THE SOURCES AND USES OF FUNDS IN COOPERATIVE BUSINESS ENTERPRISES, A CASE STUDY OF ACCI MULTIPURPOSE COOPERATION SOCIETY LTD ABUJA
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- 1-5 Chapters
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- Abstract : Available
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- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
BACKGROUND OF THE STUDY
The growth of cooperative societies as a potent instrument for developing economic empowerment, especially among women and other vulnerable and excluded groups, has garnered a growing amount of recognition in recent years. They have continued to be crucial to the economies of a wide variety of nations across the world. For instance, in the Republic of Kenya, cooperatives are responsible for 45 percent of the country's overall gross domestic product as well as 31 percent of the country's national savings and deposits. They have a 70% share of the market in coffee, a 76% share of the dairy market, a 90% share of the pyrethrum market, and a 95% share of the cotton market. A little under a quarter of a million individuals in our nation have jobs thanks to cooperatives, either directly or indirectly. In South Korea, agricultural cooperatives have roughly two million farmer members, which accounts for nearly nine tenths of all farmers in the nation, and their yearly output is approximately 11 billion US Dollars (Todaro, & Smith, 2019). Roughly one billion people take part in some aspect of the operation of cooperatives, either as members/customers, employees/participants, or both. At least 100 million people are employed on a global scale through cooperatives. It is anticipated that nearly half of the world's population will make their livelihood within the context of cooperative societies. The gross domestic product of Spain, which is the ninth biggest nation in the world, is comparable to the total revenues of the world's 300 largest cooperative societies, which total 1.6 trillion US dollars (Todaro, & Smith, 2019).
The voluntarily coming together of individuals who have common interests for the purpose of satisfying the members' reciprocal economic or social need is the definition of a cooperative society. When members combine their efforts, they get benefits from one another's thoughts, capabilities, skills, and energy. They are able to accomplish things that, on their own, they could not do as well (or at all) in areas like as production, marketing, distribution, thrift, education, and so on. This allows them to do things that they could not do at all. A cooperative society is an autonomous organization of individuals who have joined together voluntarily to pursue their common economic, social, and cultural objectives and goals via a jointly owned and democratically run corporation, as defined by the International Cooperative Alliance (Skipper, 2017).
Previous research has focused mostly on assessing the value of cooperativism in different geographical areas. Because cooperatives have an impact on the creation of jobs in underserved areas, on meeting new social demands that are a reaction to groups that are at risk of social exclusion, and, in a nutshell, on the promotion of social capital, they are regarded as being crucial for the development and expansion of territories. In a similar fashion, the cooperative-related organizations and groups will consistently include references to this aspect in the reports that they provide. Following the publication of the most recent report by the Federal Government of Nigeria, cooperatives have been highlighted as essential local private sector actors under the following concepts: "Cooperative companies are a wonderful match with the EU2020 agenda, which aspires for a sustainable economy that prioritizes people and responsibility while fighting exclusion and transitioning to a green economy; consequently, there is a need for funds for cooperative firms" (Otto, & Ukpere, 2015). In Nigeria, financial sustainability and integrated community development among funds have been fostered in part by the government as well as by non-government organizations. The process of this research was to investigate the degree to which the sources and uses of finances in cooperative business companies have resulted in an increase in the participants' level of economic, social, and political empowerment. According to the findings of the research, which estimated the impacts of money on the reduction of poverty, finances are widely seen as being at the bottom of the poverty scale in Nigeria. This enables us to have a better understanding of the implications of financing cooperative capital in economic activities and firms. The precarious financial position of the majority of Nigerians provides the theoretical society for analysis of financial resources. There is a good chance that the method of financing is geared specifically for the needs of females. This approach from the Nigerian perspective was realized, tested, and selected in three microfinance organizations: the Country Women Association of Nigeria (COWAN), the Peoples Bank of Nigeria, and Family Economic Assistance Programmes. COWAN is a non-profit organization, and the Peoples Bank of Nigeria and Family Economic Assistance Programmes are government-assisted microfinance organizations. The latter two are both federally operated institutions that are a part of the government of Nigeria. Their primary mission is to extend credit to individuals who, under normal circumstances, would be unable to do so. As a result, these individuals are able to improve their economic standing and contribute to the reduction of poverty. The following are the propositions about funds:
There is a one-to-one correspondence between the accessibility of microcredit and the rate of economic development.
1.The provision of women in Nigeria with access to microcredit is directly linked to their increased economic independence.
2.The availability of microcredit makes it easier for individuals to engage in activities that generate money, which in turn leads to an improvement in the people's quality of life.
3.There is a correlation between the establishment of microfinancial institutions in Nigeria and the development of financially sustainable practices among Nigerian women.
4.That the development of women's political leadership in Nigeria is closely connected to the existence of microfinance institutions.
At a global conference in 1998, "donors and governments reinforced their promises to promoting women, regenerating natural resources, and ensuring sustainable livelihood for everyone," according to a report on the event. It is hypothesized that each of these three objectives may be achieved primarily via the use of microfinance. Microfinance is advantageous for this reason since it offers the tools to earn revenue, which ultimately leads to sustainable development. Funds are what make up and provide the impetus for developing what is known as "wide access" to the financial resources available to the poor in order to satisfy the fundamental necessities for sustainable development.
1.2 STATEMENT OF RESEARCH PROBLEM
It is impossible to place enough emphasis on the need of having sufficient financial resources for any kind of commercial business, whether it public or private. To finance its fixed and working capital, to pay for services, and to make investments that earn income, cooperative societies need cash. These funds may also be used to pay for other expenses. Even when things were going normally, the lack of available finances was consistently cited as one of the most significant obstacles facing cooperative business enterprises in Nigeria. It is possible for us to conceive, or more accurately, it is common business among us, the condition that exists inside the currently agonizing economic environment in Nigeria. Other academics and policy analysts have isolated the aspects that contribute to the failure of microfinance businesses and highlighted those characteristics. Yaron noted "high risk," "large transaction costs," and "increasing loan losses" as some of the numerous reasons that contributed to the depletion of state resources and the failure to achieve financial self-sustainability as a result. That it has always incorporated social welfare initiatives, which distract focus away from financial sustainability to welfare concerns, is one of the challenges that Nigeria has had to deal with throughout its history. Inability to provide the required collateral, as requested by the lending institutions Unprofessional bookkeeping and accountancy, due to a perceived lack of creditworthiness on the part of potential lenders, Structures with high rates of interest, The difficulties that arise as a result of the idiosyncrasies that are built into the very nature and framework of cooperative principles, laws, and regulations, The members at the grassroots level of the majority of cooperative societies in Nigeria do not have the level of expertise required to investigate the many options that might increase their capacity to borrow, provide credit, and invest capital. The issue that arises from the cooperative's small membership and the widespread lack of wealth among its members, The management of cooperative societies in Nigeria often lacks the ability to think of projects that are bankable.
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