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Full Project – The major contributions and constraints of credit cooperative society in financing the activities of cooperative societies

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CHAPTER ONE

1.0 INTRODUCTION

The major contributions and constraints of credit co-operative society in financing the activities of cooperative societies. This is a study of Federal Polytechnic cooperative thrift and loan Society Limited Nekede Owerri. The study systematically revealed the process of the constraints and impact of credit in co-operative organization in Imo South Local government of Imo State. It highlights the process of credit administration in co-operative, which contract, supervision of credit and credit recovery.

This research will be design in such a manner that will suit the purpose of this project. With this reason a logical procedure will be used to give a balance report and to avoid bias information. The type and nature of this research study will determine the type and source of data to be use however in the accomplishment of this study, both primary and secondary source of data will be used. During the course of this study interview will be conducted, this will help to analyze the data.

The nature of the research topic the characteristics of the population, the time as well the distance which shall be covered shall determine if the population sample is going to be used in this research. This research of this study will be limited to the contributions and constraints of credit co-operative society in financing the activities of cooperative societies.

1.1 BACKGROUND OF STUDY

Nigerian Agricultural Co-operatives and rural development bank limited (NACRDB) is a new bank which came into being following the merger of the defunct Nigerian agricultural and cooperative bank (NACP), people’s bank of Nigerian (PBN) and the risk assets of the family economic advancement by the federal government of Nigeria. Therefore, your deposit is 100% secured.

The management Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB) Ltd has announced a new name for the bank. The institution will now be known as the bank of Agriculture Limited (BOD). This follows the requisite administrative and regulating approvals from supervisory agencies. According to the banks management, this is the first step towards a complete rebranding of the bank. This new corporate identify for the institution will be unveiled soon.

The managing director / ECO of the bank, Dr. Mohammed K. Santauraki says that this is in line with the effort of the new management to reposition the bank into becoming an effective and sustainable finance institution. He recalled that a assumption office on 27^th September, 2010 he laid out his teams repositioning agenda, which he anchored a three direction points (TDPs; a tripod of modernization, institutional capacity enhancement, and refocusing on the bank’s key mandates, enhancement of information technology and upgrade of working environment aid tools as elements of the modernization program.

Refocusing the bank, according to the BOA chief activities, would entail reorganizing the bank and improving its processes to ensure effective delivering of agricultural and rural finance services on a sustainable basis to support the president’s national economic development agenda towards achieving the country’s vision 20:20:20. He further emphasized the need to improve access to finance, and effectiveness of agricultural and rural development of view of the importance of these sectors to national development.

1.2 STATEMENT OF PROBLEM

Co-operative society mobilizes credit to their members through the saving of the members. It has been observed that they are inefficient in mobilizing and utilization of credit. Many problem lead to their inefficient mobilization of credit they are:

Inadequate fund for bank purpose
Inefficient management of loan
Faulty loan policy, which may sometimes emphasize credit worthiness of borrowed, and not the viability of project.
Credit co-operation are mere money activities without proper organization procedure and planned systematic arrangement.
Absence of regular maintaining and supervision of loan.

The above problems need to be solved for the effective performance of co-operative.

1.3 OBJECTIVE OF THE STUDY

The objective of this study is identify the major contributions and constraints of credit co-operative society in financing the activities of cooperative societies and also to find the problems been encountered by this cooperative organization which stand to hinder them effectiveness and efficient performance and finally to make recommendations that will enable the co-operative society overcome the problems and challenges so as to function very well.

1.4 RESEARCH QUESTIONS

For the fact that credit is very important in any business activity, therefore the study is focused on finding relevant solution to the following research questionnaire:

What is the purpose of credit administration in the cooperative society of Federal Polytechnic Nekede?
How effective credit administration to co-operative in Federal Polytechnic Nekede?

What are the major contributions and constraints of credit co-operative society in financing the activities of cooperative societies?

What problem is encountered in the administration of credit in co-operative and what is the solution to this problems?

1.5 SIGNIFICANCE OF THE STUDY

This study will assist the loan committee managers in there decision making as it concern credit policy and management of credit form of proper assessment of loan application proper supervision of credit and evaluation of project proposals. It will help the management to see the need to employ professional staff and lastly this study or findings will be of educational importance to the various universities, polytechnic and student of co-operative development in the various schools.

1.6 SCOPE OF THE STUDY

The research will limit this study major contributions and constraints of credit co-operative society in financing the activities of cooperative societies in Federal Polytechnic Nekede. The researcher intends to find out the available sources of fund to co-operative as well as the financial problem of co-operatives societies.

1.7 LIMITATION OF STUDY

In the course of accomplishing the study, the researchers were faced with the following problems:

Finance: There was no fund to travel from co-operative society to another, there was facility and transport was very high, the will hinder the researcher movement.
Time: The researcher will find it difficult to continue the researching work with the academic assignment dye to time constraint.

Lack of data: The researcher has limited access to official records and statistical records relevant to this study.

1.8 DEFINTION OF TERMS

For clarity purpose elimination of confusion of any kind are proper understanding of the study, the following definition of terms is necessary:

Credit: David W. Pearle defines credit as financing directly or indirectly the expenditure of other against future repayment. Such lending or financing is direct when a bank extends on overdraft facility to customers who use. It is indirect when a trader or producer supplies goods on credit.
Management: Administration or management is the act of attempting to achieve a stated objective by directing human activities in the production of goods and services. Management utilizes the land factory, office, machinery and other facilities at the disposed of the organization in most effective, efficient manner. Bob-Igwe (1993:39)
Organization: Organization is an economic system in which individuals are free simply or collectively to own capital and undertake design to protect the interest of individual Hanson (1974:218).
Effective: Hornby A.S define effective in the oxford advance learner’s dictionary as having an effect able to bring about a result intended powerful in effect and that is efficient performance.

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