sykuta and Chaddad (1999), and Iliopoulos and

Cook (1999), provides a summary of the main components of the new institutional economics,

namely, transaction cost economics, agency theory, and property rights theory.

Agency theory

Agency relationships exist whenever an individual or organization (the agent) acts of behalf of

another (the principal). Principal-agent problems arise because the objectives of the agent are

usually not the same as those of the principal, and thus the agent may not always best represent

the interests of the principal (Alchian and Demsetz, 1972; Royer, 1999; Sykuta and Chaddad,
1999). The terms of an agency relationship are typically defined in a contract between the agent

and the principal (which could bind the agent to act in the principal’s interests, for example).

Because contracts are generally incomplete, “there are opportunities for shirking due to moral

hazard and imperfect observability” (Royer, 1999: 50). Hence, the main focus of agency theory

is on incentive and measurement problems, but the risk-sharing implications of incentive

contracts are also crucial. As Sykuta and Chaddad (1999: 72) point out, “most applications of

agency theory focus on the incentive vs. risksharing trade-off of contracts aimed at aligning the

interests of the agent with those of the principal.” Agency theory is thus very relevant to the

institutional structure of cooperatives because employed agents (managers) may not act in the

best interests of cooperative owner-members (principal). The challenge, therefore, is which

ownership and capital structures can be developed to lower agency costs (see Fama, 1980; and

Fama and Jensen, 1983, for a more detailed exposition). Principal-agent problems in a

cooperative are likely to give rise to member dissatisfaction. Richards et al. (1998: 32) point to

various studies which argue that cooperatives experience greater principal-agent problems than

proprietary firms due to “the lack of capital market discipline, a clear profit motive, and the

transitive nature of ownership.” Because cooperatives have no market for their equity (as

opposed to IOFs), there is less incentive for members to monitor the actions of their managers.

Cooperatives may also have greater difficulty of designing incentive schemes for managers that

will align their personal objectives with those of the cooperative. Using data from a survey of

cooperative members in Alberta, Canada, Richards et al. (1998) compared members’ objectives

(expectations) with those they perceived were held by their managers. Younger farmers and large

producers, for example, felt that managers focused too much on the social role of cooperatives
and not enough on profit issues such as higher prices, return on equity and quality of service.

These two groups seemed to be least satisfied with their cooperatives’ (managers’) performance.

Property rights theory

Demsetz (1967) defines property rights as the capacity to use or to control the use of an asset or

resource. He maintains that for any form of human cooperation to be workable, especially a form

involving agreement, requires clearly defined and enforced property rights. The neoclassical

model specifies that property is privately held and property rights are exclusive and transferable

on a voluntary basis. Since transaction costs are assumed to be zero, these property rights can be

fully defined, allocated, and enforced, and will be allocated to those uses where they yield the

highest return (Royer, 1999).

Property rights theory, also referred to as the incomplete contracting theory of the firm, was

developed by Grossman and Hart (1986), Hart and Moore (1990) and Hart (1995). It is based on

the assumption that contracts are necessarily incomplete (e.g., due to asymmetric information

between trading parties and bounded rationality), and thus do not “fully specify the division of

value in an exchange relationship for every contingency” (Sykuta and Chaddad, 1999: 72).

Hence, ownership (the right of residual control) of the assets involved in a transaction becomes

critical in deciding how value is divided when a (noncovered) contingency arises. Since

transaction costs are positive, “the allocation (and possible non-transferability) of property rights

may have significant consequences for economic organization, behavior, and performance”

(Sykuta and Chaddad, 1999: 73). Iliopoulos and Cook (1999) also refer to the distinction

between the “traditional” property rights approach, in which ownership is synonymous with the

possession of residual claims, and the property rights - incomplete contracts theory discussed

above. Cook (1995) contends that property rights are vital for cooperatives to be sustainable,
producer-controlled organizations. Before a cooperative can achieve improved market

performance (“correcting market failures”), internal stability in a cooperative needs to be

achieved with clearly defined property rights.

2.3 Empirical Review

Social Economic Characteristics of Agricultural Cooperatives Members and various types

of existing cooperative societies in the study area

Rowland A. Effiom (2014) carried out a study on Impact of Cooperative Societies in National

Development and the Nigerian Economy. The aim of his research was to examine the social and

economic impact of cooperative societies in Nigeria and to investigate into their origin, history,

formation and development. Also to be examined is their impact in our rural communities,

especially in the grass root, urban and national development. It has been argued that commercial

financial institutions such as banks and insurance companies could play greater roles in the

advancement of rural development than the cooperative societies. This is so because of the

enormous contribution of these financial houses to the rapid, social and economic development

of the people, and urbanization. The paper further reviews the various obstacles and challenges

confronting the effective performance of cooperative societies in Nigeria, and proffer ways of

forestalling these problems. The research is of the view that as many as these societies may be in

form, formation and groups, with their various tags, aims and objectives, government should aid

and encourage these organizations to enable them stand and perform effectively since they are all

contributive factors in the economic development and growth of Nigeria. Although cooperative

societies in this country have witnessed tremendous successes, they have some retrogressive

issues that tend to often stall the good will, progress and prosperity of these societies. Some of

the issues listed in this paper include poor management and lack of trained staffs, insufficient
financial resources on the part of members, dishonesty, corruption, gang up by the capitalists to

frustrate cooperative advancement and growth in order to protect their own business (Kidd,

1968), and the absence of felt need among members essential to the survival spirit of the

cooperatives.

Nnadozie, A.K.O (2015) further carried out Nigerian Agricultural Cooperatives and Rural

Development in Ezeagu L.G.A., Enugu State, Nigeria. The study showed that multipurpose,

production, marketing, thrift and savings agricultural cooperatives societies exist in Ezeagu

Local Government, Enugu State, Nigeria. These cooperative source their finance from monthly

dues, levies and fines and others. The cooperatives have greatly contributed to agricultural

development in Ezeagu Local Government Area by provision of cash to small-holder farmers,

processing, marketing and group management. However, there exist certain problems

confronting the agricultural cooperatives from their expected roles and they include inadequate

staff or personnel, low income and poor government interventions. Based on the findings, the

researchers concluded that the agricultural cooperative societies in Ezeagu Local Government

Area, Enugu State, Nigeria have contributed to rural and agricultural development despite the

identified constraints. The researchers recommended that both the three tiers of governments and

non- governmental organizations should assist the cooperative societies to get funds and training

of personnel to manage their cooperatives and contribute to rural and agricultural development in

Ezeagu LGA specifically and Nigeria in general.

Cooperative Contributions to Members and Possible Solution to the Improvement of

Members Welfare

Olusola Bolarinwa (2021) examines various means of funding cooperative societies owned by

teachers to promote members economic strength. This is a self-financing body with no grant or
support from the government or agencies. This paper sought to identify various means used in

generating funds by cooperative societies and how this has helped in promoting members'

economic strength. One hundred and forty-five (145) members of eight (8) societies participated

in the study. The instruments used in collecting data were; Fund Creation Checklist (FCC) and

Members Economic Strength Questionnaire (MESQ). Data were analysed using Descriptive

Statistics and Pearson Product Moment Correlation (PPMC). Result revealed an insignificant

negative relationship between fund creation and members economic strength promotion with (r=

-0.085, > .05). Thus, it shows that it is not certain that the fund generated by the cooperative

society solely accounted for the promotion of members’ economic strength. It was concluded

that cooperative societies and members should engage in viable businesses that will yield high

profits, and proper fund management should be of priority for society and members.

Nwankwo, Frank (2013) assessed the effect of cooperative on the savings behavior of members.

The study was carried out in Oyi LGA with data from 195 randomly selected members of credit

cooperatives. Analysis of data was with descriptive statistical tools such as mean, tables, and

frequency counts. Also a multiple regression model was utilized to assess determinants of

savings behaviour. Results from the study show that cooperative membership impacted

positively on the savings behavior of members. Findings show that older members had more

savings than newer members. Although the marginal propensity to save (MPS) was a 9.3%, it

was significant since it showed that rural dwellers were capable of saving in cash. Moreover

most of these savings were made through the savings mechanism of cooperatives. Length of

membership in cooperative was also found to be an important determinant of savings thus

confirming that the older one is in the cooperative, the more he is likely to save. In line with the

findings of the study, it is recommended among others for membership drive to attract more rural
dwellers into the membership of cooperatives; and the need for credit cooperatives to convert to

multipurpose cooperatives to enable them to be more involved in the economic activities of the

members, like supply of farm inputs and agricultural marketing.

Okoli Eucharia (2018) carried a study on Assessment of the Contribution of Cooperative

Societies in the Development of the Members: A Case Study of Selected Cooperative Societies

in Dunukofia Local Government Area, Anambra State, Nigeria. This study is centered on the

assessment of the contribution of cooperative societies in the development of their members in

Dunukofia Local Government Area of Anambra State Nigeria. It is believed that cooperative

societies are veritable tool for membership development. The study specifically ascertain and

describe the corporate profile of cooperative societies; identifying the activities the cooperative

societies are engaged in and its bearing on membership development; compare the exposure of

its members to development activities before and after joining the cooperative societies; find out

the perception of the youth and the influence of their cooperative on their development; ascertain

the challenges the cooperative societies and their members face in advancing their goals.

Respondents were drawn from members of six selected (6) cooperative societies. Primary data

were sourced through questionnaires administered on 159 members, while secondary data were

gotten from literary works and documents. Data was analyzed descriptively using means;

percentage, 5-point likert scale, chi-square, z-test techniques and two hypotheses were tested.

The study found that there is a positive relationship between the effect of the activities of the

cooperative societies and membership development. There is also a significant change in the

exposure of youth to development activities before and after their membership of cooperative

society. Several constraints were identified to be affecting the cooperative societies in effectively

meeting and enhancing youth development, prominent among them are weak financial strength
of the society, Poor management of the society, lack of basic infrastructures, Fraud and financial

malpractice. The society is also found to be providing limited loans and savings.

Recommendations were made on how cooperatives can effectively contribute to youth

development. These includes(partial listing):Members should show participation and being more

active for a stronger and stable society, There should be judicious use of funds to strengthen the

financial level of the society, There should be diversification of the cooperative business to

enhance it reserve, Management should be more serious in dealing with the affairs of the society.

Government should provide enabling environment for cooperative societies to strive through

policies and programmes.

2.4 Summary of Literature Review

The literature related to this study is reviewed under conceptual framework, theoretical

framework and empirical review. The conceptual framework focused on Concept of Cooperative

societies, Types of cooperatives Societies, and the theoretical framework covered Theory of

cooperative, agency theory and property right theory.

The empirical review revealed that different study has been conducted by different researchers

related to the scope of the present study but none of the studies carried out or focused on Impact

of Cooperative societies on Members. (A study of selected cooperative societies in Ivo local

government, Ebonyi State). Therefore, the present study sought to fill this existing gap.

CHAPTER THREE

Research Methodology
The chapter deals with the method use to extract the data for the study. It present an overview of

the various methods used in gathering data and the instrument use in interpreting and analyzing

such data. It involve the description of the sample, the research instruments, the population and

method of treatment of data.

3.1 Research Design

The basic research method employed in this study is a survey method. The choice of this design

was chosen due to the fact that it is flexible and best suited for gathering descriptive information.

It underlying principles is to seek the opinion of individuals on a particular problem, whereby the

consensus of these opinions provides the needed solution to the problem at hand Nwogu, (2006).

3.2 Sources of Data

The entire data used for this research were collected or obtained from both primary and

secondary sources. Nonetheless the criteria for data collection depended strictly on its relevance

to the study. The major instruments used for primary data collection are viz:

Primary data are data observed or collected directly from first-hand experience. The primary data

for this study was sourced through questionnaire.

The secondary data were gotten during the review of related literature. Most of text books,

magazines and journals used for this were gotten from libraries visited. The libraries visited by

the researcher include the national and state libraries. The researcher’s personal library was not

left out. The internet served also as a source of secondary data. Many articles which provided

more insight on the research topic were sourced online.

3.3. Area of the Study

The area of study is Ivo Local Government Area of Ebonyi State is the study area. It has a

population of 129,068 people based on the 2006 census (NPC.2006). The local government Area

is composed of the following communities: Ishiagu, Isiaka, Ndiokoro ukwu, Nzerern and

Obinagu. The people are mostly farmers and some few engage in stone crushing to supplement

their farm income. Ivo is known for its inhabitants engage in various farmers ‘groups and

associations. Agriculturally, Ivo Local Government Area is known beyond Ebonyi State

frontiers. The study population comprised of the 80 registered agricultural cooperative societies

at the local Government trade and commerce office and the Ebonyi State Agriculture

Development programme office at Ivo Local Government Area.

3.3 Population of the Study

This study aimed at assessing the Impact of cooperative societies its members within Ivo Local

Government Area in Ebonyi state. The population of registered cooperative societies in Ivo

Local Government Area of Anambra state is 80. However at the time of the study, only 60 were

active and viable as stated by the Divisional cooperative officer (D.C.O). The membership of the

60 active cooperative societies is 2880. These constitute the population of the study.

3.4 Determination of Sample size and Sampling Techniques

The researcher made use of multiple approaches. The study centered on Ivo Local Government

Area. The communities which make up the Local Government Area are; Ishiagu, Isiaka,

Ndiokoro ukwu, Nzerern and Obinagu. The researcher also made use of judgmental sampling to

select the cooperative societies from three (3) communities which cut across centers of North,

East, South and West in the locality of Ivo Local Government. Therefore the only sample for the

study will be some selected cooperative societies from randomly chosen selected communities in
the locality of Ivo Local Government Area. Out of sixty (60) active cooperative societies in Ivo

Local Government Area, six (6) cooperative societies are selected from three (3) communities;

Obinagu, Ishiagu, Isiaka. A random sampling approach was adopted to select the respondent.

The respondent include; employees, executives, officials and members of the cooperative

society.

S/N Types of Cooperative Societies Town Number of

Located Members
1 Nneamaka Obinagu Muti-purpose Obinagu 45

Cooperative Society (MCS)

2 Kosiso Chukwu Isiaka Multipurpose Isiaka 48

Cooperative Society (MCS)

3 Ishiagu Famers Cooperative Association Ishiagu 60

(FCA)

4 Ngene Obinagu Multipurpose Cooperative Obinagu 55

Society

5 Eziamaka Ishiaka women multipurpose Ishiaka 30

cooperative society

6 Productive hands Ishiagu F.M.C.S L.T.D Ishiagu 25

Total 263

In determining the sample size, from the total population, it will be difficult to access the entire
population due to time and inadequate assess to good number of data. Therefore the Taro
Yamane Techniques was adopted for this research work in order to determine the sample size.
Thus; n = N/1+N(e)2
Where; N - Population of the Study
n - Sample Size
(e) - acceptable error limit (5%)
I - mathematical constant
Note (e) = 0.05
263/1+263 (0.05)2
263/1 + 263 (0.0025)
263/1+0.6575
=263/1.6575 = 158.6
Approximately = sample size is 159
Bowler’s Formula shown below was used to obtain the sample size from each cooperative

society by appropriating the members to the cooperative society.

Thus; nh = nNh/N

Where nh = Number of membership of each Cooperative Societies

n = Sample size

Nh = Number of the item in each Cooperative Societies

N = Population size

Nneamaka Obinagu Multipurpose Cooperative Society = 159x45/263 = 28

Kosiso Chukwu isiaka Multipurpose Cooperative Society = 159x48/263 = 29

Ishiagu Farmers’ Cooperative Association (FCA) = 159x60/263 = 36

Ngene Obinagu Multipurpose Cooperative Society = 159x55/263 = 33

Eziamaka Ishiaka Women Multipurpose Cooperative Society 159x30/263 = 18

Productive Hands Ishiagu F.M.C.S Limited 159x25/263 = 15

3.6. Description of Instrument used for Data Collection

The researcher used many ways to carry out his investigation which include interview and

questionnaire distribution. The questionnaire consists of structured/close –ended questions and

unstructured/open-ended question. The section (A) of the questionnaire captures the corporate

profile of the cooperative and it members, while the section (B) comprises questions on

Cooperative Society activities geared towards Members (Ivo LGA, Ebonyi State).

3.7. Administration and Collection of Instrument of Data

In carrying out this research, a total of 159 item structured and unstructured questionnaire

containing five likert scale response was designed and distributed to the targeted respondent. The

administration of the questionnaire was done by hand on the visit to the cooperative societies or

other complement officials in Ivo Local Government Area,

3.8. Method of data analysis:

For easy understanding of the study, descriptive statistics involving mean, simple percentage

were employed in the analysis of specific objective number 1-5. Also chi-square (x²) will be used

to test the null hypothesis one ( Ho1 ) while Z-test will be applied to test the null hypothesis two

(Ho2 ) The formula for the x² is as follows:

X²= £ (fo- fe) ² fo

Where fo = Observe frequency

fe = Expected frequency

£ = summation of all items Formula for expected frequency (fe) RT×CT/GT

Where

RT= Row total of responses

CT= Column total of responses

GT= Total of responses

To calculate the degree of freedom (DF)

The number of degrees of freedom for this type of test is obtained as follows: (r-1) (c-1) where

r= number of rows c = number of column Level of significance used is 5% i.e. 0.05, this is given

level of significance under which the calculated x² is studied.

Decision Rule

If the calculated value of x² is greater than the critical or table value of x², reject the null

hypothesis one (Ho1) Z-test will be applied to test the null hypothesis two ((Ho2 ) . The reason

for the application of Ztest is because the sample size is greater than 30 (i.e n>30)

The formula for Z-test is Z=x 1 - x 2 SDx

Where SDx= standard error of difference between means.

SDx = √S1 2 + S2 2

n1, n2 and S2 = Variance of group

Therefore Z = x1- x2 √s1 2 + s2 2/n2 n2

Decision rule:

Reject Ho2 if the calculated Z is less than - 1.96 or greater than 1.96. Do not reject Ho2if

otherwise (i.e. do not reject Ho2if Z calculated lies between - 1.96 and 1.96).