effect of cooperative societies on performances of micro enterprises
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effect of cooperative on micro enterprises' performancesTRANSCRIPT
CHAPTER ONE
1.0 INTRODUCTION
1.1 Small Scale Enterprise in Perspective
There is no universally accepted definition of Small-Scale Enterprises
(SSEs). Thus, SSEs tend to differ in definition among individuals in various
countries at different levels of economic development or even regional
differences in industrial development within the same country. In spite of the
above difficulty, basically SSEs have mainly been defined based on the level
of turnover, investment capital and the size of employees. According to
Central Bank of Nigeria (1979), small-scale enterprises are establishments
whose annual turnover does not exceed N500,000 in the same year, the
Federal Ministry of Industries in Nigeria defined SSEs as enterprises having
investment capital (investment in land, building, machinery and equipment
and working capital) of up to N60,000 and employing no more than 50
persons. This definition thus looks at SSEs on the basis of both investment
capital and number of employees. The Nigerian Bank for Commerce and
Industries (1982) also categorised enterprises investing in not more than
N500,000 excluding the cost of land as small-scale enterprises.
However, Steel and Webster (1992) and Gauthier (1996) define small-scale
enterprises on the basis of the number of workers. Enterprises that employ
between 4 and 29 employees irrespective of their capital investment are
considered SSEs. In the mid-1960s, a new approach to small to medium-
scale enterprise (SME) development began to emerger due to a number of
1
factors. First, there was growing concern over low employment elasticity of
modern, large-scale production. It was claimed that even with more optimal
policies, this for of industrial organisation was unable to absorb a significant
proportion of the rapidly expanding labour force (Chenery et al., 1974; ILO,
1973). Second, there was widespread recognition that the benefits of
economic growth were not being fairly distributed, and that the use of large-
scale, capital-intensive techniques was pertly to blame (Chenery et al.,
19740. Third, empirical diagnosis showed that the causes of poverty were
not confined to unemployment, and that most of the poor were employed in
a large variety of small-scale, low-productivity activities. Thus, it was thought
that one way to alleviate poverty could be to increase the productivity of
those engaged in small-scale production (Aftab and Rahim, 1989). This
suggested a new role for small industries, or what has come to be labelled
“the urban informal sector”. Small, labour-intensive industries were seen not
only to increase employment, but also to increase the living standards of the
poor. They were also thought to be capable of providing a new dynamic of
economic growth. The new objective was not just to stop the retreat, but to
promote the small-scale sector (Schmitz, 1982, Aftab and Rahim, 1989).
In fact, the importance of Small Scale Enterprises in economic development
cannot be over-emphasized. According to Aryeetey (2004), small scale
enterprises have a lot of contributions to make to the economy of Nigeria,
therefore their establishment and operation should be promoted. One way
by which this can be done is by conducting empirical research geared
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towards SSEs’ development. According to Daniels and Ngwira (1993), Small-
scale enterprises in Nigeria can bring about the following:
Provide managerial and technical training for the majority of unskilled
and semi-skilled workers engaged in SSEs
Promote effective domestic resources utilization
Reduction of rural-urban migration
Production of intermediate goods for use in large enterprises
According to Kayanula and Quartey (2000), SSEs also provide employment
opportunites for a large number of the population. Besides they can for the
foundation for the development of indigenous industries in Nigeria (Obasan,
2001). The dynamic role of small-scale enterprises in developing countries as
engines through which the growth objectives of such countries can be
achieved has long been recognized (Kayanula and Quartey, 2000). This is
because, during the early stages of economic development, SSEs helped to
create employment and wealth, particularly in low income countries
(Obasan, 2001).
1.2 Cooperative as a panacea to Small Scale Development
According to Weihe (2004), cooperatives are special purpose organizations
that have unique attributes compared to other forms of enterprise. They are
independent, member-owned and democratically governed businesses, created
with equity financed by members who invest in order to benefit through their
patronage. Cooperatives are built on a “collective identity and shared destiny.”
This characteristic is the underlying factor in the rise of cooperative networks in
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the face of national and/or regional conflict and hostile, monopolistic alien
enterprises and or middlemen/usurers.
Epetimehin (2006) described cooperative as a business owned and
controlled by the people who use its service. They finance and operate the
business or service for their mutual benefit. Roy (1964) saw cooperatives as
voluntary organisation established for the pursuance of economic, social and
political interest of members.
The International Labour organisation (ILO) on its studies and report series,
No. 57 of 1960 on cooperative management and administration viewed
cooperatives as an association of person usually of limited means, who have
voluntarily joined together to achieve a common economic end through the
formation of a democratically controlled business organisation, making
equitable contribution to the enterprise and accepting a fair share of the risk
and benefits of the undertaking. Onuoha (1986) averred that cooperatives
are business of patrons whose motive is to obtain the goods and services
they require at cost through their joint undertakings.
The International Cooperative Alliance (ICA) which is the world apex
body of cooperative movements at its centennial congress and General
Assembly in Manchester, 1995, gave the whole picture of a cooperative
organisation as a voluntary association of free and independent persons for
the betterment of their economic conditions.
In the word of Akinwumi (2006), cooperative method provides the best
alternative than all these economic grouping and schemes, suggesting that
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they needed to formalize in line with cooperative principles so that ling after
project interventions they can remain sustained. Invariably, cooperative
society remains the better alternative to economic reconstruction of the
government. Most of the Non-Cooperative Group (NCGs) often die in the
midway without fulfilling the economic objectives for their establishment.
By uniting small producers, cooperatives are unsurpassed in their capacity to achieve
economies of scale from the farm to market: economies in effective planning, scheduling,
transportation, storage and improved quality. Cooperatives offer immediate benefits even at modest
levels of organization through bringing coherence out of largely chaotic, disorganized individual
producers (Weihe, 2004).
1.3 PROBLEM STATEMENT
In Nigeria, finance has been recognized as an essential tool for promoting Small and Micro
Enterprises (SMEs). In a study conducted in 1976 by CBN, shortage of primary production credit
was identified as one of the major causes for declining production (Olaitan, 2006). Credit has
also been discovered to be a major constraint on the intensification of both large and small scale
businesses (Von-Priskieke, 1986). Several other studies also revealed that lack or insufficient
credit is the bane of production in Nigeria (Adebayo, and Adeola, 2008; Olaitan , 2006; Amao ,
2006; Adegeye and Ditto,1985; ).
To address the finance constraints facing business development in Nigeria, lots of programmes
were put in place by governments to solve the credit problems and alleviate poverty among the
populace.
Olaleye and Adekola (2006) observed that Federal Governments in Nigeria have
established about seventeen poverty alleviation programmes including Structural Adjustment
Programmes (SAP), Literacy Education Programmes, Urban Mass Transit Programme, Low
5
Cost Housing Scheme, Rural Banking, People’s Bank, National Directorate of Employment
(NDE), Directorate of Food, Road and Rural Infrastructure (DEFRI), Family Economic
Advancement Programme (FEAP), Poverty Alleviation Programme (PAP), Youth Empowerment
Scheme (YES) and most recently, National Economic Empowerment Development Strategies
(NEEDS). The failure or very low success recorded by most of these programmes still make the
incidence of poverty a prominent features among Nigerian (Igben, 1984).
The failure of the government programmes necessitates a paradigm shift in policy
towards encouraging self-help organizations among the citizenry. In Nigeria today, one of the
various strategies employed to tackle poverty among the people is co-operative society (Olaleye,
2004). A prominent one among the Cooperative Societies is Cooperative Thrift and Credit
Society (Olaitan, 2005). Cooperative Thrift and Credit Societies mobilize funds from members’
contributions, trade and fines and advance credit to members with very minimal interest rate on
win-win terms. In the literature, cooperative-based small scale enterprises has been found to
perform better than their non cooperative-based counterparts (Amao, 2006; Adebayo and
Adeola, 2008; Adegeye and Ditto; Anyawu, 1987), however, whether this is the case in Yewa
North Local Government Area remains a subject of discourse requiring empirical evidence. This
empirical evidence is what this study is intended to provide. To effectively provide this empirical
evidence, there is the need to provide answers to the following questions:
What are the socio-economic characteristics of small scale cocoa SSEs in the study area?;
What is their level of participation in cooperatives?;
In what ways do cooperatives contribute to socio-economic development of the SSEs’
owners?;
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Is there significant difference between the financial performance of cooperative and non-
cooperative members’ owned SSEs?
What are the reasons for participation or otherwise in cooperative societies by the SSEs’
owners?
An attempt to answer these questions informs the objectives of this study.
1.3 Objectives of the Study
The general objective of this study was to examine the effect of cooperatives on the growth of
small scale enterprises in Yewa North Local Government Area, Ogun State while the specific
objectives were to:
1. describe the socio-economic characteristics of small scale enterprises’ owners;
2. access their level of participation in cooperative societies;
3. identify ways by which cooperative contributes to socio-economic development of the
SSEs;
4. establish if there is significant difference between financial performance of cooperative-
based and non-cooperative based small scale enterprises;
5. identify reasons for participation or otherwise in cooperative societies by the SSEs’
owners.
1.5 Justification of the Study
A review of relevant literature on small scale enterprises (Olaitan, 2006; Onuoha and
Enyeribe, 1986; Nigerian Bank for Commerce and Industry, 1982; Inang and Ukpong, 1992)
revealed dearth of empirical information on effect of cooperative societies on small scale
enterprises in the study area. An empirical information on the effect of cooperative on SSEs
may further highlights ways by which cooperative can be positioned to serve the SSEs better
7
there contributing more to the desired economic emancipation SSEs’ owners and overall
national economic growth . An informed mind is said to have higher probability of making
informed decisions (Lippi et al., 2010). Informed decision by the marketers on the roles of
cooperative will ultimately better their businesses. This research is therefore relevant to small
business development which justifies its funding.
This study will contribute to knowledge in the area of small business development. It will
provide basis for further research on the study by the academia with a view to ultimately
encouraging participation in self-help group (cooperatives).
Empirical information on effect of cooperative on sall scale enterprises can assist government to
better the lot of the active poor (businessmen) by formulating appropriate policies to promote
cooperatives.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 The Importance of Small Scale Enterprises
Small –Scale enterprises are reputed to be behind most of the socio- economic transformation in
South East Asia and they play a significant role in the development of Sub- Saharan Africa
countries (Kayanula and Quartay (2000). This is so because during the early Stages of economic
development, SSEs ( Small-scale Enterprises ) provide great opportunities for creating
employment and wealth. Thus, SSEs have been noted as vital instruments for poverty alleviation
8
( Kimuyu, 1999 ).
Small Scale rural and urban enterprises have been an area of major concern to
policy makers in an attempt to accelerate the rate of growth in developing countries. SSEs
have been recognized as the engines through which the growth objectives of developing
countries can be achieved ( Kayanula and Quartey, 2000 ).
Industrial development has been seen as the heart of Nigeria’s economic
programme since independence. Consequently, the small industries were recognized as having
the potential to play a dynamic role in industrial growth, particularly through its multiplier
effect on macro economic objectives of economic growth, full employment, and income
distribution as well as the development of local technology and the stimulation of indigenous
entrepreneurship ( Essien and Bello, 2007 )
Generally Speaking, in developing countries with large informal sector, the
importance of small enterprise and the upgrading of the informal sector are being advocated as a
strategy for enhancing development and growth. It becomes more apparent when one considers
their labour intensive nature, income generating possibilities, capital – saving capacity, use of
local resources and reliance on few imports, flexibility, innovativeness and strong linkage with
other sectors of the economy ( Anyanwu, 2001 ).
Consequent upon the aforesaid crucial roles played by Small-scale Enterprises,
‘’it has therefore been postulated that the key index of real economic development in a given
country is the quantum of enterprises taking place within such country’s territorial boundaries
(Olaleye and Adekole (2006).
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The importance accorded Small-scale Enterprises development is not without
some justifiable reasons. Some of the reasons were identified by Olaleye (2004 ) as including
the following :
(i) Since the products of small enterprises originate from indigenous craft tradings, it is
likely to satisfy the needs of the (local) poor people.
(ii) Local people are satisfied because the profits of small enterprises are not dependent on
long –run production, so they can manufacture small quantities of products which have a
regional or even a more local market.
(iii) Employment created is equitably spread throughout the country
(iv) The small enterprise produce differentiated products
(v) Foreign exchange is saved because local ingenious technology will probably use locally
produced raw material and equipment.
(vi) Small enterprises produce jobs than larger ones,
(vii) Though job satisfaction can not be measured but research has shown that people who
work in small enterprises are happier than those who work in larger organizations.
(ix) Small enterprises are preferred in the area of management because they use lesser capital
which is scarce resource and also less management which is more scarce.
(x) They are resilient to depression and offer steadier level of employment than larger ones.
There are three (3) cogent arguments for existence of small enterprise. The first is the
labour absorptive capacity argument that small enterprise simply exist because the growth rate
of the formal economy is inadequate to absorb the national force. The second is the labour
creation argument which explains how small enterprises can be used to create jobs whereby the
third is the poverty reduction argument. In this parlance, it is seen as a vehicle that facilitates
10
pro-poor growth and offer opportunity for better utilization of indigenous resources (Essien and
Bello, 2007 ).
Small-scale businesses can create employment in two major ways. Firstly, by self-
employment of the owners of the enterprises and secondly, through paid workers employed to
work in small-scale firms ( Ogisi et al, 2009 ).
It should be noted however, that apprenticeship is another medium by which SSEs
( Small-scale Enterprises ) create employment in rural and urban areas. According to Ogisi et al
( 2007 ), this is so because, the trainees later set-up their own small businesses practicing their
trade at the expiration of their period of apprenticeship .
2.2. PROBLEMS OF Small-scale Enterprises IN NIGERIA
In spite of the numerous benefits derivable from Small-scale Enterprises, they (Small-scale
Enterprises ) are plagued with lots of problems militating against their growth in Nigeria and in
Yewa North Local Government Area of Ogun State. These include problem of high rate of
business attrition among small firms. The problem of high rate of business attrition (or gradual
wearing down) among small firms has been traced to a myriad of factors including funding, lack
of management ability, infrastructure, poor record keeping, shortage of skilled personel as well
as poor or improper risk management which has made small enterprises witnessed a high rate of
attrition, indebtedness and bankruptcy ( Ejembi and Ogiji, 2007 ).
Effective performance of small business rests on finance (Bircall,2003). Therefore, a number of
attempts have been made especially in the area of finance in order to alleviate small scale
enterprises problems. This follows because finance is one of the needed factors for proper
business operation which will apparently lead to business expansion.
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Despite their (SME) dominant numbers and importance in job creation, SME traditionally
have faced difficulty in obtaining formal credit or equity. This is because the maturities of
commercial bank loans extended to SME are often limited to a period far too short to pay off any
sizeable investment. (Abereijo and Fayomi, 2005).
Finance has been identified in many business surveys as one of the most important
factors determining the survival and growth of small and medium enterprises (Small-scale
Enterprises) in both developing and developed countries (UNCTAD, 1995, 2001, SBA, 2000).
2.3 Financing Small Scale Enterprises for Economic Development
Small-scale Enterprises development championed by the private sector can be said to be
synonymous with entrepreneurship development. However, as development takes places, the
question that arises is the extent to which credit can be offered to the rural poor to facilitate their
taking advantage of the developing entrepreneurial activities and the generation of self
employment in non farm (and even farming) activities required investment in working capital
which at low level of income, the accumulation of such may be difficult. Under such
circumstances, loans by increasing family income can help the poor to accumulate their own
capital and invest in employment generating activities (Hossain, 1988).
In swift response to address the problems of finance of Small-scale Enterprises, a number
of programmes were instituted by both Federal and states governments in Nigeria over the years.
Provision of viable credit delivery system has been a cardinal mission of governments in
developing economies. Often, these government practice the policy of providing subsidized
credits to resource poor farmers (and non-farmers alike) through the formal financial
intermediaries with the view to insulating them from the usurious tendencies of informal credit
sources (Udoh, 2008).
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Olaleye and Adekola (2006) observed that Federal government in Nigeria has established
about seventeen (17) poverty alleviation programmes including Structural Adjustment
Programmes (SAP), Literacy Education Programmes (LEP), Urban mass Transit programme,
Low cost housing scheme, Rural Banking, People’s Bank, National Directorate of Employment
(NDE), Directorate of Food , Road and Rural Infrastructure (DEFRI), Family Economic
Advancement Programme (FEAP), Poverty Alleviation Programme (PAP), Youth Empowerment
Scheme (YES) and most recently, National Economics Empowerment Development Strategies
(NEEDS). The failure or very low success recorded by most of these programmes still make the
incident of poverty a prominent feature among Nigerians (Igben, 2004).
The failure of the government programmes necessitates a paradigm shift in policy
towards encouraging self-help organization among the citizenry. In Nigeria today, one of the
various strategies employed to tackle poverty (and perhaps promote Small-scale Enterprises)
among the people is cooperative society (Olaleye, 2004).
2.4 Cooperative in Perspective
A cooperative is 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 (International Cooperative Alliance; ICA; 2008). This
definition emphasizes that cooperatives are independent of government and not owned by any
other one than members. Cooperative organization can be seen as an instrument for social
transformation (ILO, 1966).
The history of cooperative movement can be traced to Britain at the end of the 18th century and in
the early part of 19th century (Anyanwu, 2001). The notion of cooperative movement was
conceived by the British working class mainly as a result of their poor working conditions
13
(Aryeetey, and Udry, 1997). The first successful cooperative shop was established by a group of
28 flannel weavers in Rochdale Lancashire that came to be known as ‘Rochdale society of
Equitable Pioneers”. The formation of a cooperative movement coincide with the period the
impact of industrial revolution was being felt among the working class. The main aim of
cooperative organisations formed by the weavers were to raise enough capital, open a shop
where they will exhibit their work jointly to create employment opportunities for their members
by establishing a manufacturing venture etc (Anyanwu, 2001)
According to Munkner (1976), cooperative can be seen as having four elements which
determined the specific structure, its structure as a form of organization; namely:
A group of person with at least one economics interest in common.
The self-help motivation.
The means to achieve this aim by establishing a common enterprises and
The main objective which is to perform services for the promotion of economics situation
of members’ enterprises or households.
Cooperatives have principles of open membership rather than size of investment, autonomy and
independence (Bircall, 2003). Behind these principles are values of self-help, self-responsibility,
as well as honesty, openness, social responsibility, democracy and caring for others (ICA, 2008).
Cooperative societies are basically for economic improvement of members through the social
means of group participant and joint effort. According to Somefun, the major goals of the
cooperative societies are directed at the general welfare of members. The cooperative being
product of the members, provides basis for the members to grow with it and also provide a
foundation with which poverty is powerless to effect structural changes on the members
(Olaleye, 2006).
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To achieve improved welfare of members, Igben (1984) observed that cooperative societies
mobilize local resources and human skills which have been under utilized and channeled them
into production to meet local demands. However, Iniodu and Okoji (1996) argued that the
realization of the major or minor goals of the cooperative societies is dependent on factors such
as: the political and economic conditions in the country; the material and financial capabilities of
the cooperatives; the educational level and activities of members and associate and the totally of
the surrounding conditions.
2.5 Cooperatives as a Tool for Small-scale Enterprises’ Development
The United Nations (UN) sees cooperative as an important means of creating
employment, overcoming poverty, achieving social integration and mobilizing resources
effectively (Birchall, 2003). Cooperative can therefore be seen as an instrument for social
transformation (ILO, 1966).
Economic development as describe by Mr A. Okorie of the University of Nigeria,
Nsukka, is a system whereby greater percentage of the people of the country is stimulated to
actively participate in the social and political growth of the country. He went further to say that
except development programmes of the country are brought to the level of every Nigerian to
participate in them, the citizens will regard such programmes as foreign and they will not show
interest in them.
Going by the World Bank’s latest assessment, the gap between the rich and poor is
growing and that unless current trends are reversed; the Millennium Development Goals (MDG)
will not be met. However, the UN has constantly recognized the contribution of cooperatives to
the MDGs (Birchall, 2003).
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Nigeria agriculture also confronts an array of challenges common across sub-Saharan
Africa that is low productivity, limited capitalization, small size of land holdings and decline in
soil fertility. The major challenges of the agricultural sector include a persistent urban bias in
price and public spending policies leading to highly unbalanced distribution of resources
between the rural and urban sectors (Ministry of Finance, 2003).
Burning with patriotic zeal, Tete-Ansar launched, in 1932, the African cooperative
society as he felt that the economic salvation of the people lay in their own hands. The diamond
cooperative scheme introduced as part of a USAID peace building intervention, the Diamond
industrial policy and management (DIPAM) programme which later developed into the
integrated diamond management programme (IDPM) and from September, 1999 to December
2007. Management system international was contracted by the United States government and
furnished with nearly $6.5 million (Dollars) to manage the programme aimed at improving
revenue to the Sierra Leonean government and benefit to the community. The strategic
objectives were to ensure that Sierra Leone’s diamond can never again be used to fund conflict.
(MSI, 2004) and to reduce the potential for diamonds to be used for money laundering and
funding international crime and terrorism (Levin, 2005).
The report made on this cooperative scheme shows a number of positive socio-economic
impacts which includes access to employment, income generation for women, providing support
services, access to proper medical care, improved social status and sense of dignity amongst
member miners to attend to their children education rehabilitate and construct houses and
purchase consumable such as furniture (Global Witness, 2006 and MSI, 2007).
According to Olaleye (2007), granting credit to members, convenient period of pay back,
acquisition and distribution of vehicles to members ,distribution of household equipment ,
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distribution of essential commodities, Organization of literacy programme, mutual aids,
exchange of labour, training in record keeping, training in thrift and banking habit, acquisition
of vocational skills, introduction to profitable ventures are some of the strategies employed by
cooperative societies to alleviate poverty among members.
Therefore cooperatives continues to be an important means often the only one available,
whereby the poor as well as those better off but at perpetual risk of becoming poor have to
achieve economic security and an acceptable standard of living and equality of life (ICA, 2008).
2.6 Cooperative In Entrepreneurship
The Dynamic role of small and medium scale enterprises (Small-scale Enterprises) in
Nigeria have been highly emphasized. These enterprises have been identified as the means
through which the rapid industrialization, job creation, poverty alleviation and other
developmental goals are realized, Small-scale Enterprises are also seen as vital agents in the
development process of less developed countries and developed economic, including Nigeria
Small-scale Enterprises are specifically promoted by the government to achieved policy targets
on entrepreneurship, to create employment opportunities, to mobilize local recourses, to mitigate
rural area and to distribute industrial enterprises (The Nation, 2006)
In addition to the above, the promotion of Small-scale Enterprises would not only encourage
indigenous initiative but also promote the establishment of import substitution industries. It will
also generate additional foreign exchange and help to strength currency and the balance of
payment position ( The nation, 2006)
2.7. Determinants of Small scale Enterprises’ Growth
The growth of Small-scale Enterprises is determined by five major factors. These factors are:
(a) Size of the market and nature of product
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(b) The stock of economies of scale and scope
(c) The rate of upgrading
(d) The nature of the supporting institution
(e) The form of collective efficiency
(a) Size of the market and nature of products: Market size is an important factor for
Small-scale Enterprises development because the scale of product demand determines the growth
rate of the produce. At this end, the impacts of Small-scale Enterprises are limited because of
low demand for their products caused by low income-relative growth in Small-scale Enterprises
due to positive change in money income, because people (in Remo Division of Ogun State) can
gain such changes (Udoh, 2008)
(b) The Stock of Economies of scale and Scope: The ability to penetrate larger market is
important for Small-scale Enterprises dynamics. Reaching larger market will not only induce
proportionate increase in productivity but also lead to increasing returns. Such returns arise when
an increase in all productive inputs results to a more than proportionate increase in Output
(Ejembi and Ogiji, 2007)
(c) The nature of the supporting institutions: Since the attainment of Independence, every
known regime recognizes the importance of promoting Small-scale Enterprises as the basis of
economic growth. As a result several lending institution including the Nigerian Banks for
Commerce and Industry (NBCI), the People Bank of Nigeria (PBN), the Micro Finance Bank
and co-operative Societies.
Performance in business signifies applying capital productively. The only one appropriate way is
to measure the return on all assets employed or on all capital invested (Drucker, 1976). A
18
business organisation could measure its performance using financial and non-financial measures.
The financial measures include profit before tax and turnover etc.
2.8 Cooperative as an Informal Source of Finance to Small Enterprises’ Development
Finance is one of the factor needed for business operation.(Ogunleye, 2000). An
increasing body of analytical work has attempted to explain the functioning of credit markets
using new theoretical development (Stigletz and Weiss, 1981). Lack of credit forces enterprises
to rely on internally generated fund for both working capital and investment, which hampers
firm’s ability to manage their working capital, making it difficult for them to increase sales and
operate at full capacity (Ministry of Finanace, 2003). Empirically, research on the use of credit
by rural household tends to imply that though it is not obvious that demand far credit for
outweighs the supply; there are significant obstacles to the transformation of potential demand
into revealed demand (Aryeeley, 1966). For small enterprises, reliable access to short term and
small amount of credit is more valuable and emphasizing. It may be more appropriate in credit
programmes aimed at such enterprises (Atieno, 2001). Credit markets in Africa have mainly
been characterized by the inability to satisfy the existing demand for credit in rural areas.
However, whereas for the informal sector, the main reason for this inability is the small size of
the resources it controls, for the formal sector, it is not an inadequate lending base that is the
reason (Aryeetey, 1996).
A large part of financial transactions in Africa occur outsides the formal financial system
(Atieno, 2001). Informal sources of finance refers to all trasactions,loans and deposits occurring
outside the regulation of a central monetary authority, while the semi informal has the
characteristics for both formal and informal sectors. In Africa, it has been defined as the
operation of savings and credit associations (ROSCA), professional money lenders, and part-
19
time money leanders like traders, grainmillers, friends as well as cooperative societies
(Aryeeteyety et al, 1997; Aryeeteey and Udry, 1997).
Cooperative societies being an example of informal sources of financnce tends to help
the small enterprises in the area of finance. The emergence of demand for short-time credit
especially among traders and farmers will most likely lead to the development of an informal
unit to meet that demand. Informal credit therefore seems to develop in response to an existing
demand (Atieno, 2001). Informal credit market (say cooperative) has developed in rural areas,
providing faster service s to the clients. That informal finance is more important than formal
finance has been proven by different approaches used to measure its magnitude in different
countries, namely; Malawi (Chipeta and Mkandawire, 1992) and Ghana (Aryeetey and Udry,
1997).
CHAPTER THREE
3.0 METHODOLOGY OF THE STUDY
3.1 Study Area
The area of the study was Yewa North Local Government Area of Ogun State. It was
formally Egbado North Local Government with its headquarters in Ayetoro. Yewa North Local
Government is one of the twenty local government areas in Ogun State and of these, it has the
largest expanse of land with a size of 2,043,60 square hectare (Y.N.L.G. 2005). The Local
Government area is bounded in the west by Republic of Benin, in the south by Yewa South
Local Government Area and in the North by Oyo State. Ayetoro is the headquarters of this local
20
government and it is located on latitude 7O15’N and longitude 3O3’E in the deciduous derived
savannah zone of Ogun State. Other important settlements in the local government include Joga
Orile, Saala Orile, Owode Ketu, Igbogila, Igan-Okoto etc. The inhabitants are mainly Yoruba-
speaking various dialects which comprises of the Yewas and Ketus and their major occupation is
farming.
3.2 Sources and Methods of Data Collection
Both primary and secondary data were used for the study. Primary data were sourced
through structured questionnaires that were administered by me with the assistance of trained
enumerators on the respondents. The Small Scale enterprises’ owners in the study area will
constitute respondents for the study.
3.3 Sampling Technique
A multistage random sampling technique was employed for the study. While Ayetoro I,
Ayetoro II, Idofoi, Igbogila and Imasayi are fairly semi-urban while Sunwa, Ijoun, Eggua,
Ohunbe, Joga Orile/Iboro and Ibese are rural in nature. In the first stage, 50% of the towns in
semi-urban and rural towns were selected appease for the study. This averages 3 political wards
in semi-urban and rural wards each. In Ayetoro I, 40 SSEs were sampled while in each of the
other wards, 15 SSEs were sampled. The sampling of more SSEs in Ayetoro I is based on the
concentration of SSEs in the area as revealed by personal observation.
Table 1: Selection of Sample Size
Political wards Number Of SSEs to be sampled
Semi-urban settings
Ayetoro I 40
Igbogila 15
21
Imasayi 15
Rural settings
Sunwa 15
Joga Orile/Iboro 15
Ibese 15
Total 130
3.4 Methods of Data Analysis
Both descriptive and quantitative methods of data analysis were employed in achieving
the objectives of the study.
3.4.1 Objective 1, 2, 3 & 5
Descriptive statistics such as frequency distribution tables, measures of central tendency,
proportions etc shall be used in describing socio-economic characteristics of the respondents (1),
assessing their level of participation in cooperative societies (2), identify ways by which
cooperative contributes to their socio-economic development (3) and describe reasons for
participation or otherwise in cooperative societies (5).
3.4.2 Objective 4
Budgetary Analysis was used to analyse the cost-return structure but the Rate of Return on
Investment (taken as financial performance) of the small scale enterprises. Budgetary analysis
involves determining gross margin, net-income, profitability index and rate of return on
investment among others.
The model is explained below:
Π = TR-TC
22
TR = PQ
TC = TVC + TFC
GM = TR-TVC and
NI = GM-TFC
PI = NI
TR
RRI = NI x 100
TC 1
Where;
Π = Profit
TR = total revenue from cocoa sales.
TVC = total variable cost.
TFC = total fixed cost
TC = total cost
GM = gross margin
PI = profitability Index
RRI = Rate of Return on Investment
23
CHAPTER FOUR
4.0 RESULTS AND DISCUSSIONS
4.1.0 Socio – economic characteristics
4.1.1 Age Distribution of Respondents
Age is an important factor that affects level of productivity and level of productivity may affect
credit use and decision of SSEs to participate in cooperative and reap the benefits of cooperative
movement.
The age distribution of the respondents is presented in Table 4.1
Table 4.1: Age Distribution of Respondents
24
Cooperative Membership Gender Frequency Percent
Non-Cooperators 18-45 years old 64 85.3
46-60 years 11 14.7
Subgroup Total 75 (57.7%)* 100.0
Cooperators 18-45 years old 52 94.5
46-60 years 3 5.5
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Source: Field survey, 2011.
* % of the grand total
The study revealed, as shown in Table 4.1, that majority (57.7%) of the sample SSEs were non-
cooperators while 42.3% of the sampled SSEs owners were cooperators. It can also be seen from
the distribution in Table 4.1 that majority (85.3%) of the non-cooperators were between 18-45
years age bracket. Likewise, majority of cooperators had their age within the same age bracket
(18-45 years). The implication of this is that any crusade to encourage participation in
cooperative societies as a self-help means should focus more on respondents within 18-45 years
age bracket as the success of such endeavour would most likely depend on their conviction.
4.1.2 Gender Distribution of Respondents
Gender has been found to influence access to productive resources including credit (Yahaya et
al., 2011). It is therefore necessary to describe the gender of the respondents for possible
inference and generalization on how it relates to participation in cooperative societies.
The distribution of respondents by gender and cooperative membership is presented in Table 4.2.
Table 4.2: Gender Distribution of Respondents
Cooperative Membership Gender Frequency Percent
Non-Cooperators Male 50 66.7
25
Female 25 33.3
Sub Total 75 (57.7%)* 100.0
Cooperators Single 32 58.2
Married 23 41.8
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Source: Field survey, 2011.
* % of the grand total
The study revealed, as shown in Table 4.2 that the male constituted the majority of sampled
cooperators (66.7%) and non-cooperators (58.2%). However, the womenfolk seemed closing the
gap between male and female in membership of cooperative societies with 41.8% as against
33.3% exhibited in the non-cooperative group. This might not be unconnected to thrifting
tendency of the womenfolk.
4.1.3 Marital Status of Respondents
Marital status is expected to influence respondents’ level of responsibilities which could
have positive or negative influence on the need to participate in cooperative societies.
Table 4.3: Marital Status of Respondents
Cooperative Membership Marital status Frequency Percent
Non-Cooperators Single 21 28.0
Married 50 66.6
Divorced 2 2.7
Widowed 0 0.0
Separated 2 2.7
Sub Total 75 (57.7%)* 100.0
26
Cooperators Single 11 20.0
Married 38 69.0
Divorced 5 9.0
Widowed 2 3.6
Separated 3 5.4
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Source: field survey, 2011.
* % of the grand total
The study revealed, as shown in Table 4.3, that majority of the respondents (either cooperators or
non-cooperators) were married. The study also revealed that substantial percentage of non-
cooperators (28.0%) and cooperators (20.0%) were single. From the distribution, one could
observe that while 28.0% of the sampled non-cooperators were single, only 20.0% of the
sampled cooperators were single. Conversely, 66.6% of the sampled non-cooperators were
married while 69.0% of the sampled cooperators were married. This implies that marriage seems
to have influence on being members of cooperative society while being single reduces the
propensity to be a cooperator.
4.1.4 Education Level of Respondents
Education is an important factor in the recognition and utilization of investment opportunities.
The essence of education was emphasize by Lawal (1993) when he asserted that entrepreneurs
should not be motivated to launch a business venture by considering the profitability and
viability of the project without the required knowledge and experience. And that education and
experience in line of work are highly essential to entrepreneurs.
Table 4.4: Distribution of the respondents by educational attainment
Cooperative Membership Level of Education Frequency PercentNon-Cooperators No formal education 2 2.7
Primary education 16 21.3
27
Secondary education 22 29.3OND/NCE 19 25.3HND 12 16.0BSC 4 5.3PG 0 0.0Subgroup Total 75 (57.7%)* 100.0
Cooperators No formal education 2 3.6Primary education 9 16.3Secondary education 17 30.9OND/NCE 13 23.6HND 9 16.3BSC 4 7.2PG 1 1.8Subgroup total 55(42.3%)* 100.0*Grand total 130
Source: Field Survey, 2011
* % of the grand total
As shown in Table 4.4, cooperators and non cooperator cut cross various educational
status of the respondents. The study revealed that 2.7%, 21.3%, 29.3%, 25.3%, 16.0% and 5.3%
of the sampled non-cooperators had no formal education, had primary education, secondary
education, OND/NCE, HND and BSC respectively. This implies that substantial percentage of
the sampled non-cooperator (29.3%) and cooperators (30.9%) possessed secondary education.
4.1.5 Religion of Respondents
The religion distribution of the respondents is presented in Table 4 5.
Table 4.5: Religion Distribution of Respondents
Cooperative Membership Religion Frequency Percent
Non-Cooperators Christianity 40 53.3
Islam 33 44.0
Traditional 2 2.7
Subgroup Total 75 (57.7%)* 100.0
Cooperators Christianity 27 49.1
Islam 28 50.9
Traditional 0 0.0
28
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Source: Field Survey, 2011
Looking at the distribution in Table 4.5, it can be seen that the two dominant religions
(Christianity & Islam) are fairly represented in the study. This implies that the results
obtained/obtainable from this study is likely to be less religious bias. Besides, the highest
percentage of the non-cooperators (53.3%) were Christians while the highest percentage of the
cooperators (50.9%) were Muslims. This could mean that religion has a role to play in being a
member of cooperative societies.
4.1.6 Household Size Distribution of Respondents
The total household size of the respondents comprises of their wives or husbands, children and
their dependants. This is in agreement with the view of Akerele (2003), who stated that a
household consists of a category of people who fed from the same pot. In African setting
children and women constitute large proportion of a household size. In addition, the household
size has been a major determinant of involvement in entrepreneurship in the area of loan credit
procurement and repayment, involvement in cooperatives and utilization of cooperative and
microfinance facilities as supported by the findings of Oladeebo (2005) Ojo (2008) Mafimisebi
(2008).
Table 4.6: Household Size Distribution of Respondents
Cooperative Membership Household size Frequency Percent
Non-Cooperators 1-5 58 77.3
6-10 16 21.3
Above 10 1 1.4
Subgroup Total 75 (57.7%)* 100.0
Cooperators 1-5 41 74.5
6-10 13 23.7
29
Above 10 1 1.8
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Source: Field Survey, 2011
As shown in Table 4.6, majority of the non-cooperators (77.3%) and cooperators (74.5%) had
household size of between 1-5 persons. This implication of this is that the respondents had fairly
moderate household sizes. By carefully observing the Table 4.6, one can conclude that
respondents with either household sizes of between 1-5 or 6-10 persons are fairly represented in
either of the two groups (cooperators & non-cooperators).
4.1.7 Primary Occupation Distribution of Respondents
The primary occupation of the respondents could influence the need for credit and the propensity
to participate in cooperative society.
The distribution of the respondents by their primary occupation is presented in Table 4.7.
Table4.7: Primary Occupation Distribution of RespondentsCooperative Membership Primary occupation Frequency Percent
Non-Cooperators Farming 5 6.7
Trading 20 26.7
Artisan 26 34.7
Civil service 17 22.7
Others 7 9.2
Subgroup Total 75 (57.7%)* 100.0
Cooperators Farming 2 3.6
Trading 15 27.3
Artisan 18 32.7
Civil service 18 32.7
Others 2 3.7
Subgroup total 55(42.3%)* 100.0*
30
Grand total 130
Source: Field Survey, 2011
Looking at the distribution in Table 4.7, one could see that both non-cooperators and cooperators
were involved in various activities as their main occupation. Different occupations seemed to be
fairly represented in either of the groups (cooperators and non-cooperators). This implies that
type of occupation may not be a significant factor influencing decision to join cooperative
society.
4.2 LEVEL OF PARTICIPATION IN COOPERATIVE
4.2.1 Types of Cooperative of the respondents
The figure below revealed the frequency distribution of respondents according to the types of
cooperative societies that they belonged to.
Figure 1: Types of Respondents’ Cooperative Societies
31
Source: Field survey, 2011.
Figure 1 revealed that majority (57.7%) of the respondents were non-cooperators. Besides,
32.3%, 5.8% and 4.2% of the respondents belonged to Cooperative Thrift and Credit Society
(CTCS), Cooperative Multipurpose Society (CMS) and Housing Cooperative respectively. This
implies that majority of the cooperators belonged to Cooperative Thrift and Credit Society
(CTCS) apparently to have access to loan for their various businesses.
4.2.2 Average Annual Savings and Shares Contributed by cooperative members
The level of participation in cooperative may not be adequately captured by membership of
cooperative societies, but also by the magnitude of their contributions in the societies. Hence, the
need to analyze the magnitude of their savings and shares in the societies.
Figure 2: Average Members’ savings and Shares in Cooperatives
32
79850
32500
98800
47800
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
YEAR 2009 YEAR 2010
SAVINGS SHARES
Source: Field Survey, 2011
As shown in Figure 2, irrespective of the year under comparison, the average savings of
cooperative members exceeded their shares. This may not be unconnected to the fact that
investment in cooperative shares is usual once which limits its growth while savings is
continuous. Besides, nominal growth in savings and shares of cooperative is noticeable in year
2010. While the average shares and savings of cooperators in 2009 were N79, 850 and N32,500
respectively, that of years 2010 were N98,800 and N47,800 for saving and shares respectively.
The nominal growth in members’ savings and shares may result to increased loan availability for
members.
4.2.2 Enterprise Size of the Respondents
In classifying the enterprise size of the respondents, the employees’ size approach was adopted.
This is in line with the view of Lawal (1993) that sales turnover, capital employed, profit,
number of employees, scope of operation are some of the indices used to measure organization
33
size. In addition, using size of employees to define and classify enterprises has been a common
practice in literature (Adams and Hall, 1993; Freel, 1999; Rothwell and Zegveld, 1982).
Following the definition of Nigeria National Council of Industries (NNCI) a small scale
enterprise is an enterprise with a labour size of 11 – 100 workers (Udechukwu, 2003).
Figure 3: Enterprise Employees' Size
Source: Field Survey, 2011
4.3.0 WAYS BY WHICH COOPERATIVE CONTRIBUTES TO SSE DEVELOPMENT
Table 4.8 presents the responses of sampled cooperative-based SSEs on cooperative
contributions to the development of their enterprises.
Table 4.8: Contributions of cooperative to SSEContribution of cooperative to SSEs Frequency Percent Rank
34
Loan 53 31.9 1st
Cooperative education 24 14.4 4th
Avenue for savings 34 20.5 2nd
Access to production inputs 25 15.0 3rd
Acquisition of assets 20 12.1 5th
Supports during special occasions 10 6.1 6th
Total 166* 100.0
Source: Field Survey, 2011
* Multiple responses
As shown in Table 4.8, the most important way by which cooperative impact SSE in the study
area is through loan advancement with 31.9% of the total responses. Aside loan advancement to
members, next in the list of ways by which cooperatives impact SSEs is by providing avenue for
savings to members with 20.5% of the total responses. The third most important way by which
cooperatives impact SSEs is in the area of asset acquisition. The respondents in question claimed
that if not for cooperative, they wouldn’t have being able to acquire certain assets. The fourth
and fifth most important ways by which cooperatives impact SSEs in the study area were
through cooperative education and supports during special occasions respectively. While 14.4%
of the total responses supports cooperative education as a way by which cooperatives impact
their SSEs, only 6.1% of the total responses was in favour of supports during special occasions.
4.4.0 Comparison of Enterprise Performance
4.4.1 Budgetary Analysis of the Sampled Enterprises
Category Variables All enterprises
Non-cooperators TVC 28,500,250
35
TFC 5,025,340
TC 33,525,590
TR 35,023,450
GM 6,523,200
NI 1,497,860
PI 0.04
RRI (%) 4.46
Cooperators TVC 36,065,440
TFC 8,025,118
TC 44,090,558
TR 52,012,500
GM 15,947,060
NI 7,921,942
PI 0.15
RRI (%) 17.96
Source: Field Survey, 2011
TVC = Total Variable Cost. TFC = Total Fixed Cost. TC = Total Cost. TR = Total Revenue. GM = Gross Margin NI = Net Income, PI = Profitability Index, RRI = Rate of Return on Investment
The budgetary analysis table below shows the performance of the enterprises in question
in the year 2010. From the table, the enterprises formed by non - cooperators had a total variable
cost of N28,500,250, total fixed cost was N5,025,340, total cost was N33,525,590 and the total
revenue was N35,023,450 while the gross margin and net income were N6,523,200 and
N1,497,860 respectively. For the cooperators, the total variable cost, total fixed cost and total
cost were N36,065,440, N8,025,118 and N44,090,558 respectively. The total revenue for the
enterprise operated by cooperators was N52,012,500 while the gross margin and net income
were N15,947,060 and N7,921,942 respectively. From the analysis, the result shows that the
36
enterprises formed by cooperators earned more net income than the enterprises formed by non –
cooperators. However, this is not an indication of higher profitability or performance. To
measure the profitability and perhaps performance of the enterprises, their Profitability Index
(PI) and Rate of Return on Investment (RRI) were estimated. As shown in Table 4.8, the PI and
RRI of the non-cooperative based enterprises were 0.04 and 4.46% respectively while that of
cooperative based enterprises were 0.15 and 17.96% respectively. The superiority in
performance (measured by profitability and rate of return on investment) of the cooperative-
based enterprises might not be unconnected to access to affordable loan (which usually
characterized cooperative societies) and cooperative education which could have helped them in
their businesses.
4.5.0 MOST IMPORTANT REASONS FOR JOINING COOPERATIVE SOCIETIES
Cooperative Membership Reasons for joining cooperative Frequency Percent
Non-Cooperators Not a member 75 100.0
37
Subgroup Total 75 (57.7%)* 100.0
Cooperators To have access to credit 40 72.7
To socialize 2 3.6
For the cooperative education 10 18.2
Noticed cooperative effect on
friend’ enterprise
3 5.5
Subgroup total 55(42.3%)* 100.0*
Grand total 130
Table 4.9 presents the distribution of the respondent by the reasons for joining cooperative
societies
Table 4.9: Distribution of respondents by their most important reason for joining cooperative societies
Source: Field Survey, 2011
As shown in Table 4.9, the most important reason for belonging to cooperative societies by
members is to have access to credit. 72.7% of the respondents claimed that they joined
cooperative societies in order to have access to credit while 3.6%, 18.2% and 5.5% of the
respondents claimed that they joined cooperative societies mainly to socialize, for cooperative
education and as a result of cooperative effects they noticed in the friend’s business respectively.
It is worthy of note that substantial percentage (18.2%) of the respondents claimed that they
joined cooperatives mainly for cooperative education. This implies that aside to gain access to
credit, cooperative education is in the forefront of reasons for joining cooperative societies.
CHAPTER FIVE
5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
38
This study examined the effect of cooperatives on the growth of small scale enterprises in Yewa
North Local Government Area, Ogun State. A total of one hundred and thirth (130) respondents
were randomly selected for the study. All the respondents (130) were interviewed through
structured questionnaire.
The results obtained on the socio-economic characteristics of the respondents revealed
that majority SSEs were non-cooperators (57.7%), majority (85.3%) of the non-cooperators were
between 18-45 years age bracket. Likewise, majority of cooperators had their age within the
same age bracket (18-45 years). The implication of this is that any crusade to encourage
participation in cooperative societies as a self-help means should focus more on respondents
within 18-45 years age bracket as the success of such endeavour would most likely depend on
their conviction. It was also discovered that majority of the sampled non-cooperators (66.7%)
and cooperators (58.2%) were male. However, the womenfolk seemed closing the gap between
male and female in membership of cooperative societies with 41.8% as against 33.3% exhibited
in the non-cooperative group. This might not be unconnected to thrifting tendency of the
womenfolk. Another revelation of the study is that married respondents constituted the majority
of the non-cooperators (69.0%) and cooperators (69.0%) in the study area and that being single
reduces the propensity of being a cooperator. It was discovered that cooperators and non-
cooperators cut across various educational group. However, substantial percentage of the
sampled non-cooperator (29.3%) and cooperators (30.9%) possessed secondary education. The
study also revealed that the highest percentage of the non-cooperators (53.3%) were Christians
while the highest percentage of the cooperators (50.9%) were Muslims. This could mean that
religion has a role to play in being a member of cooperative societies. It was also discovered
from the study that majority of the non-cooperators (77.3%) and cooperators (74.5%) had
39
household size of between 1-5 persons and that respondents with either household sizes of
between 1-5 or 6-10 persons were fairly represented in either of the two groups (cooperators &
non-cooperators).
Analysis of the level of participation in cooperative societies revealed that 57.7% of the
respondents did not participate in cooperative while 32.3%, 5.8% and 4.2% of the respondents
participated in Thrift and Credit Cooperatives (CTCS), Multipurpose Cooperatives (CMS) and
Housing Cooperatives respectively. This implies that majority of the cooperators belonged to
Cooperative Thrift and Credit Society (CTCS) apparently to have access to loan for their various
businesses.
An investigation into ways by which cooperatives contributed to the growth of SSEs in
the study area revealed that the most important way by which cooperative impact SSE in the
study area is through loan advancement followed by providing avenue for savings to members.
Other ways by which cooperatives contributed include access to production inputs, cooperative
education, acquisition of assets and supports during special occasions in that order.
Comparison of the financial performance of cooperative and non-cooperative-based SSEs
was done through budgetary analysis. The results revealed that enterprises formed by
cooperators earned more net income than the enterprises formed by non – cooperators. However,
this was not an indication of higher profitability or performance. To measure the profitability and
perhaps performance of the enterprises, their Profitability Index (PI) and Rate of Return on
Investment (RRI) were estimated. The PI and RRI of the non-cooperative based enterprises were
0.04 and 4.46% respectively while that of cooperative based enterprises were 0.15 and 17.9%
respectively. The superiority in performance (measured by profitability and rate of return on
investment) of the cooperative-based enterprises might not be unconnected to access to
40
affordable loan (which usually characterized cooperative societies) and cooperative education
which could have helped them in their businesses.
Analysis of the most important reasons for joining cooperative societies showed that the
most important reason for belonging to cooperative societies by members is to have access to
credit. Other reasons claimed by the respondents for joining cooperative societies included; to
socialize, for cooperative education and as a result of cooperative effects they noticed in the
friend’s business. It is worthy of note that substantial percentage (18.2%) of the respondents
claimed that they joined cooperatives mainly for cooperative education. This implies that aside to
gain access to credit; cooperative education is in the forefront of reasons for joining cooperative
societies.
5.2 CONCLUSIONS
This study examined the effect of cooperatives on the growth of small scale enterprises in Yewa
North Local Government Area, Ogun State. Based on the findings of the study, it is concluded
that:
Majority of the respondents were male, married, had household sizes of between 1-5
persons, appreciably literate, aged between 18-45 years and were non-cooperative
members.
Being single reduces the propensity of being a cooperator
Among the cooperators, Thrift and Credit Societies were the most patronized.
The most important way by which cooperative impact SSE in the study area is through
loan advancement to member SSEs
The financial performance of cooperative-based SSEs is superior to Non-cooperative
based SSEs
41
The most important reason for belonging to cooperative societies by members is to have
access to credit
5.3 RECOMMENDATIONS
Arising from the conclusions of this study, it is recommended that:
SSEs in the study are should endeavour to join/form a cooperative societies as
cooperative membership by SSEs is found to contribute positively to SSEs financial
performance.
Married residents have higher propensity to join cooperative societies when compared to
their single counterparts. Therefore, any cooperative members’ enrolment crusade should
focused more on married residents as they are more likely to be pacified to join
cooperative than their single counterparts.
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