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Full Project – The poor performance of cooperative society in Imo state

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CHAPTER ONE

1.0 INTRODUCTION

Cooperatives are often targets of unexpected coaxing in the hands of people, who perhaps in all fairness may not be aware of its role in the society. Very interesting comments are labeled against cooperatives, such as “cooperatives are useless organization”, or “cooperative are prone to failure”, “cooperatives breed corruption”, “cooperatives are base for political entry”, and what not. No doubt, large numbers of cooperatives have failed and equal numbers of cooperatives are lying dormant. Similarly, others may not have pursued effective strategies for the long benefit of their members. In many cases, members have had unrealistic expectations concerning a cooperative’s ability to exert power or improve their economic conditions by getting favourable prices. Surprising, cooperatives received a shock treatment from members as well as the people at large, despite serving them in their period of distress like wars, floods, draught, etc, through control of prices, timely supply of inputs and extending other services. Over the years we have observed that if people loose money in their dealings with private organizations, they quickly wipe the incident from their minds and go on with their lives. However, if the same people are actually being wronged by the cooperatives, they carry long memories and continue to raise the issue at whatever platform they get the opportunity to do so. In fact, some people pass their bad experience with cooperatives down from generation to generation. They would often coat cooperatives, for their ineffectiveness, inefficiency, and lot note. It has, therefore, become imperative to explain what could be the reasons of such happening and how to check such occurrence in future. The reasons can be divided into two general categories: misconceptions about cooperatives and reasons for poor performance.

Why Cooperatives are Coaxed for Poor Performance

A.F. Laidlaw, in his paper on ‘cooperatives in the year 2000’ has indicated that cooperatives faced crisis like credibility, managerial and of ideology in its stages of growth and change. Each crisis remained for a period before it was partially or fully overcome. But the impression formed by the stakeholders or general public did not change despite lot of cooperatives, overcoming these crisis. Those who could not come out of this crisis continued to show poor performance. The poor performance of one cooperative can give a bad reputation to all cooperatives. We may examine various reasons for poor cooperative performance.

Ideological Difference in Goals

There are inherent goal conflicts in all types of cooperative organizations. It arises from the doubts about the true purpose of cooperatives and whether they are fulfilling a distinct role as a different kind of enterprise. Similarly, often development measures became so stringent that the space required for the working of cooperatives has become inadequate to perform and function. Many states in India changed their legislations to give more autonomy to these institutions but lots of criticism has come from cooperatives for such initiatives. Certain credit institutions have tried mainly to remove dual control of their functioning as it has been affecting their performance. The controls are definitely of use, it brings good results but are of no use if not allowing the institutions to perform effectively.

1.1 BACKGROUND OF THE STUDY

Cooperatives are classified as one of the business organizations but operate in a special way different from all other forms of business enterprises. The distributive nature of cooperative provided that they must be owned, used and controlled by their members. In view of this, cooperatives are organized and managed through the system of large or small, multipurpose or single purpose and central or federal. All these systems put together are under direct coordination and supervision of the cooperative federation.

Yahaya, (2001) notes the cooperative federation is an organization where there are basic units at each level that determine on their own initiative. The relationship between the federation which is a higher organ and the secondary societies which are lower organs is that there is a dividing line where the lower organs reserve to themselves certain functions and delegate others to the higher organs. Though the cooperative federation controls the activities of cooperative to ensure efficiency, it has by the affiliated societies since such affiliated societies do not surrender their autonomy to the cooperative federation.

In Nigeria where the cooperative development is generally a state affairs, cooperatives are organized on three structures based on geographical locations namely village or town level (primary cooperatives), state or regional level (secondary cooperative), national level (tertiary cooperative).

In the light of the above, a number of states especially in the Northern parts of the country, Kaduna inclusive, the cooperatives activities come under one umbrella known as cooperative federation limited.

In some states, particularly the former Western and Eastern regions, cooperative movement operates under a central organization called cooperative union. However, there are numbers of tertiary cooperative organizations which equally perform central functions and represent Nigeria cooperative movements at international and regional level. These includes Cooperative Federation of Nigeria (CFN) which is affiliated to International Cooperative Alliance (ICA), National Association of Cooperative Credit Union of Nigeria (NACCUN) which is affiliated to African Cooperative Credit and Savings Association (ACCSA) and World Council of Credit Unions (WCCU).

1.2 STATEMENT OF THE PROBLEMS

Due to the down turn in the economic situation liabilities to organize, unite cooperative organization or societies, it has not improve their situation hence, the law contributions and has not been useful to themselves and the societies at large and the individual cooperatives members need to be self employed individuals can only meet up with the force to stabilized cooperative societies.

1.3 PURPOSE/OBJECTIVES OF THE STUDY

The main aim of this study is to highlight on the reason for the poor performance of cooperative societies in Aboh Mbaise L.G.A, Imo State and to investigate on the activities of association.

In addition, it is also the aim of the researcher to use this research work in enlightening individual association on the effects and need for the formulation of cooperative societies. These become necessary because a cooperative society helps in stabilizing prices of products.

1.4 RESEARCH QUESTIONS

During the work on the subject matter, I came up with some questions which I fell will help to analyze and upgrade the subject matter. They are:

How have the cooperative societies help to the standard of living of the people in the community?
What are the characteristics of cooperative societies in the society?
Does the existence of cooperative have effect on the society’s welfare?
What

1.5 SCOPE OF THE STUDY

The project work is an assessment of the performance of cooperatives in Kaduna State but two societies (Makera thrift and credit multipurpose cooperative and Zumunchi cooperative society were used as a case study).

This study is therefore restricted to Makera district in Kaduna South Local Government Area of Kaduna State due to the large population involved and the scattered nature of cooperative societies in the state. Due to the above stated reasons, the researcher chooses to limit two selected societies in Makera district in Kaduna South Local Government Area.

And the societies are as follows;

Makera thrift and credit multi-purpose cooperative society.
Zumunchi multi-purpose cooperative society, air force road, makera.

1.6 SIGNIFICANCE OF THE STUDY

This study is very important because it will be of great importance and encouragement to cooperative societies. This study is also important because it will go to a great extent in contributing to the existing knowledge and strategies in reducing poor performance of cooperative societies, hence improving the welfare of the society when the poor performance of cooperative society is being looked into, there will be a positive reverse hence, uplifting the image of the organization.

Finally, this study is very important because it has a bearing on the well being of the cooperative societies and must be given due attention.

1.7 ORGANIZATION OF THE STUDY/SCOPE

During the research work, I involved myself in the activities and profile of the organization, hence trying to provide a meaningful idea to work. I also conducted interviews and recorded as adequate towards my findings.

1.8 DEFINITION OF TERMS

BANKING: Originally the term banking was used to describe an individual or organization engaged in the business of exchanging one currency for another i.e. money changers. The modern business of banking includes keeping deposits and valuables of people and paying on demand, and they carry out these for a prize called interest or bank charges.

COMMERCIAL BANK: Commercial bank in Nigeria is characterized by relatively few banks and this is because of the fact that they adopt the system of branch banking from colonial masters the term branch banking as used here denotes a system where a bank has state or country their business involves:

Giving advances to customers in the form of loans and overdrafts, discount bills of exchange and promissory notes.
Making payment periodically on behalf of its customers.
Safeguarding important documents, certificates etc of their customers.
They act as referee as to the integrity of their customer.

COOPERATIVE SOCIETY

This is an association of persons who voluntarily joined together through a business organization to achieve their common needs while equitably contributing their required capital sharing in the risk and benefits and issues involved in a cooperative society include:

Voluntary member.
Individual or persons join.
Active participation.
Gains as well as losses are fairly share.
Cooperative society is mutual aid organization.
Cooperative principles prevail in the society.

NATIONAL COOPERATIVE ALLIANCE (NCA)

This is an international organization and forms part of UN i.e. United Nations Organization it started in 1985 with headquarters in London it unified all cooperative organizations for all countries cooperatives rules, aim and regulations the word over and its duties are for research, education and teaching it also performs the duty of publishing and collaborates with the UN as well as with other NGOs (Non Governmental Organization).

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