CHAPTER ONE
INTRODUCTION
1.1
Background of the Study
In the pursuit of sustainable development and poverty reduction, nations across the
globe have explored diverse strategies to uplift their populations from the clutches of poverty
and foster economic growth. Cooperative societies have emerged as a dynamic and inclusive
instrument in this endeavor, showcasing their potential to alleviate poverty and stimulate
economic development in various countries, including Nigeria. Rooted in the principles of
collective effort, shared responsibility, and mutual benefit, cooperative societies have gained
recognition as a potent vehicle for addressing socio-economic disparities and fostering
community-driven development (Yunusa, Micheal & Joseph, 2018).
A co-operative society is an autonomous association of persons united voluntarily to
meet their common economic, social and cultural needs and aspirations through a jointlyowned and democratically-controlled enterprise. One dictionary defines a cooperative as "a
jointly owned enterprise engaging in the production or distribution of goods or the supplying
of services, operated by its members for their mutual benefit, typically organized by
consumers or farmers". Cooperatives frequently have social goals which they aim to
accomplish by investing a proportion of trading profits back into their communities
(Hambolu, 2021).
International Cooperatives Alliance and International Labour Organization (2018)
defines cooperative societies as
an
autonomous
association
of
individuals
who
voluntarily comes together as united force in order to meet their mutual social,
cultural and economic needs and wants through the help of a jointly owned and
democratically managed enterprise. This type of group mostly of interested persons
characterized by limited means of livelihood usually make equitable contribution to the
1
resources required and thereby accepts fair or equal share of the benefits and risks that
may come with the undertaking in which the members participate.
According to Antai and Anam (2015), cooperative societies are voluntary associations
of people who work together to promote their economic interest. It works on the principle of
self-help as well as mutual help. Therefore, the main objective is to provide support to the
members. People come together to pull their resources, utilize them in the best possible
manner, and derive some common benefit out of it (Adekola & Dokubo, 2017). Committee
for the Promotion of Advancement of Cooperatives (COPAC, 1999 in Adekola & Dokubo,
2017) defined cooperative as an autonomous association of a group of people who got united
on a voluntary basis to meet their economic, social, as well as cultural needs.
Ezekiel (2017) thus indicates that cooperative societies remain most important
catalyst
for
individual
and community entrepreneurial growth; “because it retains
within the communities in which they operate the capital that they mobilize themselves,
as well as surplus derived from outside transactions, both accumulating for further
entrepreneurial development”. On the other hand, cooperative is a phenomenon that denotes
any form of working together voluntarily by persons or individuals to achieve common goals.
To narrow it down cooperative refers to the activities of an association of persons with
similar social, cultural and economic needs who willingly come together to. The poverty
trend in Nigeria is further aggravated due to lack of basic needs for decent life; access
to clean or portable water, healthcare services, education opportunities, shelter, housing
(UNDP, 2015).
Despite successive government’s efforts in reducing poverty, its situation in Nigeria
is quite worrisome as the story of poverty alleviation seems to be gloomy over the
years (Abbas, 2019). It is therefore not surprising that co-operative society in Nigeria
are faced by various agents of state and private authorities from which they hinder the
progress of people. Unfortunately, since poor people lack independence, power and voice
2
which to rely on for daily survival, they become cheap for all kinds of political and
economic exploitation. The gravity of poverty and its situation is however dynamic across
the
globe. Co-operative Societies have played a fundamental role in enhancing the socio-
economic status of members. The group encourages people to save, mobilize the fund saved
through loan at low rate of interest to members, in order to run his or her Agricultural
practices or business and have access to external sources of fund (Shah, 2018).
Looking through the activities of cooperative societies, the Nigerian system which
is fundamentally democratic in nature must also embody the wishes and aspirations of
the people. In the case of cooperative societies, the situation should not be in anyway
different as efforts made by government have failed over time to alleviate poverty from the
society. For instance in the new thinking Sapru (2018), emphasized that demands for
policy action are usually made on political system by different constituents including
civil society organizations, non-governmental organizations, pressure groups, political
parties, citizens, etc. Thus, since poverty still remains a serious menace in Nigeria, and
particularly in
Ogun State State, despite
to
the
reduce
it,
role
that
various efforts made by successive governments
such non-governmental organizations and bodies like
cooperative societies play in poverty alleviation in recent time becomes imperative.
Poverty is a menace that continues to pose serious threat to the development prospects
of Nigeria in general Ogun State in particular. The alarming
incidence of poverty in Edo
State especially among the most vulnerable in the society; women, children, youths is
serving as hindrance to socio-economic development of most of its communities. Cooperative society has helped farmers, traders, business men and women, civil servants to
obtained loan from banks to member’s especially individual member without collateral to
established their business. Co-operative society has helped to provide better services to
members, which has enable them increase their incomes based, foster business
entrepreneurial skill and also satisfy needs of the poor (Busari & Aminu, 2017).
3
In the case of Nigeria, several poverty alleviation policies were designed,
initiated and implemented over time with the hope to improve living standard of its
citizens. Some of the past programmes for instance includes:
Empowerment
National
Economic
and Development Strategy (NEEDS), Poverty Alleviation Programme
(PAP), National Poverty Eradication Programme (NAPEP), National Agricultural
Development Authority (NALDA), Directorate of Food, Road
and
Rural
Land
Infrastructures
(DFRRI), National Directorate of Employment (NDE), Family Support Programme (FSP),
Family Economic Advancement Programme (FEAP), Better Life Programme (BLP), Peoples
Bank and Community Banks initiatives, Green Revolution (GR), and Operation Feed the
Nation (OFN) , etc. (Ugoh and Ukpere, 2019).
In recent decades, the quest for sustainable economic development and poverty
alleviation has emerged as a critical priority for nations across the globe. In the context of
developing economies like Nigeria, these challenges are even more pronounced, requiring
innovative and community-driven approaches. Cooperative societies have emerged as a
potent instrument in this endeavor, offering a framework through which communities can
collectively address poverty and stimulate economic growth. This introduction aims to
explore the pivotal role of cooperative societies in Ogun State's journey towards poverty
alleviation and economic development.
1.2
Statement of Problem
Cooperative societies have gained prominence as powerful instruments for poverty
alleviation and economic development, both globally and within various regions of Nigeria.
Ogun State, a vital economic hub in Nigeria, has also witnessed the proliferation of
cooperative societies aiming to address socio-economic challenges and foster local
development. However, despite the potential benefits offered by cooperative societies,
several critical issues persist within Ogun State's cooperative landscape, hindering their
optimal contribution to poverty alleviation and economic growth. Firstly, the viability and
4
sustainability of cooperative societies in Ogun State are confronted by organizational
challenges. These challenges encompass the effectiveness of governance structures,
transparency in decision-making, and the ability to adhere to cooperative principles. Instances
of mismanagement, inadequate capacity building, and conflicts within these societies can
undermine their potential impact, rendering them less effective as vehicles for poverty
reduction and economic advancement.
Secondly, the limited access to financial resources and capital presents a significant
hurdle for cooperative societies in Ogun State. Many of these societies, particularly those
situated in rural and underserved areas, struggle to secure sufficient funding for their
operations and initiatives. The lack of access to credit, coupled with bureaucratic hurdles in
obtaining loans from financial institutions, can impede their efforts to invest in incomegenerating activities and seize economic opportunities, thus constraining their potential
impact on poverty alleviation and economic development. Moreover, issues of inadequate
technical knowledge and training hinder the ability of cooperative societies in Ogun State to
engage in productive and innovative ventures. A lack of skill enhancement programs, modern
business practices, and technological integration can limit the capacity of cooperative
members to adapt to evolving economic conditions and emerging market trends. This
deficiency in skills and knowledge diminishes their competitiveness and restricts their ability
to contribute substantially to economic growth and poverty reduction.
Furthermore, the cooperative society in Ogun State is influenced by external factors
such as inadequate government support, policy inconsistencies, and limited infrastructure.
The absence of a conducive regulatory environment, coupled with a dearth of tailored
policies to support cooperative development, can hamper the growth and sustainability of
these societies. Insufficient physical and digital infrastructure further restricts their ability to
access markets, connect with suppliers and customers, and participate in value chains
effectively. In light of these challenges, it is imperative to conduct an in-depth investigation
5
into the current state of cooperative societies in Ogun State and their role in poverty
alleviation and economic development.
1.3
Objective of the Study
The main objective of this study is to investigate the cooperative societies as an
instrument for poverty alleviation and economic development in Ogun State. Specifically, the
study tends to:
i.
Identify the roles of cooperative society plays in poverty alleviation in Ogun State.
ii.
Investigate the problems faced by cooperative society in reducing poverty in the state.
iii.
Highlight the benefits of cooperative society in enhancing the economic development
of their members.
iv.
Examine the relationship between cooperative society, poverty alleviation and
economic development in Ogun State.
1.4
Research Questions
i.
What are the roles cooperative society plays in poverty alleviation in Ogun State?
ii.
What are the problems faced by cooperative society in reducing poverty in the state?
iii.
What benefits do cooperative societies have in enhancing the economic development
of their members?
iv.
Does cooperative society have any significant relationship with poverty alleviation
and economic development in Ogun State?
1.5
Research Hypothesis
H01:
Cooperative society does not play significant roles in poverty alleviation in Ogun
State.
H02:
There are no identifiable problems that cooperative societies face in their efforts to
reduce poverty in Ogun State.
H03:
Cooperative societies didn’t provide substantial benefits that contribute to the
economic development of their members in Ogun State.
6
H04:
There is no significant positive relationship between the effectiveness of cooperative
societies and poverty alleviation as well as economic development in Ogun State.
1.6
Significance of the Study
This study is multifaceted and holds considerable importance for various
stakeholders. The study aims to provide valuable insights into the role and impact of
cooperative
societies
in
addressing two
critical
issues:
poverty and
economic
underdevelopment. The significance will be elaborated as follows:
The findings of this study will serve as a foundation for evidence-based policy
formulation and implementation in Ogun State. Government agencies, policymakers, and
relevant authorities can use the research outcomes to develop strategies that promote the
growth and effectiveness of cooperative societies as tools for poverty alleviation and
economic development. Understanding the roles and challenges faced by cooperative
societies in poverty alleviation and economic development will enable more targeted and
efficient resource allocation. Government funding and support will be directed towards
initiatives that have been identified as effective in fostering cooperative growth and impact.
Also, cooperative societies often operate at the grassroots level and have a direct
impact on local communities. By investigating their contributions to poverty reduction and
economic progress, the study will empower communities to actively engage with cooperative
initiatives and take advantage of the benefits they offer. By highlighting the benefits and
challenges faced by cooperative societies, the study contributes to the broader socioeconomic
development discourse in Ogun State. Cooperative societies, when effective, can contribute
to increased income, employment generation, and enhanced livelihoods, all of which have a
direct impact on the overall development of the state.
The study will facilitate capacity-building initiatives for cooperative societies. By
identifying the problems they face and the benefits they provide, interventions can be
7
designed to address challenges and enhance the capacity of cooperative societies to
effectively contribute to poverty reduction and economic growth.
Lastly, the study adds to the academic knowledge base by providing empirical
evidence of the specific ways in which cooperative societies contribute to poverty alleviation
and economic development. This information will contribute to existing literature in
economics, development studies, and social sciences, enriching the understanding of
cooperative models as tools for positive change.
1.7
Scope of the Study
The study is designed to investigate the cooperative societies as an instrument for
poverty alleviation and economic development in Ogun State. It is directed to co-operative
members within the geographical location of Abeokuta South Local Government Area.
1.8
Limitation of Study
A research work of this nature cannot come to an end without limitation. The
researcher encountered numerous problems which affected the smooth running of the work.
These problems includes, difficulty in procuring materials for the project, time factor and
financial constraints
1.9
Definition of Terms
Cooperative: An association of individuals united voluntarily to meet their economic,
cultural, social needs and aspirations through a jointly owned and democratically controlled
enterprises.
Poverty: Is the number of people living below a specified minimum level of income an
imaginary poverty line knows nationals boundaries and is independent of the level of national
per capital income. However, it magnitude may be much less in terms of total number or
percentage of the total populations.
8
Alleviation: This as a term in this research work means the reduction or lessening and
elimination of any factors that leads to poverty and deprivation among the populace so as to
increase their income level.
Members: These are persons who are fully registered in the society and who have completed
all the necessary registration process.
Economic Development: Economic development signifies the sustained improvement of a
region's economic conditions, leading to increased wealth, productivity, and overall wellbeing of its population. It involves enhancing factors such as income levels, employment
opportunities, infrastructure, industrial growth, and technological advancement.
9
CHAPTER TWO
2.0
LITERATURE REVIEW
2.1
Conceptual Framework
2.1.1 Concept of Poverty
Poverty defies a common universally accepted definition due to its multidimensional
nature. Many writers have attempted to define poverty based on their perceptions or
discipline. While some writes have approached the concept from the perspective of human
development, others have defined it from economic point of view. Defining poverty from the
perspective of human development, the United Nations Development Programme and
Millennium Development Goals (2015) defined poverty as restriction of human freedom,
dignity and self-respect. Similarly, expressing their perception of poverty from the viewpoint
of human development, Effiong and Archibong (2014) posited that indicators of poverty
include insecurity, high rate of crime, unemployment, child labour and high illiteracy rate.
According to Abbas (2016), poverty can similarly manifest in “poor health, insecurity,
voicelessness, powerlessness, low level of income, food insecurity and other social
exclusions in the society.”
Those who define poverty from the economic view point underscore material
wellbeing as the basis for its understanding. Considering this perspective, Brown cited in
Abbas (2016) argued that a person is poor when he is incapacitated by his scarce resources.
According to Brown (2015), poverty exists because people are unable to acquire those
necessities that are needed to improve their standards of living. From the foregoing, it is clear
that a universal definition of poverty is not common. However, an acceptable definition of
poverty should have basic attributes of human recognition and adequate resources to live
decently. In Nigeria for instance, the Central Bank of Nigeria (CBN) cited in Abbas (2016)
defined poverty as:
A state where an individual is not able to carter adequately for his or her
basic needs of food, clothing and shelter, is unable to meet social and
10
economic obligations; lacks gainful employment, skills, assets and selfesteem; and has limited access to social and economic infrastructure such
as education, health, portable water and sanitation and consequently has
limited chances of advancing his or her welfare to the limit of his or her
capabilities (Abbas, 2016).
World Bank (2015) describes poverty as a multi-dimensional phenomenon and
sees it as a state of short or long-term deprivation and insecurity in basic human
needs. Chamber Universal Learners’ Dictionary defines poverty as the condition of being
poor. Poverty is a multi-faced phenomenon that actually hinders the satisfaction of
human basic life requirements, i.e. the condition that deprives the individual the
necessities for existence such as good food, potable water, shelter, clothing as well as those
that bother on the security of life as health, education opportunities and freedom (Spencer,
2015).
Poverty manifests not only in the lack of adequate access to physical capital but
also entailed deprivation of natural, social as well as human capital;
natural capital in
the sense of land, water, animals, trees and minerals while physical includes tools, machines,
human capital as well as land and building improvement (Ellis, 2016). In fact, poverty
is a condition whereby an individual is unable to generate sufficient income to secure
the basic standard of living and this situation manifest in all sphere of life in most postcolonial African countries like Nigeria.
Alleviating this phenomenon has become the biggest challenge to the world at
large because of it multi-dimensional, deep-seated and complex nature. Therefore, there
has been search for such community based approaches that can overall fight against
multidimensional poverty and also generates confidence in the communities after numerous
pro –poor growth approaches such as mercantilists approach on foreign trade, classical
economists
approaches
and
industrial
revolution
11
as
well
as
basic
needs
and
capabilities/entitlements approaches failed to generate adequate results to compliment their
effort (Ijaiya, 2015; United Nation 2014).
World Bank (2004) describes poverty alleviation as the means of strengthening
the domain of transferability. Identifying asset, creating access to the available asset
and enhancing its transferability to command welfare. Poverty reduction should
necessarily incorporate resolving social, economical, cultural and psychological barriers
(Bhardwaj, 2019). Ihenacho, Chikaire, Ejiogu-Okereke, Oguegbuchulam, Osuagwu and Obi
(2015) posited that reducing poverty requires attacking many interrelated forces that keep
poor people in a state of deprivation as well as expanding people’s access to participation
in decision-making process and knowledge, training and markets as well as other
productive resources for income generation such as land, technology,
credit
and
adequate information needed.
Poverty alleviation refers to all efforts made by governments, organization
and corporate individuals that attempt to put, push or pull the poor out from the nexus
of poverty or put them above poverty line. According to Ogwumike (2018) who stated
that the poverty reduction measures put in place in Nigeria either during pre –SAP era,
SAP and democratic era focuses more attention on economic growth, basic needs and
rural development strategies.
Any given poverty reduction mechanism must enhance capabilities which permit
greater amount of output from any level of input, while the increased output must go a long
way to increase standard of living of the people and thereby reduces poverty (Atoloye,
2017).The success of any poverty reduction measures are determined by some major factors
as; a well-defined property rights for landholder and informal entrepreneurs, well
developed markets that strengthens savings mobilization, promote a sound macroeconomic
stability, security of life, moderate size of government, efficient civil services, impartial
regulatory, good governance with emphasis on tackling corruption, inefficiency and enhance
12
accountability (Quattara 2019). In other developing nations, cooperatives have significantly
contributed to mobilization and distribution of financial capital, created employment and
constituted platform for education and training, social welfare as well as other socioeconomic problems associated with poverty.
2.1.2 Concept of Cooperative Societies
Cooperatives societies are the first and foremost, voluntary business associations
formed by people of limited means through contribution of share capital that forms the
basis of sharing out the profits that accrue from the business or use as dictated by its
members, reasons why it has to be democratically manage by the members themselves.
ICA
(International
Cooperatives
Alliance)
defined cooperatives 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.
Cooperative is a group-based and member-owned business that can be formed for
economic and social development in any sector (Ohio Co-operative Development
Center, OCDC, 2017).The International Labour Organization (ILO)sees cooperative as an
association of person usually of limited means, who have voluntarily joined together to
achieve a common economics and through the formation of a democratically controlled
business organization, making equitable contribution to the capital required and accepting
fair share of the risks and benefits of the undertaking in which members actively participate.
Cooperative is a catalyst for local entrepreneurial growth; because it retains within
the communities in which they operate the capital that they mobilize themselves, as
well as surplus derived from outside transactions, both accumulating for further
entrepreneurial development. This opinion supports the view of Olaleye (2014) who sees
cooperative societies as a business voluntarily owned and controlled by its members
and operated for them and by them on a non-profit or cost basis.
13
Cooperative enterprises provide the members means whereby a significant proportion
of humanity is able to take into its own hands
the
tasks
employment, overcoming poverty and achieving social
an important means,
of
creating
productive
integration and continue to be
common to all are the co-operative values of self-help, self-
responsibility, democracy, equality, equity and solidarity.
According
to
Department
for
International
Development
(DFID)
(2015),
cooperatives have four main characteristics: first, they are formed by groups of people,
who have a specified need or problem. Secondly, the organization is formed freely by
members after contributing to its assets.
Thirdly, the organization formed, is governed
democratically in order to achieve desired objectives on equitable norms, and fourthly,
it is an independent enterprise promoted, owned and controlled by people who are
members to meet their needs. Although, the poor have very weak transferable assets or
lack of recognition for the assets they have i.e. they lack adequate welfare exactly where
the relative concept of cooperatives focuses.
2.1.3 Effects of Poverty in Nigeria
Despite government’s efforts in reducing poverty in Nigeria, the story always
seems gloomy (Abbas, 2018). For example Nigeria’s recent survey shows that 69% of its
population
(112,518,507
people)
lives
in
extreme poverty (National Bureau of
Statistics, 2017). The nation’s poverty situation however contradicts its government
continued purported 7% growth rate and its latest acclaimed position as the largest
economy in the African hemisphere.
Nigeria is also unsurprisingly ranked 6th and 7th as major oil producer and
supplier respectively in the globe (World Bank, 2015). However, despite its richness;
its human development indicators are not impressive as youth unemployment put at
38% placed the country with the highest record of youth unemployment in Africa
(Millennium Development Goal, 2016).
14
These contradictions in Nigeria’s richness according to Abbas (2018) may however
not be unconnected to the unfavorable political, social and economic environment in
Nigeria that are linked to the actions and inactions of the policy makers which the
Nigerian state as a policy matter must put right.
The poverty situation in Nigeria as earlier indicated is also further aggravated
by over population, lack of essential social amenities, political instability, poor
industrialization,
wrong
economic
policies,
political instability, bribery, corruption,
persistent insecurity across the country, absent or dilapidated infrastructure (UNDP,
2015). The poverty situation in the country thus continue to suffer its detrimental
effects as many forms of undesirable level of socio-economic well-being
people
creates
uncertainties,
of
its
fear, depression, dependency, and sometime even deaths
etc. Unfortunately, the poor may have little or no political power as they have little
or no influence to make significant
change
in
the
political
system
hence
developing political apathy. They also may not have the capacity to provide adequate
education for themselves or for
their
children
thus
leading
to
perpetual
and
Poverty alleviation refers to deliberate policies or strategies
instituted
by
tackling
the
generational poverty.
2.1.4 Poverty Alleviation
governments
and
non-governmental
organizations
aimed
at
problems associated with poverty situation. In other words, it means deliberately
designed policies and actions either by individuals, groups, communities, national
governments or international bodies aimed at reducing the misery, hardship and suffering
of people in a given place at a particular time.
From the stand point of this understanding, poverty alleviation at any given
time should hinge on the provision of essential social amenities such as education,
sanitation, affordable housing, accessible health care services, clean and potable water
15
supply etc. and achievements of economic service such as loans, skill straining, and
agricultural inputs.
In the case of Nigeria, several poverty alleviation policies were designed,
initiated and implemented over time with the hope to improve living standard of its
citizens. Some of the past programmes for instance includes:
National
Empowerment and Development
Alleviation Programme
Strategy (NEEDS),
Poverty
Economic
(PAP), National Poverty Eradication Programme (NAPEP), National Agricultural Land
Development Authority (NALDA), Directorate of Food, Road and Rural
Infrastructures
(DFRRI), National Directorate of Employment (NDE), Family Support Programme
(FSP), Family
Economic
Advancement Programme (FEAP), Better Life Programme
(BLP), Peoples Bank and Community Banks initiatives, Green Revolution (GR), and
Operation Feed the Nation (OFN) etc. (Ugoh & Ukpere, 2019).
The problem of poverty alleviation in Nigeria by successive governments therefore
becomes more complicated such that, personal interest rather than national interest usually
affect the way policies are made and implemented (Abbas, 2018). This becomes unfortunate
for the poor persons who remain victims of such circumstances. Unfortunately, responsible
individuals who are to outline the policy problem to be tackled, usually exert their persona
interest above public interest hereby undermining the whole poverty alleviation process.
This predicament thus shows that government’s poverty alleviation efforts did not
yield expected results as most of the decisions were not derived from rational choices.
These
historical
lessons
have
also
led
to recognition in Nigeria that poverty
alleviation should not be a matter of government alone but high priority should also be
given to efforts made by non-governmental organizations like the cooperative societies.
16
2.1.5 Cooperatives Loans and Capital Formation
Cooperative loans are the most critical aspect of cooperatives benefit and activities.
There are a number of previous studies that have commented on this; Tsekpo, (2017)
emphasized that cooperative societies enhances capital formation which go a long way
in expanding the investment profile of its members, including the acquisition of
property for future gain, educational support for their children which is seen as an investment
in intellectual capital with the hope that the child will be gainfully employed and it will
transform to future gain for him, creation of capital goods or goods capable of
producing other goods.
Saving habits are encouraged tremendously which ultimately put the members in
better position to tackle avoidable emergencies. Wanyama, Develtere & Pollet (2018) also
posited that Cooperatives is increasingly becoming a major source of productive resources
that are made available to their members for a variety of uses; the most common is
the income-generation opportunities make possible due to growing abilities of these
cooperatives to mobilize substantial savings from which members can borrow. For
instance, it is observed that major part of the cooperative loans taken by members in Lagos
State Polytechnic Cooperative Societies are used
to support informal businesses they
established in other to supplement their wage and salary.
Cooperatives loan comes in various form to members of a society. It can be in form
of major capital given based on the level of contribution, which are majorly
substantial enough and it can also be emergency or soft loan that are taken to take care of
contingencies as quick as possible, soft loan is not as substantial as the major capital
loans. Chaitra (2016) observed that, this major reason contributed to the growth of
some types of cooperative societies peculiar to various sector of the economy for
instance, Thrift, savings and loan cooperative societies among the working class
within the economy so that what can’t be achieved individually can as well be achieved
17
collectively. The loans collected are used to undertake various project that enhance assets
acquisition, increased their access to major items that may not ordinarily be access if
not cooperatives.
It also goes a long way to strengthening the domain of transferability i.e
transferring out the assets to command the welfare needed (Bharadwaj 2015). Oseni,
Ogunniyi and Sanni (2019) also posited that the paramount reasons to members of
cooperatives are the access to cheap loans for acquisition of assets and saving for the
raining day.
2.1.6 Employment Impact of Cooperative Societies
Various
authors
have
submitted
on
the
major
employment
impacts
of
cooperatives societies both in developed, developing and under-developed nations of
the world. Wanyama et.al (2018) opined that Cooperative societies create employment
opportunities in major three ways starting from the view of the personnel directly
employed to run the ventures of different levels of the societies and the various government
and non-governmental agencies providing support services to the cooperatives e.g ministries,
departments and cooperatives college, to the offer of self-employment it gives to
members
whose
participation
in
economic activities substantially guarantees decent
income, as well as indirect employment base on
the spillover effect of cooperatives
activities on non-members whose income come only from the transactional relationship
with the cooperative ventures.
Of all the three stated, direct wage employment presents the least contribution
to employment generation even though data have shown the substantial numbers of
people are directly been engaged at various government and non-governmental
agencies. (Lagos State Ministry of Agriculture and Cooperative,
2014).
Thuvachote
(2017) also posited that cooperative societies create and maintaining employment
in rural and urban areas, employment opportunities are created as a production
18
enterprise that directly employed their personnel and as service provider that indirectly
generated employment to their members. This exclude the season labor who are engaged
specially to undertake specific tasks like working in the mills, block industry e.t.c.
cooperatives facilitate employment through members’ owned enterprises contributing
substantially to the country gross domestic product.
2.1.7 Social Protection Values of Cooperative Societies
With social protection, we mean societal security mechanisms that can respond
to unexpected socio-economic scarcity and major risks that people normally encountered
in their livelihoods. Post-colonial African countries relied mostly on mutual aid in
securing individual from misfortune or calamity that are sometimes beyond what
individual can control or handle.
A cooperatives society possesses potentials to contribute to poverty reduction in
rural areas which will generate confidence in rural community. With cooperative, income,
social status and capacity of the household will increases and all the benefit in form of
services, access or cash are converted to welfare generation.
Bouman (2015) posited that the mutual aids can be expressed to include,
helping families, kin and villager, to ease the burden and lessen the shock of death that might
visit manhood by meeting the expenses of funerals, wedding and other social activities. On
the other hand, corruption and the institutional weaknesses of the African state
hindered
the establishment of organized and state-run social protection systems catering
for the society, in this situation, it is only the fewer wealthy individual that actually
benefited in the social protection system privately provided by the insurance companies
leaving the less or the poor to savage their own course and provide for themselves
which have quite exposed the poor to vagaries of unexpected calamities that can
derail livelihood.
19
The emergences of cooperative societies have acted as networks of securing
individuals or members from all these unanticipated
circumstances.
Cooperatives also
offer emergency and instant loan to members to solve unexpected problems which
have actually been acting as fall back for members to quickly respond to
unanticipated socio-economic problems like sickness, an accident, food shortage, crop
failure, financial snag among others which have the potential of disrupting livelihood.
Furthermore, some cooperative societies make provisions for social fund
from their annual contributions to provide for communal needs as well as some basic social
services needed within the community were they operate. Provisions for food security is
one of the fundamental social protection roles of most cooperative societies with the
broader objectives of fighting ignorance and poverty with the package of services such as
training, inputs needed by members, financial lifeline, marketing opportunities for their
outputs.
Each element mentioned met a specific need but the synergy between all of
them goes a long way to promote development and improve members living
conditions. Cooperatives also safeguard the jobs of the members most especially where
trade union provide the foundation for the movement e.g Taxis drivers or Cab operators
cooperative societies always assist the members in the provision of some necessities
required for smooth running of their business with a view of collectively secure their
job by combating unemployment, fighting ignorance and strengthening the unity of
members.
In all these ways, cooperative societies
have
increasingly protecting their
members from all avoidable calamities that usually disrupt human hood.
2.1.8 Challenges of Cooperative Societies in Nigeria
In most part of the world, cooperative societies remain in fluxes which are majorly
faced with one or more problems ranging from the crises of ideology, capital formation,
problems of acceptability and credibility as well as crises of management (Taimni,
20
2017). Five major challenges of cooperative societies have also be identified by
Cheney (2015) to includes cultural transformation, competition and expansion, wage
solidarity, centralization and reorganization, and policies and programmes of increasing
productivity and participation.
While on the other hand Groves (2015) emphases that the major problems of
cooperatives are how to strike a balance between efficiency and democracy as the major
part of co-operative business. i.e imbibing good business practices and the social purpose of
a community of people, making it an organizations with a human face and therefore
difficult to manage.
Laidlaw (2014) emphasis that whenever cooperatives tend to strive for efficiency they
try to imitate other businesses but in the pursue of social functions they possess the
features that differentiate them from other organizations which make it a very difficult
business to manage. Education makes people easy to lead and govern but difficult to drive
and enslave, educating cooperatives members in this post-colonial African countries like
Nigeria is always a challenge to the organizations and the governments.
Even cooperatives choice of business suitable for it purpose have become a
fundamental challenges to the survival of the organizations. Cooperative societies also
suffers from internal handicap of its own making because of the social, voluntary and
democratic nature of it business which handicapped them from imposing strict measures
and disciplines on themselves and prefer to act on common consent. Other major challenges
also include;
i.
Inadequate financing
ii.
Mismanagement of resources by the management committee (board of directors)
iii.
Unqualified/inexperienced management committee.
iv.
Uncommitted membership.
v.
Lack of clear policy guideline on cooperatives management.
21
vi.
Outdated/inherited colonial cooperative law that deters cooperative autonomy.
vii.
Government altitude towards cooperative development.
viii.
Lack of infrastructural facilities like regular and stable electricity, accessible roads,
pipe borne water.
In
other
to
tackle
the above mentioned
challenges,
cooperatives should
increasingly focus on directly enhancing socio-economic conditions of their members by
engaging in value-added operations, i.e activities that have significant impact on the
wellbeing of members and also encourage participations through improved services and
adhere strictly to the principles of openness, honesty, prudency and caring for the
environments as well as the community.
Cooperatives should make optimum use of the available resources, enhance efficiency
while providing quality services to its members using the most acceptable and friendly
approaches to mobilize fund or capital and develop a fundamental measures for it
redistribution among the needy members.
2.1.9 Relationship between Cooperative Societies, Poverty Reduction and Economic
Development
In other to reduce poverty levels in most developing nations over the years, various
schools of thought have advocated a number of measures starting from the era of
mercantilists with emphasis on foreign trade as a vehicle for economic growth and poverty
reduction, to pro-poor growth approach, forced-drift theory, classical economists theory lead
by Adams Smith up to basic needs and entitlement approaches as well as community selfhelp, good governance and human right approaches of 1980s to 2000s.
In Nigeria, governments at different levels and various other agencies of
concern have adopted various strategies at one point or the other so as to reduce this
menace and enhance
sustainable
national development
22
without
much result
which
necessitated them to look for a more community base approach as cooperative societies
that can tackle all dimensions of poverty.
Findings from previous authors base on their research studies have also showed
that cooperatives is a viable mechanism that can ameliorate the effect of this socioeconomic vices called poverty in most African counties and beyond. Oseni, Ogunniyi &
Sanni (2017) exalted that, although members might join cooperative for various reasons but
the major desire is to get cheap loans and capital that can be invested in the acquisition of
fixed assets as savings for the rainy day.
Karlyle (2015) also concluded that a well-developed cooperative model of
economy with ranges of potentials can offers required direction for humanity and the
challenges of natural, economic and community integration could well be mastered. This
will go a long way in engaging ourselves in building a long lasting, endurable attainable
future for our children and grandchildren that made up the society at large.
Ihenacho, Chikaire, Ejiogu- Okereke, Oguegbuchulam, Osuagwu and Obi (2017) also
concluded in their studies that; job creation, facilitation of financial services, educational
support, labor exchange as well as mutual aids are the fundamental
poverty reduction
and sustainable national development strategies of major cooperative societies in most
African countries like Nigeria and therefore encourage the promotion of cooperative
activities vigorously.
The need to expand educational services in all aspect of cooperative management
and the desire to protect the investment of the citizenry couple with it relevance’s to
socio-economic development of the state prompted Lagos State government to
established cooperative college in Agege area of the state to cater and provide a short
–duration capacity building intervention to officials of cooperative societies in the state
metropolis (Lagos State Ministry of Agriculture and Cooperative, 2017).
23
Dogarawa (2015) also posited that for cooperative societies to leave up to its
expectation of viability and sustainability it must be run on two inter-related goals,
such as economic viability and innovative enterprise so as to be effective in poverty
reduction. While Adekunle and
Henson
(2017)
were
also
of
the
opinion
that
entrepreneurial alertness is imbibe in the consciousness of members as soon as they
become members which go a long way to give social protection to the members.
Nweze and Onuoha (2013) also emphasis in their studies that government should be less
hostile to cooperatives but supportive to its operation by eliminating operational policies that
might be inimical to the operation in order to emphasis poverty reduction.
2.2
Theoretical Framework
2.2.1 The Collective Action Theory
The Collective Action theory was propounded by Mancur Olson in 1965. According
to Uzonwane (2015), the theory states that “individuals under certain institutional
arrangements and shared norms are capable of organizing and sustaining cooperation that
advances the common interest of the group in which they belong.” This means that
individuals can organize and govern themselves to attain benefits which may not be
individualized but which benefit the entire group. The theory is applied widely to groups,
organizations, agencies, as well as community action. Olson saw collective action as a
voluntary action taken by a group to achieve perceived common needs of members which
help in reducing the challenges of the group. According to Uzonwane (2015), such collective
action has a lot of positive impact on the society, for instance, by bridging the gap created by
poverty inequalities and improving the livelihood of marginalized and vulnerable group such
as the elderly and widowed.
Although the collective action theory is lauded, it has some weaknesses. The
proponent in his model of the ‘rational’ individual suggests that where individuals believe
that they can enjoy the benefits of cooperation without contributing to the costs, they will
24
free-ride and leave the cooperation to others. This implies the corrupt nature of human beings
which impacts negatively on organizations. However, it is argued that individuals are always
motivated to act collectively by their emotions/passion for a cause. In this perspective,
Olson’s definition of rationality is considered to be too narrow. In spite of this shortcoming,
cooperative societies being organizations formed by collective action voluntarily and
democratically controlled by individuals to pursue common benefits which cannot otherwise
be effectively achieved individually.
2.2.2 Functionalism Theory
Functionalism explains society through a comparison with living organisms. It
comprehends society as a social system in analogy with a living organism. This is why
functionalism is also known as organismic model of society. It draws inspiration from the
biological sciences and assumes popularity through the works of Talcott Parson even though
variants have since emerged (Akanle & Olutayo, 2013).
Functionalism falls into the category of macro theories that give grand and large scale
explanations of social phenomena (Akanle & Olutayo, 2013; Otite & Ogionwo, 2016). For
Functionalism, every society functions as a systems and a living organism. For the society to
function optimally all aspects of the society, like living organisms’ organs, must function
healthily and effectively otherwise the society will disintegrate just as living organism will
die if any part/organ is sick without adequate cure.
A malfunctioning society is a sign that at least an organ is socially sick and deficient
and this must be socially re-engineered for social restoration to save the society from
imminent collapse. Functionalists, in a way, thus stress the significance and importance of
structure as well as function. Society functions as a structure and every institution functions
to preserve the whole. All institutions, values, norms and agencies existing in society owe
their existence to the fact that they still serve useful purposes in maintaining the survival of
society. Hence, the traditional social institutions; the family, education, economy, political,
25
and religion, for instance and particularly, work together to form and maintain the structure of
the society.
Continuous existence of anyone and everything signals importance and function and
deficiency in any will affect the whole. In the order of functionalism, the Nigeria society
performs less than expected and this is traceable to the deficiencies in the social institutions.
Weak institutional performances account for the underdevelopment of the nation. This has
led to the resonance and emergence of cooperative societies which are becoming popular in
that they are serving important purposes and filling gaps in meeting the development;
empowerment, protection, survival, poverty alleviation and cultural pattern maintenance
needs of their contexts. The functionalities of cooperative societies justifies their continuous
existence and they perform important stabilizing functions of the Nigerian and global social
structures for order in the face of imminent collapse occasioned by traditional institutional
failures.
2.2.3 Social Capital Theory
Social Capital Theory explains the importance of social and kinship networks and
primordial bonds in determining and giving forms to livelihood outcomes. The creative and
socio-economic importance of these networks and bonds lead to their codification as capital
because they have even more functionality than mere economic capital yet they are not
particularly used as practical and pure medium of exchange. Social capital however drives
and given forms even to economic capital. Social capital determines the nature and
significance of economic capitals and determines consequences of economic capital actions.
Social capital drives efficacious actions across social institutions beyond mere economic
rationality to combine even economic rationality with socio-cultural and affective actions for
group and society actors. Social capital building and deployment within precarious socioeconomic environments for livelihood improvements actually led to emergence and increase
in cooperative actions and societies.
26
As already shown above, social capitals exist in traditional African societies and are
only codified in cooperatives as rational action deployment in hostile neo-liberal capitalistic
socio-economic systems like in Nigeria and traditional yet modernizing Ibadan Metropolis.
Members of cooperative societies desire more than mere economic loans or funds to finance
businesses. They also seek platforms for establishing and building social capital. This social
capital is deployed as soon as needed and is constantly re-assessed. While cooperatives are
used as means of improving and increasing livelihood, life chances and empowerment
strategies, it is the collective works as social enterprises for inclusive economic gains that are
more important within the social capital framework.
2.2.4 Financial Intermediation Theory
The financial intermediation theory was developed by Leland and Pyle (1977). The
theory emphasized the roles of the financial intermediaries in the financial systems. They
recognized that the financial intermediaries can be categorized by four criteria that are:
categories of liabilities (deposits) which are specified for a fixed sum which is not related to
the performance of a portfolio, short-term deposits, and a high proportion of their liabilities
are chequeable and liabilities and assets which are not transferable. The theory establishes
that the contribution of intermediaries is to ensure a steady flow of funds from the surplus
units to the deficit units.
Financial intermediation theory provides a useful framework for understanding the
relationship between cooperative societies' savings, investments, and financial deepening.
According to this theory, financial intermediaries, such as cooperative societies, play a
critical role in mobilizing savings from surplus units and channelling them into productive
investments (Abifarin & Bello, 2015). Cooperative societies, through their savings and
investments, act as intermediaries between savers and borrowers within their members'
communities.
27
The theory suggests that cooperative societies' savings contribute to financial
deepening by increasing the availability of investable funds (Dogarawa, 2015). The
accumulated savings enable cooperative societies to provide loans and credit to members who
may have limited access to formal financial institutions. By mobilizing savings and
channelling them into productive investments, cooperative societies support economic
activities, stimulate entrepreneurship, and contribute to the overall development of the
financial system. Additionally, cooperative societies' investments can further deepen the
financial system by generating returns and expanding the range of financial services available
to members. Investments in income-generating projects, cooperative enterprises, or financial
instruments can enhance the financial sustainability of cooperative societies, thereby
facilitating their ability to provide more comprehensive financial services and support
economic growth (Adewole, Omotayo and Ojewande, 2022). The theory is essential in the
study for it emphasizes the functions of the financial intermediaries in mobilizing,
channelling and pooling savings and increasing investment levels in the economy, thus
improving their efficiency and expanding their functions contributes immensely to the growth
of the economy
2.3
Empirical Studies
Adewole, Omotayo and Ojewande (2022) investigated the relationship between
cooperative societies and financial intermediation efficiency in Ife East local government,
Osun State, Nigeria. The broad objective of this study is to examine the extent to which
cooperative societies in Ife East Local Government achieved their financial intermediation
role. The specific objectives are to examine the relationship between the total deposit and
total credit of the Munislam Welfare Fund cooperative society and to investigate the
relationship between the total deposit and the total credit of the Al-Irshad welfare fund
cooperative society. The study used the regression analysis method to achieve the stated
objective. The data for this study was obtained from the annual financial report of the
28
selected cooperative societies in Ife East Local Government, Osun state, Nigeria. It was
revealed in Credit supply equation I that there was a positive correlation and significant
relationship between the total deposit and total credit of the Munislam Welfare Fund
cooperative society. It was also discovered in Credit supply equation II that there was a
positive correlation and significant relationship between the total deposit and total credit of
the Al-Irshad welfare fund cooperative society. The study recommends that Cooperative
Societies should foster a higher level of liquidity to increase their ability to grant loans and
advances to their members for productive purposes. The study also recommends that
Cooperative societies should effectively utilize mobilized deposits to ensure the efficiency of
financial intermediation.
Abdulrazaq (2021) explored the determinants of savings mobilization in interest-free
cooperatives in Ilorin Kwara State. Data were collected with the use of a questionnaire which
was administered to 365 members of institution-based interest-free cooperative societies in
the Ilorin metropolis. Kaiser-Meyer-Olkin (KMO) and Cronbach’s alpha tests were
performed to establish the validity and reliability of the research instrument. Logistic
regression analysis was conducted and it was found that mode of saving, credit
administration, internal governance and member awareness have positive effects on the
volume of savings mobilized and the effects are significant at 5% and 1% levels of
significance. The study concluded that the mode of savings, credit administration, internal
governance, and members’ awareness affect the resource mobilization of Islamic
cooperatives in the Ilorin metropolis. Direct deduction of savings from salaries, a higher level
of transparency and accountability, and sensitization campaigns are recommended for
effective and efficient financial resource mobilization in interest-free cooperative societies.
The study has done well by using logistic regression analysis for the study since the study is a
survey analysis. Logistic regression allows the study to find the probability of event success
29
and event failure. In this case, the probability of event success and event failure of savings
mobilization in an interest-free cooperative in Ilorin Kwara State.
Ajayi (2022) investigated the barriers that hinder cooperative societies' involvement in
housing delivery in Osogbo and Olorunda local government areas of Osogbo, Osun State,
Nigeria. The study used a quantitative research design, with a questionnaire survey. Using the
multi-stage sampling technique, 110 cooperative societies were selected across the local
government areas and the structured questionnaire was administered to one member of each
selected cooperative society. Data collected were analysed using descriptive statistics
(frequency table) and Principal Component Analysis (PCA). Results of the communality
values based on PCA showed that financial and land regulation, loan management, and
credibility of co-operators are the factors affecting the ability of cooperative societies in
funding housing development in Osogbo. The study concluded that cooperative societies
have a significant impact on housing delivery in Osogbo.
These findings were in conformity with Naswem, et al. (2019) who worked on “The
role of cooperative societies in marketing of agricultural produce in Ushongo Local
Government Area of Benue state, Nigeria and found that cooperative societies in the study
area perform many functions. These roles include, creating a forum for farmers to bargain for
better prices for their farm produce, regulating prices of farm produce by offering related
marketing functions, educating farmers on best production practices and marketing
information, helping members procure farm inputs timely and at low cost, as well as creating
jobs and mobilizing farmers resources to generate more income.
Attah, (2018) worked on prospects of cooperative society and sustainable agriculture
in Benue State and found that cooperative societies help farmers in areas of information
needs, income generation, and enhancement of agricultural productivity and increased access
to credit facilities. This implies that farmers in Benue State benefit from cooperative societies
30
immensely as they are empowered economically and socially. Poverty among crop farms can
be alleviated through these numerous roles played by cooperatives in Benue State.
Also, Elem (2018) investigated the role of cooperative societies in ending poverty and
hunger in Nigeria with focus on women rice farmers’ cooperative societies and found that
women rice farmers cooperative societies have proven to be the best tool for poverty
alleviation in rural areas because members were able to afford to train their children in
schools, provide shelters for themselves and members of their family; as well as take care of
the health needs of their relations, feed them adequately and also create job opportunities for
both members and non-members.
In the study conducted by Anigbogu, (2016) on “Performance assessment of farmers
multipurpose cooperative societies (FMCS) in marketing of members’ farm produce in Benue
state, Nigeria,” 306 respondents were drawn from 80 farmers’ multipurpose cooperative
societies across two agricultural zones in the state. The study revealed that cooperative
societies perform several roles such as marketing of farm produce for members, as well as
enhancing social inclusion of members, mobilizing capital to provide loan facilities and farm
inputs at subsidized rates; assisting members in storage and processing of their farm produce.
Dogarawa (2015) examined the role of cooperative societies in economic
development. The aim was to investigate how cooperatives can act as agents towards
sustainable community development. The study was carried out using a descriptive survey,
which involves the collection of data to describe the role of cooperative societies in economic
development. The paper posits that for over 160 years now cooperatives have been an
effective way for people to exert control over their economic livelihoods as they play an
increasingly important role in facilitating job creation, economic growth and social
development. The study concludes that to be effective and successful, cooperatives must
continuously achieve two interrelated goals: enhance the viability and improve the ability to
31
service its members; and remain an economically viable, innovative and competitive
enterprise.
Gomina (2015) corroborated these findings in his study of impact analysis of savings
and credit cooperative societies in combating poverty among crop farmers in three Local
Government Areas in Niger state, Nigeria found that cooperatives assist crop farmers to
procure farm inputs at low cost and also get loans at low rates.
Dogarawa (2015) established the role of cooperative societies in economic
development. The aim was to investigate how cooperatives can act as agents towards
sustainable community development. The study was a descriptive survey, which involves the
collection of data to describe the role of cooperative societies in economic development. The
study concluded that for over 160 years now cooperatives have been an effective way for
people to exert control over their economic livelihoods as they play an increasingly important
role in facilitating job creation, economic growth and social development. The study
recommended that to be effective and successful, cooperatives must continuously achieve
two interrelated goals: enhance the viability and improve their ability to service their
members; and remain an economically viable, innovative and competitive enterprise.
The functions highlighted above were confirmed by Uzouwanne (2015) that
cooperatives are formed to achieve basic objectives which include providing goods and
services at low cost; expunging the middlemen in the marketing chain, protecting the rights
of poor small scale farmers, protecting the rights of producers and consumers; and sensitizing
and educating members of cooperatives. It is therefore pertinent to appraise some key roles
performed by cooperative societies in relation to poverty alleviation among crop farmers as
presented below.
This position was supported by Yamusa and Adefila (2014) that cooperative societies
empower disadvantaged smallholder farmers financially and technically to enhance their
productivity. Ibitoye (2012) also made an assessment of the performance of agricultural
32
cooperatives in Kogi State, Nigeria and found that cooperative societies play various roles of
assisting farmers to save, procure farm inputs, obtain loans, process crops and provide storage
services.
As observed by Ibitoye (2012), by uniting the people and assisting them to identify
their needs and mobilize their resources, cooperative societies are viable alternatives for
reducing hardships among small scale subsistent farmers.
Ebonyi and Jimoh (2012) noted that although small scale farmers are financially
constrained because they lack the collateral often demanded by financial institutions to
procure loans, cooperative societies are able to pool resources to give loans as well as provide
inputs to farmers at affordable rates. Cooperatives therefore provide a soft landing platform
for their members to obtain loans and other services not easily obtainable elsewhere. Through
this process the exploitation of the poor small scale farmers in society is prevented.
Similarly, Ikwuba (2011) conducted a study on rural people oriented poverty coping
strategy in Benue state and found that cooperative societies play important roles such as
giving credits/loans, training of members in technical skills acquisition and enhancement of
social inclusion of their members.
33
CHAPTER THREE
3.0
RESEARCH METHODOLOGY
3.1
Research Design
The research design used in this study is survey research method. This survey
research method is the descriptive method in educational research. The researcher used this
descriptive research design to obtain the actual information on the role of co-operative
societies on poverty alleviation.
3.2
Population of the Study
The target populations of the study are cooperative members within Abeokuta South
local government Area of Ogun State, which was used for the investigation. The populations
of the study used are one hundred (100) co-operatives members from five co-operative
societies which were randomly selected from the study under investigation.
3.3
Sample and Sampling Technique
The sample size comprises of one hundred (100) respondents from the target co-
operative societies. The sampling technique used is random sampling technique in the
selection of the respondents for the study under investigation.
3.4
Instrument for Data Collection
The questionnaire was the instrument for the research study which is design only for
the members of the target co-operative societies (Feyintoluwa Co-operative Society,
Ifewunmi Co-operative Society, Ifelodun Cooperative Society, Oke-Ijemo Co-Operative
Thrift and Credit Society and Ifelosowapo Co-Operative Thrift and Credit Society). The
questionnaire will be prepared by the researcher to suit the research question before
administering the questionnaire.
The questionnaire contain two sections; section A and B. Section A of the instrument
is all about bio-data of each of the respondents and Section B consist of twenty (20) items
34
which the respondents intend to answer, Strongly Agree, Agree, Disagree and
Strongly Disagree.
3.5
Validity of the Instrument
The questionnaire for this study was developed by the researcher. The instrument
faces content validation by the supervisor and other researcher. After undergoing series of
correction by the supervisor by adding relevant information to the questionnaire, it was
perfectly good to be administered to the respondents in the target local government area of
Ogun State.
3.6
Reliability of Instrument
The test re-test method was used to test how valid the research instrument is. Twenty
(20) respondents will be randomly selected and questionnaire was administered to them. The
questionnaire were located and tested, to show that the research instrument is reliable.
3.7
Method of Data Collection
The instrument used in the study was the questionnaire. It was personally
administered by the researcher to the target respondents selected from the study. The
administration of the questionnaire took more than two weeks. At the end of each visitation
of each of the co-operative society, the researcher collected the answered questionnaire and
analyzed and interpreted the data collected.
3.8
Method of Data Analysis
Statistical technique used for the analysis of data collected from the respondents was
the simple percentage, means, median and standard deviations.
35
CHAPTER FOUR
4.0
RESULT AND DATA ANALYSIS
This chapter analyzes the data collected during the course of research. Simple
percentage and frequency counts were used in analyzing the responses of section A and
section B of the questionnaire.
The analysis of the respondents is represented below:
4.1
Demographic Information
Table 1
Analysis of the Respondents based on Gender.
OPTIONS
FREQUENCY (F) PERCENTAGE (%)
Male
53
53
Female
47
47
Total
100
100
Table 1 reveals that 100 respondents participated in the study in which 53 (53%) were male,
while 47 (47%) were female, thus we have more male respondents than female respondents.
Table 4.2:
Analysis of the Respondents based on Age.
Age
Frequency
Percentage (%)
Under 25 years
9
9
26-29 years
26
26
30-39 years
40
40
40-49 years
25
25
100
100
Total
Table above shows that, 9 respondents representing (9%) were between age of Under
25years, 26 of respondents representing (26%) were between age of 26-29years, 40 of
respondents representing (40%) were between age of 30-39years, while 25 of respondents
representing (25%) were between age of 40-49years.
36
4.2
Analysis of Data
Hypothesis 1: Cooperative society does not play significant roles in poverty alleviation in
Ogun State.
Research Question 1:
What are the roles cooperative society plays in poverty
alleviation in Ogun State?
Table 4.3
S/N
ITEMS
1.
Cooperative societies have been effective
in fostering a sense of community and
solidarity, leading to collective efforts that
empower members economically and
contribute to poverty reduction.
Cooperative societies play a crucial role in
promoting entrepreneurship by offering
training, guidance, and resources to
members, thereby aiding in poverty
alleviation.
Cooperative societies contribute to
improved agricultural practices and
productivity, enhancing the income levels
of members and positively impacting
poverty reduction.
Cooperative societies serve as platforms
for skill development and capacity
building, enabling members to engage in
various economic activities and ultimately
alleviate poverty.
Cooperative societies facilitate access to
markets and fair trade practices, ensuring
that members receive fair returns for their
products or services.
2.
3.
4.
5.
AGREED
DISAGREED
Mean
Freq Percent Freq Percent
(ϰ)
(N)
%
(N)
%
S.D
93
93.0
7
7.0
3.15
1.016
87
87.0
13
13.0
3.45
0.807
83
83.0
17
17.0
3.41
1.013
72
72.0
28
28.0
3.49
0.868
79
79.0
21
21.0
3.48
0.820
Weighted Mean (ϰ) = 3.395 and STD = 0.905
Table 4.3 above, indicated that cooperative societies have been effective in fostering a sense
of community and solidarity, leading to collective efforts that empower members
economically and contribute to poverty reduction (ᵡ = 3.15, SD = 1.016), cooperative
societies play a crucial role in promoting entrepreneurship by offering training, guidance, and
resources to members, thereby aiding in poverty alleviation (ᵡ = 3.45, SD = 0.807),
cooperative societies contribute to improved agricultural practices and productivity,
37
enhancing the income levels of members and positively impacting poverty reduction (ᵡ =
3.41, SD = 1.013), cooperative societies serve as platforms for skill development and
capacity building, enabling members to engage in various economic activities and ultimately
alleviate poverty (ᵡ = 3.49, SD = 0.868) and cooperative societies facilitate access to markets
and fair trade practices, ensuring that members receive fair returns for their products or
services (ᵡ = 3.48, SD = 0.820). From table 4.4 above, hypothesis 1 has a weighted mean of
3.395 which is above the bench mark of 2.50. Summarily, it was shown that there are
cooperative society play significant roles in poverty alleviation in Ogun State.
Hypothesis 2: There are no identifiable problems that cooperative societies face in their
efforts to reduce poverty in Ogun State.
Research Question 2:
What are the problems faced by cooperative society in
reducing poverty in the state?
Table 4.4
S/N
6.
7.
8.
9.
10.
ITEMS
Inadequate access to financial resources
and credit facilities is a major problem
faced by cooperative societies in
effectively reducing poverty.
Limited awareness and education
among cooperative members about
effective business practices and market
opportunities pose a significant
challenge to poverty reduction efforts.
Bureaucratic hurdles and regulatory
challenges hinder the operational
efficiency of cooperative societies.
Insufficient
infrastructure
and
technological limitations impede the
growth and productivity of cooperative
societies.
Internal conflicts and lack of
cooperation among members pose a
significant obstacle to the success of
cooperative societies in addressing
poverty-related issues.
AGREED
DISAGREED
Mean
Freq Percent Freq Percent
(ϰ)
(N)
%
(N)
%
S.D
74
74.0
26
26.0
3.25
0.996
72
72.0
28
28.0
3.30
1.008
67
67.0
33
33.0
3.13
1.056
65
65.0
35
35.0
3.13
1.147
86
86.0
14
14.0
3.28
0.924
Weighted Mean (ϰ) = 3.215 and STD = 1.0261
38
Table 4.4 above, indicated inadequate access to financial resources and credit facilities is a
major problem faced by cooperative societies in effectively reducing poverty (ᵡ = 3.25, SD =
0.996), limited awareness and education among cooperative members about effective
business practices and market opportunities pose a significant challenge to poverty reduction
efforts (ᵡ = 3.30, SD = 1.008), bureaucratic hurdles and regulatory challenges hinder the
operational efficiency of cooperative societies (ᵡ = 3.13, SD = 1.056), insufficient
infrastructure and technological limitations impede the growth and productivity of
cooperative societies (ᵡ = 3.13, SD = 1.147) and internal conflicts and lack of cooperation
among members pose a significant obstacle to the success of cooperative societies in
addressing poverty-related issues (ᵡ = 3.28, SD = 0.924). From table 4.5 above, hypothesis 2
has a weighted mean of 3.215 which is above the bench mark of 2.50. Thus, it was shown
that there are identifiable problems that cooperative societies face in their efforts to reduce
poverty in Ogun State.
39
Hypothesis 3: Cooperative societies didn’t provide substantial benefits that contribute to
the economic development of their members in Ogun State.
Research Question 3:
What benefits do cooperative societies have in enhancing
the economic development of their members?
Table 4.5
S/N
11.
12.
13.
14.
15.
ITEMS
Cooperative societies provide access to
affordable credit and financial resources,
enabling members to invest in incomegenerating activities.
Cooperative societies play a crucial role in
facilitating
collective
bargaining
and
marketing, ensuring that members receive fair
prices for their products.
Cooperative societies offer training and
capacity-building opportunities, equipping
members with the skills and knowledge
needed for successful entrepreneurship and
economic advancement.
Cooperative societies enhance the purchasing
power of members through bulk buying and
collective sourcing, leading to cost savings
and improved economic stability for
individual members.
Cooperative societies provide a platform for
collaborative initiatives, encouraging members
to pool resources for joint ventures and largerscale economic projects.
AGREED
DISAGREED
Mean
Freq Percent Freq Percent
(ϰ)
(N)
%
(N)
%
S.D
85
85.0%
15
15.0%
3.15
1.016
82
82.0%
18
18.0%
3.43
0.954
82
82.0%
18
18.0%
3.43
0.954
75
75.0%
25
25.0%
3.11
1.058
62
62.0%
38
38.0%
3.30
1.008
Weighted Mean (ϰ) = 3.308 and STD = 0.971
Table 4.5 above, shows cooperative societies provide access to affordable credit and financial
resources, enabling members to invest in income-generating activities (ᵡ = 3.15, SD = 1.016),
cooperative societies play a crucial role in facilitating collective bargaining and marketing,
ensuring that members receive fair prices for their products (ᵡ = 3.43, SD = 0.954),
cooperative societies offer training and capacity-building opportunities, equipping members
with the skills and knowledge needed for successful entrepreneurship and economic
advancement (ᵡ = 3.56, SD = 0.819), cooperative societies enhance the purchasing power of
members through bulk buying and collective sourcing, leading to cost savings and improved
economic stability for individual members (ᵡ = 3.11, SD = 1.058) and cooperative societies
40
provide a platform for collaborative initiatives, encouraging members to pool resources for
joint ventures and larger-scale economic projects (ᵡ = 3.30, SD = 1.008). From table 4.6
above, hypothesis 3 has a weighted mean of 3.308 which is above the bench mark of 2.50. It
can be concluded that cooperative societies provide substantial benefits that contribute to the
economic development of their members in Ogun State.
Hypothesis 4: There is no significant positive relationship between the effectiveness of
cooperative societies and poverty alleviation as well as economic
development in Ogun State.
Research Question 4:
Does cooperative society have any significant relationship
with poverty alleviation and economic development in
Ogun State?
Table 4.6
S/N
16.
17.
18.
19.
20.
ITEMS
AGREED
DISAGREED
Mean
Freq Percent Freq Percent
(ϰ)
(N)
%
(N)
%
S.D
98
98.0%
2
2.0
3.20
1.078
88
88.0%
12
12.0
3.17
0.884
82
82.0%
18
18.0%
2.98
1.012
66
66.0%
34
34.0%
3.17
1.088
77
77.0%
13
13.0
3.22
1.079
Cooperative societies empower members
through
access
to
credit,
skill
development, and business opportunities.
Collaborative nature of cooperative
societies fosters economic growth by
pooling resources and facilitating joint
ventures that benefit members.
The presence of cooperative societies
creates
employment
opportunities,
enhancing productivity, and contributing
to overall economic development.
The collective bargaining power of
cooperative societies influences fair
market practices, ensuring that members
receive equitable returns for their products.
Cooperative model promotes inclusive
economic development by involving
members in decision-making processes,
fostering a sense of ownership, and
ensuring that benefits are distributed more
equitably.
Weighted Mean (ϰ) = 3.148 and STD = 1.0282
Table 4.6 above, shows that cooperative societies empower members through access to
credit, skill development, and business opportunities (ᵡ = 3.2, SD = 1.078), collaborative
41
nature of cooperative societies fosters economic growth by pooling resources and facilitating
joint ventures that benefit members (ᵡ = 3.17, SD = 0.884), presence of cooperative societies
creates employment opportunities, enhancing productivity, and contributing to overall
economic development (ᵡ = 2.98, SD = 1.012), collective bargaining power of cooperative
societies influences fair market practices, ensuring that members receive equitable returns for
their products (ᵡ = 3.17, SD = 1.088) and cooperative model promotes inclusive economic
development by involving members in decision-making processes, fostering a sense of
ownership, and ensuring that benefits are distributed more equitably (ᵡ = 3.22, SD = 1.079).
From table 4.7 above, hypothesis 4 has a weighted mean of 3.148 while the bench mark is
2.50. It can be concluded that there positive significant relationship between the effectiveness
of cooperative societies and poverty alleviation as well as economic development in Ogun
State.
42
CHAPTER FIVE
5.0
SUMMARY, CONCLUSION AND RECOMMENDATIONS
This study examined the cooperative societies as an instrument for poverty alleviation
and economic development in Ogun State.
5.1
Summary of Chapters
The chapter one introduces the topic i.e. the reason for the study, statement of the
problem (cooperative societies as an instrument for poverty alleviation and economic
development in Ogun State), others include; objective of the study, research questions,
hypothesis of the study, significance of the study, scope of the study, limitation of the study,
and definition of terms.
The chapter two (literature review) is made up of conceptual view, theoretical view
and empirical review. Some of the empirical studies are; Ajayi (2022) investigated the
barriers that hinder cooperative societies' involvement in housing delivery in Osogbo and
Olorunda local government areas of Osogbo, Osun State, Nigeria. The study used a
quantitative research design, with a questionnaire survey. Using the multi-stage sampling
technique, 110 cooperative societies were selected across the local government areas and the
structured questionnaire was administered to one member of each selected cooperative
society. Data collected were analysed using descriptive statistics (frequency table) and
Principal Component Analysis (PCA). Results of the communality values based on PCA
showed that financial and land regulation, loan management, and credibility of co-operators
are the factors affecting the ability of cooperative societies in funding housing development
in Osogbo. The study concluded that cooperative societies have a significant impact on
housing delivery in Osogbo.
Again, Naswem, et al. (2019) who worked on “The role of cooperative societies in
marketing of agricultural produce in Ushongo Local Government Area of Benue state,
Nigeria and found that cooperative societies in the study area perform many functions. These
43
roles include, creating a forum for farmers to bargain for better prices for their farm produce,
regulating prices of farm produce by offering related marketing functions, educating farmers
on best production practices and marketing information, helping members procure farm
inputs timely and at low cost, as well as creating jobs and mobilizing farmers resources to
generate more income.
The study adopted the collective action theory was propounded by Mancur Olson in
1965. According to Uzonwane (2015), the theory states that “individuals under certain
institutional arrangements and shared norms are capable of organizing and sustaining
cooperation that advances the common interest of the group in which they belong”. Also,
functionalism theory, functionalism explains society through a comparison with living
organisms. It comprehends society as a social system in analogy with a living organism. This
is why functionalism is also known as organismic model of society. It draws inspiration from
the biological sciences and assumes popularity through the works of Talcott Parson even
though variants have since emerged (Akanle & Olutayo, 2013).
. The chapter three discusses the methodology adopted which is descriptive survey
design and questionnaire was used to gather information from the respondent.
The chapter four includes the data analysis. It comprises of the presentation of data,
data analysis using simple percentage, mean, median and standard deviation.
5.2
Discussion of Findings
It is evidence that cooperatives society have significantly contributed to wealth
redistributions, poverty reductions and sustainable development from human livelihood
perspective. It is obvious that reduction of poverty is all about improving poor conditions and
generation of a sustainable command of welfare. It is proved that cooperative is community
business that can potentially support breaking down the vicious cycle of poverty.
Given that cooperatives is open to all persons without ethnic, class or professional
biases most especially rural settings offered employment opportunity for both members and
44
non-members alike. The incomes generated are used to meet household needs and also to
ensure income- generating capacity of individuals by investing in educational, health
requirement and socio well-being of individuals and household.
Cooperatives also offer emergency and instant loan to members to solve unexpected
problems which have actually been acting as fall back for members to quickly respond to
unanticipated socio-economic problems like sickness, an accident, food shortage, crop
failure, financial snag among others which have the potential of disrupting livelihood.
Cooperatives are therefore becoming the preferred mechanism or tools for mediating people
access to major resources that they usually utilized to participate in other activities through
which they earned a living.
5.3
Conclusion
Based on the findings it was evident that there has been steady increase in numbers
and memberships of cooperative societies over time. This development is achieved as
awareness that poverty alleviation is now considered as not only the responsibility of
government alone but even for cooperative societies. Importantly, the successful activities of
cooperative societies towards poverty alleviation have continued to serve as a means of
livelihood for its members.
The study also discovered that the activities of cooperative societies offer mutual
benefits to their members such as financial assistance, soft loans, training, skills acquisition,
job opportunity and self-reliance, etc. Majority of the respondents also opined that, the roles
being played by cooperative societies are successful towards alleviating poverty.
However, despite its success rate, there exist some challenges facing cooperative
societies towards alleviating poverty. Such major challenges include: poor or lack of soft
credit loan, proper training, proper skill, sufficient seed fund, and poor participation of people
in the activities of cooperative societies. Cooperatives are therefore becoming the preferred
mechanism or tools for mediating people access to major resources that they usually utilized
45
to participate in other activities through which they earned a living. It is based on this that
cooperative societies are contributing to poverty reduction and sustainable national
development.
5.4
Recommendations
Based on the result of this study, the researcher therefore recommended that;
i.
The strategies of cooperative societies should be consciously articulated to
realistically reflect proper skills and trainings of its members within specific needs
of such communities in which they are based or situated.
ii.
Social welfare programmes can be designed by Federal, State and Local
Governments through the provision of subsidies to poor persons especially on
food, education, housing, transport, etc. thereby enhancing their descent living.
iii.
People should be encouraged especially in poverty stricken areas to embark on
self-help programmes through the activities of cooperative societies. This can be
achieved through organisation of town hall meetings, workshops and seminars by
cooperative societies to disseminate information on practical benefits of forming
cooperative societies.
iv.
As cooperative societies represent democratic views, efforts should be made by
the groups to integrate opinions of their members through the adoption of bottomup approach to policy design and implementation thereby mobilizing all important
stakeholders to support its activities towards achieving its success and
sustainability.
46
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51
APPENDIX
FEDERAL COLLEGE OF EDUCATION
P.M.B 2096, ABEOKUTA, OGUN STATE
DEPARTMENT OF ECONOMICS
QUESTIONNAIRE
Dear Respondent,
I am a student in the above named department and college. I am carrying out a
research on topic title: “Cooperative societies as an instrument for poverty alleviation
and economic development in Ogun State”.
You are to respond to the statements with the best of your ability as all information
given in this questionnaire would be treated confidentially. Please indicate your response by
ticking (√) in the appropriate column.
SECTION A
PERSONAL DATA
Societal Name:
_____________________________
Gender:
Male [
Age:
Under 25 [
50-59 [
]
Female [
]
]
26-29 [
]
60 and Above [
]
30-39 [
]
40-49 [
]
]
SECTION B
Please kindly complete all parts of this questionnaire by getting a tick (√) against
the option that best describe your response.
S.A.
-
Strongly Agreed
A.
-
Agreed
D.
-
Disagreed
S.D
-
Strongly Disagreed
52
S/N
ITEMS
SA
RQ.1 What are the roles cooperative society plays in poverty alleviation in
Ogun State?
1
Cooperative societies have been effective in fostering a sense of
community and solidarity, leading to collective efforts that empower
members economically and contribute to poverty reduction.
2
Cooperative societies play a crucial role in promoting entrepreneurship by
offering training, guidance, and resources to members, thereby aiding in
poverty alleviation.
3
Cooperative societies contribute to improved agricultural practices and
productivity, enhancing the income levels of members and positively
impacting poverty reduction.
4
Cooperative societies serve as platforms for skill development and
capacity building, enabling members to engage in various economic
activities and ultimately alleviate poverty.
5
Cooperative societies facilitate access to markets and fair trade practices,
ensuring that members receive fair returns for their products or services.
RQ.2 What are the problems faced by cooperative society in reducing
poverty in the state?
6
Inadequate access to financial resources and credit facilities is a major
problem faced by cooperative societies in effectively reducing poverty.
7
Limited awareness and education among cooperative members about
effective business practices and market opportunities pose a significant
challenge to poverty reduction efforts.
8
Bureaucratic hurdles and regulatory challenges hinder the operational
efficiency of cooperative societies.
9
Insufficient infrastructure and technological limitations impede the growth
and productivity of cooperative societies.
10
Internal conflicts and lack of cooperation among members pose a
significant obstacle to the success of cooperative societies in addressing
poverty-related issues.
53
A
D
SD
RQ.3 What benefits do cooperative societies have in enhancing the economic
development of their members?
11
Cooperative societies provide access to affordable credit and financial
resources, enabling members to invest in income-generating activities.
12
Cooperative societies play a crucial role in facilitating collective
bargaining and marketing, ensuring that members receive fair prices for
their products.
13
Cooperative societies offer training and capacity-building opportunities,
equipping members with the skills and knowledge needed for successful
entrepreneurship and economic advancement.
14
Cooperative societies enhance the purchasing power of members through
bulk buying and collective sourcing, leading to cost savings and improved
economic stability for individual members.
15
Cooperative societies provide a platform for collaborative initiatives,
encouraging members to pool resources for joint ventures and larger-scale
economic projects.
RQ.4 Does cooperative society have any significant relationship with
poverty alleviation and economic development in Ogun State?
16
Cooperative societies empower members through access to credit, skill
development, and business opportunities.
17
Collaborative nature of cooperative societies fosters economic growth by
pooling resources and facilitating joint ventures that benefit members.
18
The presence of cooperative societies creates employment opportunities,
enhancing
productivity,
and
contributing
to
overall
economic
development.
19
The collective bargaining power of cooperative societies influences fair
market practices, ensuring that members receive equitable returns for their
products.
20
Cooperative model promotes inclusive economic development by
involving members in decision-making processes, fostering a sense of
ownership, and ensuring that benefits are distributed more equitably.
54