ROLES OF FEDERAL GOVERNMENT IN COOPERATIVE

FINANCING (A CASE STUDY OF OYO STATE)

ABSTRACT

The role of the federal government in cooperative financing is

critical for creating economic growth and development,
particularly in regions where access to traditional financial
services is limited. Cooperative societies provide an alternative
means of financial support to individuals and small businesses,
offering opportunities for savings, credit, and investment that
might otherwise be inaccessible. However, in Nigeria, the
effectiveness of these cooperatives is often hindered by
inadequate government support, regulatory challenges, and
limited resources. This study examines the involvement of the
federal government in cooperative financing, focusing on Oyo
State as a case study. The research explores how federal
policies, funding, and regulations impact the performance and
sustainability of cooperatives in the region. Findings reveal that
while the government has made efforts to support cooperatives,
there are significant gaps in implementation and resource
allocation. The study highlights the need for more robust
government interventions to enhance the capacity of
cooperatives to contribute to economic development, particularly
in underserved areas like Oyo State.
TABLE OF CONTENTS

Title page- - - - - - - - -

Approval Page - - - - - - - -

Dedication - - - - - - - -

Acknowledgment - - - - - - -

Abstract - - - - - - - - -

Table of content - - - - - - -

CHAPTER ONE

Introduction - - - - - - - -

1.1 Background Of The Study - - - -

1.2 Statement Of Problem - - - - -

1.3 Significance Of The Study - - - -

1.4 Objective Of The Study - - - - -

1.5 Research Questions - - - - - -

1.6 Statement Of Hypothesis - - - -

1.7 Scope And Limitation Of Study - - - -

1.8 Definition Of Term - - - - - -

CHAPTER TWO

2.0 Review of Related Literature - - -

2.1 Cooperative Financing - - - - -

2.2 Cooperative Development Effects before the Establishment

of NACB. - - - - -

2.3 Government Role in Cooperative Development

2.4 Cooperative Definition and Objectives - -

CHAPTER THREE

3.0 Research Methodology - - - - -

3.1 Research Methodology/Design - - -

3.2 method And Source of data Collection - -

3.3 Data Collection Instrument - - - -

3.4 Validation of Instrument - - - - -

CHAPTER FOUR

4.0 Presentations of Data Analysis and Interoperation

4.1 Data Presentation and Analysis According

to Research Questions - - - - -

4.2 Discussion of Result - - - -- -

CHAPTER FIVE

5.0 Summaries of Findings - - - - -

5.1 Conclusions - - - - - - -

5.2 Recommendations - - - - - -

Appendix - - - - - - - -

Bibliography - - - - - - -
 CHAPTER ONE

1.0 INTRODUCTION

This choice of this topic, the role of federal government in

cooperative financing cannot be over looked at the present

economic situation of the country. This is because of the fact that

the issue of cooperative financing has reached to look into in

Nigeria. The past and present regime emphasized on the best

way of encouraging cooperative development though this does

not means that all that is needed for cooperative development

has been achieved. Rural and cooperative development has

strategies and planning on way to articulate and execute the way

to help improve the standard of rural population. Development

and economic growth is essential determine by the standard of

living of both the rural and urban dwellers. We cannot talk of

development and growth of Nigeria economy neglecting the

growth and development of our rural ones.

Te experience and success achieved by Israel, China, Tanzania

and Mexico should serve as a motivator to ginger up our spirits,

interest enthusiasm and determination towards the development

of our cooperative base. A well planned rural development is the

answer to rural poverty, ignorance, supervision and congestion

in city centres. A well articulated and planned rural and

cooperative development by cooperative is an essential condition

to relational integrated cooperative development and economic

growth. This will also create awareness and increase the

economic standard of the rural population. And to eliminate such

plagues as ignorance, poor standard of living and general

backwardness associated with under development this issue of

infrastructural development which pertinent to cooperative

development will cloud our rural dwellers as long as the rural

areas are not developed. And one imagines that life without

electricity, pipe bore water, good networks and radio,

educational facilities, viewing centres and others. At this

junctures, I wish to make it very clear here that the Nigeria

agricultural cooperative and cooperative bank (NACB) which I

am studying renders both advisory and financing assistance to

any farmer.

This is what they do

1 Identify the interested farmers

2 Know their problems

3 Grant loan for them (financial assistance)

4 Help them prepared feasibility study

5 Advice farmers on the best way to embarked on project.

NACB Enugu branch office has embarked on many programmes

to educate farmer within and out side Enugu.

1.1 BACKGROUND OF THE STUDY

Cooperative; agricultural is the growth of crops and rearing of

animals for human consumption. Crops include cash and food

crops, seed seeding. It also includes those that engage in

livestock, horticulture and orderly. In the other hand, timber

production, forestry conservation etc are branches of cooperative

has no single origin, this is true in the economic history of other

countries all over the world. This field of human endeavour has

been as old as the nature and creation as Nigeria existed,

agriculture existed, our people has farmed and feed themselves,

dept flock before the advent of western civilization.

According to a famous book, encyclopaedia Britannica nineteenth

century scholars hypothesized four stages in man as cooperative

development, these includes:

1. A savage stage in which all man where hunters and

wanderers.

2. A herdsman or normal stage during which man domesticated

some animals.

3. A farming stage

4. Civilization stage

(Sources: encyclopaedia Britannica Vol. 9, 1981, 304) botanical

archeologically and zoological researchers have since attempted

to determine when and where men first change from hunter-

wanderers to pasturage-cost or agriculturalist.

These scholars and research generalized their findings

worldwide with the generalization. The writer assumed that

some should be the case with the historical development of

cooperative of cooperative in Nigeria. Socio economic wise took

the same turn.

Financing cooperative societies over the years has become a

significant area of interest for researchers, as well as the

banking and business sectors, given the critical need for

cooperative societies to secure funds for their fixed and working

capital, pay for services, and make interest-yielding investments.

Insufficient funds have consistently been a major limitation for

cooperative business enterprises in Nigeria. The issue of funding

has become particularly critical in this post-structural

adjustment era when, contrary to the expectations during the

structural adjustment period, opportunities for small-scale

enterprises cannot be fully utilized due to a general lack of

investible funds, compounded by the removal of subsidies,

leading to limited resources, tougher competition, higher capital

costs, and reduced access to credit (Chukuemeka, 2016).

The concept of alleviating financial constraints for prospective

entrepreneurs and small business owners who rely on

cooperatives has increasingly become a top agenda for

policymakers and researchers globally. This has led to the design

of innovative and appropriate funding models to support Micro,

Small, and Medium Enterprises (MSMEs) and strengthen the

capacity of cooperative societies, which are seen as powerful

engines of economic growth and development worldwide (Robu,

2013). There is also growing interest in creating wealth-

generating opportunities in low-income and rural areas,

particularly in terms of providing a reliable source of finance to

micro and small-scale entrepreneurs through the cooperative

model. The focus of cooperative societies or organizations is to

maximize the welfare of their members, traditionally achieved

through their credit mechanisms. Hence, cooperatives provide an

effective institutional framework that blends collective solidarity,

viable economic activities, and social mobilization (London

Economics, 2008).

Cooperatives may also offer significant benefits to micro and

small-scale enterprises by pooling their resources to achieve

scale and scope in their activities, leading to increased

performance. More significantly, the poor performance of past

government efforts to finance the small business sector has

highlighted the need for alternative institutional arrangements,

such as the cooperative model, that could provide more

satisfactory outcomes (Nwankwo, Ewuim, & Asoya, 2012). The

success of microfinance institutions in reaching low-income

groups can be enhanced by developing innovative strategies and

financial products, including small loans and credits for

microenterprises, particularly in rural areas. Beyond basic

savings and credit activities, cooperative societies could be

enhanced as on-lending microfinance institutions. Modern

microfinance has historical roots in the cooperative movement,

rural finance since the 19th century, and the microenterprise

development sector since the 1970s (Dunford, 2006). However,

the relationship between cooperative financing and microfinance

is still evolving, with increasing interest from policymakers and

researchers. Theoretically, a cooperative society is commonly

described as a business that is voluntarily organized, operating

at cost, and owned, capitalized, and controlled by member

patrons as users, sharing risks and benefits in proportion to their

participation (Satgar, 2003). It has three fundamental concepts

that differentiate it from other business forms: ownership and

control of the organization lie with those who utilize its services

(member patrons), returns on investment are shared equally, and

returns on the owner’s equity invested capital are limited

(Aribaba, 2012). Thus, the activities of a cooperative society are

geared towards its members or the owners of the business, who

are also its customers and users (Skurnik, 2002). Cooperatives

mobilize local savings and provide credit to members, thereby

encouraging thrift and entrepreneurial activity. They have

relatively simple administrative processes, and transaction costs

are small and shared. However, the unique structure of

cooperatives compared to other business organizations makes it

more difficult for them to obtain debt financing from traditional

capital sources, like the banking sector. Yet, the focus of the

Nigerian government’s microfinance policy is to enhance the

access of micro-entrepreneurs and low-income households to

financial services required to expand and modernize their

operations for rapid economic growth (CBN, 2011). The goal is to

broaden access to financial services for a large segment of the

productive population that would otherwise have little or no

access to such services (Oladejo, 2011).

1.2 STATEMENTS OF THE PROBLEMS.

Cooperative has always been the subject of critical comments

from the general public about the role that will play in the socio-

economic life of the populace. our issue of rural development, it

is the same in many of our rural areas, people have always been

heard criticizing government and its agents of being partial in

the provision of social amenities, been responsible for the

present rural urban immigration causing poor standard of living

in the country.

We all know quite well that over 80% of the agricultural

activities in the country are done in the rural areas. In the

village, farmers complain of the non-availability of some essential

commodities (pipe-borne water, electricity and road, credit

facilities such as loan from banks. all these make lot tive some

and born in the rural areas.

In general, the people complain that government should diver its

economic strength. Nigeria government and encourage the

youths to embark on cooperative agricultural production. This is

due to the fact that before the advent of oil born, the strength of

Nigeria economy was vested on cooperatives.

1.3 SIGNIFICANCE OF THE STUDY

The aim of this study is to find the best way of ensuring steady

cooperative development in Nigeria in Enugu state.

This topic was chosen to be in line with clarion call by the

government for a rapid cooperative development planners and

development in this great country and her state.

This study will also help our development planners and

agronomist to play more emphasis on the programs that will

facilities the rate of cooperative growth. This study is also aimed

at x-raying the importance of financial institutions to agricultural

transformation of life in cooperative.

Finally it is my believe that if any recommendations are reoffered

to and considered objectively by the government power, a new

answers will be created and our peoples attitude towards the

cooperative development will change positively.

1.4 OBJECTIVE OF THE STUDY.

The objective of the study is to crudity the elusive nature of

government emphasis on cooperative development. This topic

has been chosen due to the risen need for government to aid

financing agricultural cooperative in the country.

It will also help the individual farmers and all agronomist to

know how to obtain loans from those financing advice from such

federal establishment that will help individual in planning his

agricultural cooperative investment.

By the time any interested person would go through this piece of

work, it is believed, that some significance of federal

establishment financing the nation will be noticed. To cap it up,

the person will also see effort made by the federal government in

promoting cooperative development.

NO 1.5

1.6 STATEMENT OF HYPOTHESIS

Ho1: That producer cooperative society does not play

important roles in the agricultural sector.

HA2: That producer cooperative society plays important

roles in agricultural sector.

Ho2: That producer cooperative society has not been finding

it difficult to obtain loan from government.

HA2: That producer cooperative society has not been finding

it difficult to obtain loan from government.

1.7 SCOPE AND LIMITATIONS OF THE STUDY

The research work is to cover only Enugu zonal branch

operational area of Nigeria. Agricultural and cooperative bank

(N) it will not be study in detail the activities development. Time

constrains was one of my greatest problem.

There were constrains and limitations posed by the government

bureaucrats. As a result, it made things very difficult for me to

get all information required for this project.

1.8 DEFINITION OF TERMS

Cooperative is an economic institution which within the existing

system of free competition aims of correct wholly of party the

natural imperfections of the distribution of wealth.

AGRICULTURE: Agriculture is the growing of corps and rearing

of animals for human consumption.

FINANCING: This term “financing” in this context should mean

as monetary of loan to the agronomist.

DEVELOPMENT: This is an act improving from the initial state

of agriculture stage to a more standard term.

CHAPTER TWO
 LITERATURE REVIEW

2.0 INTRODUCTION

Although cooperative finance is not a new concept in finance,

business, and economics, there remains much to explore

regarding its potential impact among micro-entrepreneurs and

small venture owners who can organize themselves into

cooperatives. The connection between cooperatives and

microfinance has been well established, as cooperatives have

a long history of providing financial services to the poor and

low-income people (Shylendra, 2011). Cooperative banks and

credit unions were initially established to reduce poverty and

high indebtedness among small-scale farmers and craftsmen

in urban and rural areas. Therefore, the unprecedented

challenge of raising capital for small venture growth has

inspired micro-entrepreneurs and small-scale business owners

to exploit the benefits of coming together with others to form

cooperative societies. Such cooperatives help them finance

their business ventures and share other resources, including

knowledge, skills, and business information (Akpan, 2015).

Oladejo (2013) emphasizes the importance of cooperatives as

an informal capital market for entrepreneurship. Moreover,

cooperative societies provide a valuable opportunity through

which government interventions can be channeled for small

venture creation and growth, primarily due to their closer

relationships with micro and small entrepreneurs or

borrowers compared to banks. The regulation, structure, and

operating principles of cooperatives differ from country to

country. In Nigeria, there are two types of cooperative

societies: one that is promoted and operated by independent

citizens (either for all people or based on vocation) and the

other promoted by employees within their workplace (workers'

cooperatives). According to the Nigerian Cooperative Societies

Act of 2004, primary cooperatives operate at the community

level and must have at least ten members to be registered

with the State Departments of Cooperatives. Empirical

studies, such as Agbo and Chidebelu (2010), examined the

extent to which cooperative societies had access to the special

intervention fund on agriculture administered by the Nigerian

Agricultural Cooperative and Rural Development Bank

(NACRDB). They found that the bank's operational guidelines,

which include minimum credit requirements, type of crops

grown, approved loan sizes, and insurance cover, affected

access to the intervention fund. In a separate study, Aribaba

(2012) found that cooperative loans positively impact the

performance of small-scale business ventures and that

membership in a cooperative society is likely to benefit small

venture owners. Cooperatives in economic development or

movements have significant potential for the growth and

development of nations, even though they are more prominent

in developed countries than in developing countries. The 2014

Global Census on Co-operatives shows that the cooperative

economy contributes more than 10% of the Gross Domestic

Product in New Zealand (20%), the Netherlands (18%), France

(18%), and Finland (14%). Meanwhile, the cumulative world

cooperative assets stood at US$19.8 trillion, and they

generated US$2.96 trillion in annual revenue through 770,000

offices (United Nations, 2014). The report indicates a

preponderance of agricultural cooperatives, particularly in

India and China. In the United States, cooperatives are

essential sectors of the economy, including the agricultural

value chain, electricity generation and distribution, housing,

banking, and insurance (Oladejo, 2011). Similarly, in the

United Kingdom, consumer cooperatives control a fifth of the

market share and are prominent in the small supermarket

sector (Nwankwo et al., 2012). In Nigeria, the government has

used cooperatives to achieve various objectives in the

country's development, particularly in the agricultural value

chain and extension services (Oladejo, 2013).

Cooperative societies are widely used as a form of enterprise

worldwide. Cooperatives mobilize local savings and administer

credit to members, thereby encouraging thrift and

entrepreneurial activity. They have relatively simple

administrative processes, and transaction costs are small and

shared. They provide practical solutions to cooperative

members in achieving a goal beyond the resources of an

individual when working together (Akpan, 2015). Numerous

types of cooperative societies exist in Nigeria, including

agricultural or farmers, marketing, producers, employees,

trade or artisans, and credit and thrift (EInA, 2012). This

paper focuses on credit and thrift cooperatives, which advance

entrepreneurship through finance for start-up capital and the

growth of microenterprises. Cooperative members often act as

micro-entrepreneurs, primarily engaged in informal trading

and micro-production activities that require small amounts of

financial capital. These informal venture activities have a

cumulative positive impact on the economy. Consequently, the

collaborative efforts of banks and other financial institutions,

as well as the government, in funding small-scale business

ventures, can be channeled through the cooperatives system.

The principles and spirit of cooperatives are likely to help

ensure better loan recovery, reduce risk, and lower the cost of

intermediation for lenders (Nwankwo et al., 2012).

Cooperatives can complement the efforts of the government,

banks, and other financial institutions in funding

microenterprises by providing a vehicle for channeling finance

to them. Cooperative societies could serve as a database for

fund mobilization, from which their members would borrow in

line with cooperative principles. More importantly,

cooperatives can act as intermediaries between the lending

governments and banks on one side and the borrowing small-

scale business owners on the other side (Oladejo, 2013).

Meeting the credit needs of the low-income and poor

segments of society through cooperatives has been a major

topic of debate for decades. The potential impact of

cooperatives in the microfinance system is becoming more

recognized than ever before due to their nature, being pro-

poor and equitable in operations (Shylendra, 2011). Moreover,

cooperatives, as players in the informal market, have greater

flexibility in their thrift and credit activities than formal

banking institutions, which are closely monitored and

regulated by the central bank. Therefore, the potential

catalytic role of cooperative societies in the financial sector,

particularly in microcredit delivery to microenterprises and

small-scale ventures, is truly worthy of exploration to generate

relevant financial policy.

This chapter basically is on the review of literature of co-

operative financing and its relevance to the economic

development of co-operative in Nigeria.

 This chapter will be discussed under the following sub-

heading.

i. Historical development of co-operative societies

ii. Roles of co-operative societies in rural development

iii. Promotional efforts of the government in Nigeria co-operative

development

iv. Roles of government in co-operative development

v. Co-operative financing

vi. Constraints in financing of co-operatives

2.1 HISTORICAL DEVELOPMENT OF CO-OPERATIVE

SOCIETIES

Before proceeding to tell this history of co-operative

society, we must bear in mind that co-operative movement was a

way or philosophy of life which group of people adopted to help

themselves’ solve the economic problems of their time.

As one can see from creation that, man has always shown

sign of working together. The Ibo-man has a proverb which

buttress this more; “where a man is in difficulty he seeks for help

from another but when an animal is, she cannot turn to another”
 It is in furtherance of this that enriquez in (1896) wrote that

mans involvement in co-operative is essentially for

i. Improving the existing social order

ii. Achieving more happiness in life

iii. Bringing to man more human dignity and

iv. Bringing about social justice to all.

Ogujiofor E.A (2002:) The co-operative was an invention of

necessary. What gave rise to the co-operative movement was the

industrial revolution in the Great Britain.

The industrial revolution was a gradual change which made

it possible to use machines in doing the work previously done by

man’s hand.

The industrial revolution started with the invention of different

types of machines for the spring of cottons, weaving of cloth, for

planting and harvesting, for railway building and so on. It made

possible for rich men to use the machine and set up factionaries

where the employed thousands of factory workers.

The owners of factories were known as capitalist they

make profit at the expense of their workers and unscrupulous.

They exploited their workers and were never moved by the

pitiable conditions of their workers. The individual revolution

brought with it attendant evils, as well as untold hardship, some

of the hardship were;

i. Long hours of work sometimes 16 hours per day

ii. Very poor salaries/ wages often below subsistence level.

iii. Unhealthy or unsanitary surrounding in the factories led to

diseases and epidemics

iv. Through high process of commodity.

There were many evils of capitalism of which some of them were

unhealthy cut-throat completion and rivalry spite and jealousy,

greed and avarice. The working class people cried out loud

against the hardship, they appealed to the government of the

time in Britain to come to their aid and to help alleviate their

sufferings.

Cooperatives, particularly credit cooperatives established under

the Nigerian Cooperative Societies Act of 2004, play a crucial

role in raising funds among members to support those in need of

financial resources, whether for personal consumption or

investment in micro and small-scale ventures. Micro-

entrepreneurs, who are often poor economic actors involved in

petty businesses, typically lack clear rights to land and assets

(collateral), and are predominantly found in rural areas where

they face social discrimination (Shylendra, 2011). These groups

experience significant challenges in obtaining credit and other

financial services from formal banking institutions, such as

microfinance banks and commercial banks. Although

microfinance banks (MFBs) are designed to serve these

households, access to finance from these institutions remains

challenging. Microfinance stands out from other formal financial

products due to the small size of loans and savings, reduced

emphasis on collateral, and simplicity of operations (CBN, 2011).

NON INTERVENTION BY GOVERNMENT

Cooperative societies, with their widespread presence, easy

accessibility, and favorable terms for borrowers, can be

recognized as a significant microfinance institution. Despite the

adoption of microfinance banking policy, Nigerian banking

reforms have presented serious challenges to microenterprises

and small-scale ventures (Oladejo, 2013). In this context,

cooperative financing has emerged as a viable option to enhance

credit flow to low-income groups, including micro-entrepreneurs

and small-scale venture owners who contribute to economic

output. Additionally, cooperative financing can expand the

microfinance depositor base and strengthen the link between

savings and investment in the national development process.

Members of cooperatives generally display greater confidence

when working collectively rather than individually, believing that

cooperative efforts can lead to desired outcomes such as easier

and improved access to credit, as well as enhanced

microenterprise performance in terms of growth, revenue,

profitability, and job creation (Akpan, 2015).

Unfortunately, the working class cried out their sufferings but

the government did not do anything to help them, this was

because the government of Great Britain adopted an attitude or a

policy of non intervention in peoples private life or affairs. It was

the period of “LAIZER FAIR” attitude. The british government

thought that whether the capitalist paid low wages or traders

charged high process or whether they sold adulterated goods,

she was not willing to intervene.

 The evils of industrial revolution reached an alarming

proportion that philosophers, socialist and humanitarians

aroused and they started to show understanding to plight of

workers, they therefore appealed to the government to

intervene. When these could not also help the workers the

philosophers of co-operative started to pull their resources

together to form co-operative societies.

Robert Owen proposed “co-operative in place of competition so

in 1815 he mounted a campaign calling on all workers in Britain

to abandon their employer whom he called immoral citils and

move over to some virgin land where they would establish “

Home Colonies” to be on the basis of morality brotherhood and

common wealth. These colonies were to be known as “co-

operative communities” or village of co-operation.

Owen believes that capitalism and its attendant evils turned

human into selfish, dishonest, deceitful people.

Four of these co-operative communities were established and

they include.

i. Oribiston co-operative community (1825-1827)

ii. Ralahine co-operative community (1831-1833)

 iii. New harmony co-operative community (1825-1827)

iv. Queen wood co-operative community ( 1839-1845)

Of all the four (4) co-operative communities or colonies, the

Queen wood co-operative in Hampshire, was the most successful

even though it collapsed in 1845.

In his writings “essay on the formation of characters “Owen

fought doggedly for the promulgation of law guiding factories,

child abuse, etc

However, in putting Owen theory into practice, problems arose.

The first successful modern co-operative is the Rochdale society

of equitable pioneers of England in 1844. This society was made

up of 28 members (27 men and one woman) their initial purpose

was to form a society for the purchase and supplies for their

business. The principles of Rochdale society served as a model

for the development of modern co-operatives.

2.3 ROLES OF CO-OPERATIVE SOCIETY IN RURAL

DEVELOPMENT.

A co-operative is a pan-humanist business organization formed

by individuals who are desirous of pulling themselves and their

resources together to form a democratically controlled

organization devoid to pecuniary gain. The uniqueness of co-

operative and its flexibility permits it to be practical among

farmers, fishermen, artisans, industrial and commercial workers,

drivers, students, and market men and women e.t.c.

Membership of co-operative cut across men and women, the poor

and the rich, the producers and the consumers, the literate and

the illiterate, the might and the low.

Co-operative may be defined as: a voluntary association of

persons grappling with the social economic problems, and legally

constituted to serve the common needs of its members,

democratically, providing services at low cost and sharing

benefits in proportion for use.

The federal government of Nigeria had over the years adopted

several development strategies and programmes geared towards

enhancing rural productivity. Among them includes:

i. Integrated rural development

ii. Employment generation, example National Directorate of

Employment (NDE)

iii. Agricultural development like Operation Feed the

Nation(OFN). Green revolution accelerated food production.

iv. River Basin Development Authority.

v. Self help or community development.

2.4 PROMOTIONAL EFFORTS OF THE GOVERNMENT IN

NIGERIA COOPERATIVE DEVELOPMENT.

i. LEGISLATION: The first of it was passed in 1935. From

1951, the country grew into regions, promoting regional co-

operative laws. Between 1935 and 1656, each of the three

regions East, West and North enacted their own laws. A

federal co-operative law was enacted in 1993 by military.

ii. SUPERVISION: This role tied the government to the co-

operative movement. Instead of co-operative movement, it is

now government that undertakes the following duties;

Education, Inspection, Auding, Arbitration, liquidation and

others.

iii. TECHNICAL ASSISTANCE: Government employees serve as

extension agents, educators and other specialized function

which render co=operative effective and efficient.

iv. FINANCIAL AID: Government founded co-operative and

other specialized agencies. These funds constitute block

 sum in financing co-operatives. This is another function,

which tie the hands of the co-operative movement.

Government is a state function which is geared towards

ensuring generally to minimize the pains of the citizenry

and maximizes their joy.

This is where co-operative and government share much in

common. The agenda of every co-operative society is to

bring joy to members and the entire citizenry. Any sensible

government and the expected to antagonize co-operative

instead it should embrace it to function effectively and

efficiently.

2.5 ROLES OF GOVERNMENT IN NIGERIA CO-

OPERATIVE DEVELOPMENT.

The government takes no special interest in the co-operative

movement outside providing it with the circumstances

granting minor privilege in the form of reduced tax rates.

Government takes active direct role in organizing and

controlling co-operative. Special ministries are created to

effect this direct involvement this gives room to state

sponsored co-operative movement.

 The greatest service rendered to the co-operative movement

by the federal government was in the area of co-operative

education. The government realized the importance of co-

operative education to the movement and therefore

completely took over the co-operative collages at Kaduna to

carter for the increasing population which they are meant to

serve. Also public awareness was geared towards winning at

least 25% of the adult population to the co-operative

movement in the nearest possible time.

2.6 CO-OPERATIVE FINANCING

Finance is the lifeline of any organization be it profit oriented

or religious organization, finance concerns itself with

sourcing.

INTERNAL OR OWNED FUND: these are fund which belong

to the co-operative society. The right to use the sources and

cost are relatively free because it belongs to the co-operative

society.

This sources of finance is very important in the life of co-

operative society. This internal sources of fund has minimal

cost or interest owned capital may also be called “risk of

equity capital”. The following are sources of internal or owned

fund, they include:

a) Share capital contributed

b) Reserves

c) Entrance fees

d) Fines and penalties

e) Members deposits/savings/loans

f) Surpluses from successful business operation.

EXTERNAL OR BORROWED FUNDS: is a capital borrowed

from another person or party. The need for borrowed fund

is necessitated by the fact that it is very difficult for co-

operative or any organization for that matter to be

completely self reliant in financing its operations. External

financing has been indeed part and parcel of business

expands. Borrowed fund bears interest which must be

repaid at a fixed date and rate. The following are sources of

borrowed funds or external funds in co-operatives:

a) Bank loan

b) Overdraft

c) Grants
 d) Trade credit

e) Crop finance

f) Trade deposit

2.7 GOVERNMENT ROLES IN CO-OPERATVE FINANCING

The government shall recognize and respect the autonomy and

operational independence of the co-operative sector/promote

promote creation of national co-operative financing agency to

provide financial backing, give micro and soft loans to co-

operative business society which goes a long way in helping

and facilitating the operation of the co-operative towards the

achievement of the societal goals and attaining a greater

height in the economic development as a whole.

2.8 CONSTRAINTS IN FINANCING OF CO-OPERATIVE

The problem in cooperating or raising of funds among the

cooperatives in Nigeria has some impediments.

i. Poor accounting and record keeping

ii. Dishonesty among the leadership, there are cases

involving embezzlement of funds amongst cooperative

practioners.
 iii. Majority of cooperative are moribund do both create the

impact expected of them.

iv. High interest rate structure

v. Government in Nigeria does not give concession to

specialized backs which will enable them to extend

adequate funds to cooperative societies

vi. Improper funding both within and outside the cooperative

society

vii. Lack of collateral as demanded by the lending institution.

CHAPTER THREE

3.0 RESEARCH DESIGN AND METHODOLOGY

3.1 INTRODUCTION

This chapter describes the research design, sources of data,

method of data collection= population and sample size, sample

techniques, validity and reliability of measuring instrument,

method of data analysis and their administration for the purpose

of gathering information for the study.

3.2 RESEARCH DESIGN

 The research designs used for this study are the historical

and descriptive designs. The historical design deal with

determination, evaluation and explanation of the past event for

the purposes of gathering a better and clearer understanding of

the present and making reliable predication of the future.

The descriptive designs on the other hand is concerned with the

collection of data for the purpose of describing and interpreting

existing condition like prevailing practices, beliefs, attitudes and

processes.

3.3 SOURCES/ METHODS OF DATA COLLECTION

The information used for this research was collected from

primary and secondary sources of data, through administration

of questionnaires and consultation of written materials.

PRIMARY SORCES OF DATA

These are concerned with the originality of the research

materials in which the research has the ability to get first hand

information. It deals with the conducting of research from hand

information. It deals with the conducting of research from the

scratch. The data from the primary sources is more reliable and
dependable. The researcher can prove statistically the outcome

of the result based on the his confidence in the data collected.

The primary sources of data include;

i. Observation

ii. Interview

iii. Experience

iv. Questionnaires

SECONDARY SOURCE OF DATA:

These are data that have already been researched on collected

group or institutions for reference purposes for example to know

the number of care in Imo State or the rate of crime in the state.

To get the data of this nature, we need to make consultations

from government institutions or agencies.

This kind of data cannot be accurate but can be assumed to be

accurate to a cooperative business reports magazines, journals,

internet browsing, existing text on cooperative, lectures and

seminars etc.

3.4 POPULATION AND SAMPLE SIZE

 The population of the study is drawn from three selected

primary cooperative societies in Ideato South L.G.A of Imo State.

Names of Number of Number of Total

cooperative males females

societies

Elugwu 61 53 114

ntueke

farmers

multipurpos

cooperative

society

Idinaotu 129 58 187

Elugwu

ntueke

Ideato

south

farmers

multipurpo

se
 cooperative

LTD

Alaoma 63 39 102

peer group

cooperative

society

Total 403

403is the population of societies in Ideato South of Imo State.

SAMPLE SIZE

The sample size of this research work on the role of the federal

government in cooperative financing (a case study of selected

rural based cooperative societies in Imo state) is determined by

finding 20% of the total population and applying the result to

each of the cooperative society.

Since the population is 403

Assumption percentage is 20%

Therefore 20 x 403

100 1 =80.6

=81
Therefore the simple size for

 Elugwu Ntueke farmers multipurpose cooperative society

limited,

Total Population = 403

Society population = 114

20% of the total population 81

Therefore, 114 x 81 = 22.9

Idinotu Elugwu Ntueke Ideato South farmer’s multipurpose

cooperative society limited

Total population = 403

Society population = 187

20% of the total population 81

Therefore, 187 x 81

403 1

=37.6 = 38

Alaoma peer group cooperative society.

Total population = 403

Society population = 112

20% of the total population 81

Therefore 112 x 81 =22.5

404 1

=23

3.5 SAMPLE TECHNIQUES

The simple random sampling and stratified sampling

method were used. This helps in making sure that every member

of each department has a chance of being selected for the study.

3.6 VALIDITY AND RELIABILITY OF MEASURING

INSTRUMENT

Validity refers to the ability of an instrument to measure

what is been designed to measure. In this study, questionnaires

were used for pre-test to determine the validity of instrument

used. Reliability also deals with the ability of an instrument to

give the same result when it gives an accurate result. No matter

the number of times such measurement is taken.

For this study, data were collected with use of the following

primary and secondary instruments,

i. Interview

ii. Observation

iii. Texts

iv. Published articles

 v. Encyclopedia

QUESTIONNAIRES

This is a data collecting instrument containing sets of

questions design and distributed to the sample size of any

research, which serves as information or data for the research

work distributed in such manner that guarantees respondents

convenience and comfort.

The questionnaires were personally administrated to ensure that

they get to the targeted respondents. Though it has a setback in

the sense that it does not give the respondent room for additional

information that may facilitate research.

INTERVIEW

This a face to face interaction with people who are in better

position to provide relevant information based on some technical

questions asked.

This is one of the easiest ways or instruments of getting

information for any research work. Unlike questionnaires, the

researcher is more likely to get more information’s for his work.

The present of the researcher may not give room for the

pacification of data by the respondents.

3.7 METHOD OF DATA ANALYSIS

The information gathered for the study was analyzed with the

use of percentage tables and chi-square method to test

hypothesis. Formula for percentage table is no of total

x 100
respondent per question

No of total respondents

Formula for chi-square, statistical method

X2 = (oi-ei)

Where

X2 = Chi-square

N = no of observations

O1 =observed frequencies

E1 = expected frequencies and is been calculated thus

Ei Row total x column total

Grand total
 CHAPTER FOUR

4.0 PRESENTATION AND ANALYSIS OF DATA

4.1 INTRODUCTION

In this chapter four, data collected for the purpose of

ensuring research question and testing hypothesis formulated in

the study were presented and analysis of collection of data from

respondent.

4.2 PRESENTATION OF DATA

The strategy adopted by the researcher involved detailed

and careful analysis of the available data and which the findings

were presented in a tabular form using simple percentage.

4.3 DATA ANALYSIS

In line with research methodology, a hundred and fifty

questions were distributed and 120 were returned while 30

questions were not returned.

This number of question that was returned should be used as the

analysis. Apparently five out of the seventeen questions were

randomly chosen as the sample to be used in analyzing response.

TABLE 1

Question 1: IS USEFUL TIME FARMER?

Options Frequency Percentage

Extensive 60 50%

Intensive 40 33.3%

Unspecifying 20 16.7%

Total 120 100%

The table 1 above shows that 60 or 50% of respondent said that

they are extensive farmers and 40 or 33.3% said they are

intensive farmers; also 20 or 16.7% were unspecifying.

TABLE 2

Question 2: Do you agree that federal government financed

the activities of rural based co-operative societies in Imo

state?

Option Frequency Percentage

Yes 80 66.7%

No 40 33.3%

Total 120 100%

Here 80 respondents with 66.7% agreed while 40 with 33.3%

disagreed.

TABLE 3
Question 3: Do you agree that rural based co-operative

society in Imo state is benefiting from NACRDB Loan

Scheme.

Option Frequency Percentage

Yes 70 58%

No 50 42%

Total 120 100%

TABLE 3 shows that 70 respondent to 58% agreed while 50

respondent with 42% disagreed.

TABLE 4

Question 4: Does the federal government finance the rural

based co-operatives in Imo state through NEPAD

Programme.

Option Frequency Percentage

Yes 30 25%

No 90 75%

Total 120 100%

In table 4, we observed that 30 respondent with 25% agreed

that federal government the rural based co-operatives through

NEPAD Programme while 90 respondent with 75% disagreed.

Option x Frequency Percentage

TABLE 5:

Question 5: What do you think are the problems or

constraints of rural based co-operatives in Imo state?

Option Frequency Percentage

Lack of finance 50 42%

Illiteracy 30 25%

mismanagement 40 33%

Total 120 100%

The table 5 shows that 59 respondents with 42% said that the

problem is lack of finance, 30 respondents with 25% said that it

is illiteracy, while 40 respondent with 33% said that it is

mismanagement.

4.4 INTERPRETATION OF RESULT(S)

Based on the evaluation of the above analysis data, it can be

observed that the role of federal government in co-operative

financing is still at infant stage.

 The government will promise to finance co-operative project

but at the end the day it will not be implemented because many

people are seeing the government loan, grand and so on as a

national cake.

Let the federal government try to play more roles in co-operative

financing this way lead to economic development.

 CHAPTER FIVE

5.0 SUMMARY CONCLUSION AND RECOMMENDATION

5.1 INTRODUCTION

This summary gives conclusion and recommendations of the

study conducted by the researchers to examine the role of

federal government in cooperative financing.

5.2 SUMMARY OF FINDINGS

From the forgoing it has been deduced and stated that

cooperative is relevant in rural development. Simply put,

cooperative is seen as a force that compels its workers member

for effective and efficiency in their work and also seek for the

interest as well as protect them from the exploitation.

The oral interview and documents used in this researcher

study touched on some crucial problem facing cooperative

development in Nigeria, notable are;

I. Lack of finance

II. Lack of technological know how

III. Mismanagement of funds and fraud

IV. Lack of probity and accountability

V. People seeing government loan grants as national cake.

V.3 CONCLUSION

In conclusion of this work it should be pointed out that

the federal government has an important role to play in

cooperative financing. Therefore for any country to make a

progressive drive, cooperative development and have a

reliable agricultural project through which the national

income of the country can grow. Moreover, this study has

shown the best measure to promote cooperative

development and ensure a substantial economic to work out

more methodology and more reason for financing

cooperative projects in Nigeria as a whole.

V.4 RECOMMENDATION

From the researcher’s observation the following

recommendations are made,

a. The federal government should put in more effort on

ensuring that loans are given to farmers,

 cooperatives in the country without much

bureaucracy.

b. Creation of a specialized bank for the running of

cooperative or the strengthening for existing

Nigeria agricultural cooperative and rural

development bank (NACRDB).

c. They should advice any of the federal owned

financial institution that it is their duties to ensure

that the loans they are given to the customers are

not diverted to some other projects rather the said

cooperative project.

d. Appointment of an auditor by the government to

check the stand of financial statement of

cooperative.

e. Education, seminar, workshop and training of

cooperative members, employees and general

public.

f. I will also suggest that the federal government

should endeavor to hand the federal government

financial institution to obtain loans from the

 international bodies comfortably without any

financial difficulty.

g. Finally, research believes that if the above

suggestions are implemented or followed properly,

these will be a progressive drive in areas of

cooperative development in Nigeria.

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opsegm/grace.pdf
 APPENDIX
QUESTIONNAIRE

TITLE : ROLES OF FEDERAL GOVERNMENT IN

COOPERATIVE FINANCING (A CASE STUDY OF OYO

STATE)

Tick Yes or No where appropriate.

1. Sex respondent
A. Male
B. Female

2. Age of respondent
A. Below 25 years
B. Between 25-35 years
C. Between 36-45 years
D. Above 45 years

3. Present department of respondent

A. Operation
B. Clearing
C. Transfer
D. Cashier

4. Educational qualification of the respondent

A. Professional Banker
B. MBA
C. First Degree / HND
D. ND/ Diploma Certificate
E. WASCE/GCE

SECTION B
Topic: The role of federal Government in cooperative financing in
Imo state.
1. Do you agree that the federal government finance the
activities of rural based cooperative societies in Imo State?
Yes No
2. Do you agree that the rural based cooperative society in
Imo state benefits from NACRDB loan scheme? Yes
NO
3. Does the federal government finance the rural based
cooperative in Imo state? NEPAD program? Yes
No
4. What do you think are the problems or constraints of rural
based cooperatives in Imo state
a) Lack of finance
b) Mismanagement
c) Illiteracy
1. Is there any problem facing cooperative financing in
Ikeduru L.G.A? Yes No
2. Does the federal government contribute in financing rural
based cooperative societies in Imo State? Yes
NO
3. Does the loan provided by the federal government to rural
cooperative societies attract higher or low interest rate? Yes
No
4. Are cooperative societies in Ikeduru adequately funded by
the government? Yes No
5. How much has the federal government disbursed to rural
based cooperative societies in Ikeduru L.G.A?