Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 11, 2011 19 The Impact of Cooperative Financing on Millennium Development Goal of Poverty Eradication: Lessons from Nigeria Onaolapo A . R Oladejo Moruf * Department of Management and Accounting, Faculty of Management Sciences Ladoke Akintola University o Technology, Ogbomoso, Oyo State, Nigeria. * E-mail of the corresponding author: [email protected]Abstract Despite the efforts and resources devoted to fighting poverty by the Nigerian government empowerment programmes, the problem has remained intractable. Significant among the medium for poverty alleviation models are users-owned organizations (Cooperative societies) designed as individual self-help and empowerment vehicles for micro-credit delivery. Testing the Cooperatives strategies in Nigeria is expected to give insight into the state of poverty in the continent of Africa and provide measuring guide to Millennium Development Goals (MDGs) relating to poverty reduction. This paper attempts to investigate the impact of cooperative financing method on the attainment of MDGs objective as regards poverty reduction. Data collected from the stakeholders in cooperative organizations in Nigeria were analyzed using descriptive statistics, regression analysis and Chi Square to establish the relationship between cooperatives financing, poverty reduction and its significance as a criterion for achieving the MDGs objectives. Causality was found between the tested variable especially cooperative credit assistance and poverty alleviation. The paper recommends that government policy should acknowledge the micro credit power of cooperatives and integrate this into its micro financing policy-focus. Keywords: Poverty, Poverty-Eradication Finance, Cooperative Financing Method, MDG 1. Introduction It has been realized in the recent years that there are limits to which government can singly promote development. Effective cooperative development is essential to nation’s growth but its impact on achieving the Millennium Development Goals (MDGs) relating to poverty eradication is a subject of concern to scholars and practitioners. The Nigerian economy is characterized by large percentage of the poor as reiterated by the National Poverty Eradication Program (NAPEP, 2010), which put the level of poverty at 67% in line with the World Bank report of 1999. Taking a cue from the African Development Bank (ADB, 2003) survey in 1997, Nigeria had 70.2 % of her population living just above one United State of America Dollar (USD) per day and 90.8% below two USD a day using the international poverty line criteria. The Nigerian situation represents a developmental experience characterized with poverty. According to Alabi and Ahiawodzi (2007), the frustrations of accessing credit facilities from formal systems compel the poor and informal business entrepreneurs to resort to different non-banking and informal arrangements to access funds for their operations. This has serious implications for a country like Nigeria where the economy is largely characterized by micro and small businesses as observed by Basu et al (2004). Further to this is the observation of Kevin, Louis &Mark (2000) that one means for the entrepreneurial firms to overcome the constraint of access to credit is by cooperating with either other entrepreneurial firms
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Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 11, 2011
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The Impact of Cooperative Financing on Millennium Development Goal of Poverty Eradication: Lessons from
Nigeria
Onaolapo A . R Oladejo Moruf * Department of Management and Accounting, Faculty of Management Sciences Ladoke Akintola University o Technology, Ogbomoso, Oyo State, Nigeria. * E-mail of the corresponding author: [email protected]
Abstract Despite the efforts and resources devoted to fighting poverty by the Nigerian government empowerment programmes, the problem has remained intractable. Significant among the medium for poverty alleviation models are users-owned organizations (Cooperative societies) designed as individual self-help and empowerment vehicles for micro-credit delivery. Testing the Cooperatives strategies in Nigeria is expected to give insight into the state of poverty in the continent of Africa and provide measuring guide to Millennium Development Goals (MDGs) relating to poverty reduction. This paper attempts to investigate the impact of cooperative financing method on the attainment of MDGs objective as regards poverty reduction. Data collected from the stakeholders in cooperative organizations in Nigeria were analyzed using descriptive statistics, regression analysis and Chi Square to establish the relationship between cooperatives financing, poverty reduction and its significance as a criterion for achieving the MDGs objectives. Causality was found between the tested variable especially cooperative credit assistance and poverty alleviation. The paper recommends that government policy should acknowledge the micro credit power of cooperatives and integrate this into its micro financing policy-focus. Keywords: Poverty, Poverty-Eradication Finance, Cooperative Financing Method, MDG
1. Introduction It has been realized in the recent years that there are limits to which government can singly promote development. Effective cooperative development is essential to nation’s growth but its impact on achieving the Millennium Development Goals (MDGs) relating to poverty eradication is a subject of concern to scholars and practitioners. The Nigerian economy is characterized by large percentage of the poor as reiterated by the National Poverty Eradication Program (NAPEP, 2010), which put the level of poverty at 67% in line with the World Bank report of 1999. Taking a cue from the African Development Bank (ADB, 2003) survey in 1997, Nigeria had 70.2 % of her population living just above one United State of America Dollar (USD) per day and 90.8% below two USD a day using the international poverty line criteria. The Nigerian situation represents a developmental experience characterized with poverty. According to Alabi and Ahiawodzi (2007), the frustrations of accessing credit facilities from formal systems compel the poor and informal business entrepreneurs to resort to different non-banking and informal arrangements to access funds for their operations. This has serious implications for a country like Nigeria where the economy is largely characterized by micro and small businesses as observed by Basu et al (2004).
Further to this is the observation of Kevin, Louis &Mark (2000) that one means for the entrepreneurial firms to overcome the constraint of access to credit is by cooperating with either other entrepreneurial firms
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or possibly with larger, established, resource-rich firms. The extent to which the cooperative method can be used to facilitate the MGDs relating to poverty reduction as declared by the United Nations summit of 2000 shall be the crux of this study.
1.1 Statement of the problem
Poverty is a multidimensional and very complex phenomenon, which requires a multifaceted response. Despite the efforts and resources devoted to fighting poverty by the Government empowerment programmes, the problem has remained intractable. A major obstacle to Cooperative development in Nigeria is policy neglect. The Nigeria government is not attracted to the cooperative financing strategies and has in most cases preferred some other economic groups similar to this in her poverty eradication programme. There are some factors that affect the performance of Cooperative Societies in discharging micro credit roles effectively and perhaps the reasons for lack of interest by the policy makers in Nigeria. Generally the capacity of Cooperative Societies to provide fund to the poor and low income group is limited by inadequate capital base (Asaolu 2004). The other critical element according to Akinwunmi (2006) was leadership. If there is purposeful leadership, and managers of cooperatives are transparent, dedicated and truly serving, the society can compliment existing micro-credit financing tools. Other problems affecting efficiency of the medium is the prevalent embezzlement of the little fund available making members to lose interest in this viable economic method.
Poor accounting and record keeping has crippled the activities of most cooperative societies in Nigeria (Asaolu 2004, Oladejo 2008, Lawal 2006).As user-owned organizations, cooperatives have been used as a model for individual self-help and empowerment that strengthens bonds leading to greater community awareness and involvement and as such become a vehicle for micro credit delivery. Testing the Cooperatives strategies in Nigeria is expected to give insight into the state of poverty in the continent of Africa. Few studies that exist in Nigeria (Asaolu 2004) (Akinwumi 2006) regarding cooperatives impact on poverty eradication did not test its impact on Millennium Development Goals (MDGs). These few studies failed to emphasize the significance of Cooperative finance and how it affects the attainment of MDG objectives of poverty eradication.
This paper remains germane as it explores the impact of Cooperative Societies financing as a vehicle for achieving the MDGs objectives of poverty eradication in Nigeria. Findings as regard the significance of cooperative financing are expected to proffer solution to the problem of poverty alleviation and government policy direction.
On the basis of the research problems stated above, this study therefore examines (i) The impact of Cooperative financing method on MDGs (ii) The extent that Cooperative financing method facilitates MDGs objective relating to poverty eradication The following null hypotheses are to be tested in order to achieve the objectives of the study
• Ho: There is no significant relationship between cooperative method and poverty reduction.
• H2: There is no significant difference between the effect of the lending policies of cooperative societies and other credit windows available to small and medium scale enterprises.
The present section constitutes the introduction to the study while subsequent section examines the conceptual and theoretical underpinnings as well as analyzes findings relating to the study. The last section of the study is devoted to summary, conclusion and making recommendation as related to findings.
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2.0 Literature and Theoretical Framework
Cooperative movements are among the largest organized segments of civil society, and they play crucial roles across a wide spectrum of human aspiration and needs. Cooperatives provide vital health, housing and banking services; they promote education and gender equality as well as protect the environment and workers’ rights.
The U.S.A Cooperative Business Survey Report (2005) revealed that the economic impact of U.S –based cooperative businesses is significant, reflecting the ubiquity of co-operatives, the large number of Americans who are their owners or customers, and the role they play in generating business activity, including jobs and economic growth. For the six key sectors that are the focus of this report, agriculture, credit unions, farm credit, electric utilities, grocery and housing, the data are impressive. From the report, there are 21,367 cooperatives in the six sectors. These cooperatives have more than 127.5million members. Cooperatives in these six sectors employ considerably more than 500,000 Americans, with aggregate payrolls of more than $15 billion annually. These cooperatives generate total annual revenues in excess of $211.9million. Among individual sectors Agriculture co-operative for instance has a gross business volume of more than $111 billion per year and 2.8 million members. The Farm Credit System has approximately $125 billion in assets and $96 billion in outstanding-loans.
Kevin, Louis and Mark (2000) using a seven-nation (Australia, Finland, Greece, Indonesia, Mexico, Norway, and Sweden) sample, found that entrepreneurs from feminine, collective, and uncertainty-avoiding societies have a greater appreciation for the strategic importance of cooperative strategies than their counterparts. Moreover, entrepreneurs from feminine societies place greater emphasis on partner commonality in terms of objectives and values to ensure cooperative success, whereas those from individualistic societies emphasize contractual safeguards.
According to Narayan and Petesch (2009) co-operatives are in many countries playing significant social and economic parts in national economics, thus ensuring not only personal development a reality, but contributing to the well-being of the entire population at the national level. Co-operatives have significantly contributed to economic growth throughout the world. Furthermore, the United Nations estimated in 1994 that the livelihood of nearly 3 billion people, or half of the world’s population, was made secured by co-operative enterprises. Nearly 800 million individuals are members of cooperatives today, compared with about 184 million in 1960. They account for an estimated 100 million jobs and are economically significant in a large number of countries providing foodstuffs, housing, financing and a wide variety of consumer services as put by International Labour Conference, Report (2001)
The major emphasis in Cooperative according to Akinwunmi, (2006) is oneself-help, thus people cooperate because they realize that it is extremely difficult to achieve some goals by doing it alone. Asaolu (2004) also argued that the cooperative society is potentially an important instrument of social transformation, especially in the rural areas as they have proved to be useful in achieving increasing domestic production of food, industrial raw materials, manufactured products and equitable distribution of farm inputs, farm products and other commodities that are central to MDGs. This paper believes that Cooperative financing are the most practical tools to adopt to meet the needs of the people in all spheres of development.
2.1 The Millennium Development Goals
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To tackle the complex phenomenon of poverty among others, in the year 2000, the United nations agencies collectively identified a concise set of eight Millennium Development Goals (MDGs) such as to eradicate extreme poverty and hunger, achieve universal primary education; promote gender equality and empower women; reduce child mortality;improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and develop a Global Partnership for Development. These objectives have become important tools for Cooperation in support of national polices to reduce and eliminate poverty, as regard the target of halving extreme poverty by 2015. Unfortunately, the task is huge and poverty is gaining ground. It is generally questioned whether financially sustainable microfinance operations reach the “near poor” and the “upper poor” as posited by Yunus (2008) The answer to this key question has profound implications for the relevance of microfinance to the global achievement of the Millennium Development Goals (MDGs) by 2015 which encapsulate seven key agenda as noted above.
2.2 Concept of Poverty
Poverty according to Townsend Cited in IPC (2006) is basically a condition of deprivation experienced by human beings characterized by a situation whereby resources of individual or families are inadequate to provide socially acceptable standard of living. A poor person is believed to typify someone who does not have enough to eat, vulnerable to high mortality rate; (low life expectance) low educational opportunities exposed to poor drinking water; inadequate health care, unfit housing and lacks active participation in decision making process within his/her environment. Oyeasnmi etal (2010).
Poverty from a national perspective is a reflection of glaring defect within an economy as evidenced in mass penury, pauperization of the working class, mass unemployment and poor welfare service. The Central Bank of Nigeria (CBN)/ World Bank 1999 described poverty as a vicious circle, that manifest in of underdevelopment which keeps the poor in a state of destitution until the circle is broken (CBN 1999).
The level of income, access to credit as well as purchasing power are often combined with selected social indicators including access to health care delivery, education and basic infrastructure, to determine or measure extent of poverty. Previous literatures have identified specific benchmarks to measure poverty level including Sen index, PX weighted measurement, Human Development Index, Food Security Index (FSI) Integrated Poverty Index (IPI), Basic needs Index (BNI) Relative Welfare Index (RWI), the Physical Quality of Life Index (PQLI) and the Sustainable Fisheries Livelihood Approach (SFLA); World Bank (1996) Oyesanmi et al (2010) and UNDP (2006) All these studies study however limit themselves to accessibility of credit for undertaking sustainable venture as a measure poverty reduction. The extent of success attained by a given poverty alleviation medium has not be given the level of attention it deserves especially as it relates to its efficacy.
2.3 Nigerian Cooperative Development Policy: Highlights and Problems
The Federal Ministry of Agriculture and Rural Development (2002) issued a policy on cooperative development in August 2002 to facilitate economic development in Nigeria. The policy takes cooperatives as unique organization with both social and economic objectives, uphold the principles of cooperatives as adopted by ICA, 1995 and adopt cooperatives as a vehicle for national development. The policy reviewed the performance of cooperative sector since the inception of formal cooperation in Nigeria in 1935.
Highlights of the performance of the cooperative sector to date include among others:
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• Development of export crops production in quality and quantity leading the way to foreign exchange earnings from cocoa, palm produce, groundnuts, cotton, rubber etc.
• Minimization of exploitation of producers by middlemen and traders.
• Development of indigenous banking which favorably compete with foreign banks and break their monopoly in financial intermediation. We have cooperative bank (now Skye Bank, Nigerian Agricultural Credit, Cooperative Rural Development Bank (NACRDB ) etc.
• Mobilization of enormous financial resources from small cooperative savers thus creating thrift and credit systems that have helped millions of small scale industrialist to establish businesses and become house owners.
3.0 Methodology
The research techniques adopted in this study was basically designed to achieve the stated objective. Survey research design was chosen with complementary application of secondary data given the nature of the sampled elements and the variables that are being studied without making any attempt to control or manipulate them. .Data were collected from a sample of cooperative stakeholders in Oyo state to determine the relationship between Cooperative method and MGD relating to poverty reduction in Nigeria. The independent variable is Cooperative financing method while the dependent variable is the poverty reduction. Relationship between cooperative financing and poverty reduction was premised on the extent to which selected (sample) members of the cooperative societies apply their financial assistance to run small and Medium scale enterprises (SME). In order to test the extent to which cooperative financing has aided participating SME owners descriptive statistics and analysis of regression statistics were employed using, the following model/ equation:
Y = α+ β1X1+ β2X2+ β3X3+ β4X4+Ei
Where Y= The dependent variables i.e periodic earnings of participating SME owners.
α= Is the intercept of the regression line which means the earnings of the SME owners when all others factors
affecting operations are held constant.
β1 = The slope of the regression line when only variable X1 (Capital base) is changed with all other variables held constant.
β2 = The slope of the regression line when only variable X2 (working capital) is changed with other variables held constant.
β3 =The slope of the regression when only variable X3 (Cooperative loan) is changed with all other variables held constant.
β4 =The slope of the regression line when only variable X4 (other financing sources) is changed with all other variables held constant and /ei= stochastic error term.
The study area was restricted to ten-major cities and towns in Oyo State Nigeria. The cities and towns which were randomly selected out of many cities and towns that made up the thirty-three local government area of Oyo State include Ibadan; Ogbomoso, Shaki, Iseyin Oyo, Lanlate, Igbo-Ora, Igboho, Fiditi and Moniya. The choice of Oyo-State was informed by the prevalence of cooperative activities as a means for
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generating self-help financing among artisans; farmers, civil-servants, traders and small scale business-owners in these areas. For effective coverage and cost minimization a random sampling technique was used to select a total of twenty-five cooperative societies while a purposive sampling technique was adopted in selecting five respondents from each society.
Administered questionnaire is designed to solicit respondents’ opinion on the perceived potential benefits of cooperative financing as tools for economic empowerment, comparative access to micro-credit between cooperative window and other conventional financing sources; and its effectiveness as a means for poverty reduction.
The return rate for completed questionnaire was 83 percent as we were able to get back 104 usable questionnaire out of 125 personally administered to our respondents which were employed for final analysis in this study.
Data collected from the questionnaire were analyzed, summarized, and interpreted accordingly with the aid of descriptive statistical technique using simple percentages. A non-parametric statistical test; Chi-square was used to test the formulated hypothesis. Symbolic representation of chi-square is given below:
X2 = ∑(fo-fe)2
Where X2 = The output of the Chi-square
Fo = Frequency observed
Fe= Frequency Expected
The test adopted 95 confidence level where the degree of Freedom is determined using (r-1)(c-1) with r= row total, c= column total and level of significance = 0.01, Critical region= X2t(0.01,(r-1)(c-1), The basis for rejection or acceptance of null and alternate hypothesis is as follows, If X2t >X2 while X2
c represent Chi-square calculated Accept Ho, otherwise when X2c>X2t reject Ho, X2t represents chi-square tabulated.
The trends patterns and relationship among data were identified and interpreted.
4.0 Result and Discussions
The study examines the impact of cooperative financing on MDG of poverty alleviation and investigates the extent such cooperative strategy has been able to influence poverty level. Special statistical package such as the SPSS was employed using the regression analysis to run an ordinary least square of study variables. Furthermore a non-parametric statistical test, that is the chi-square was also used to test formulated hypothesis. Findings from the three objectives and research questions are presented below:
4.1 Relationship Between cooperative societies and poverty alleviation in the study area:
The coefficients of the regression equation from the analysis of the study variables are presented in tables 4.0 and 4.1
Table 4.0 Coefficient of the regression equation
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Variables Coefficients Error t-stat P-value Capital Base(X1) 1.076 0.123 8.771 4.22E-15 Working Capital (X2) 0.284 0.302 0.942 0.348 Cooperative financing (X3) 0.793 0.094 8.476 2.33E-14 Other financing (X4) 0.309 0.111 2.784 0.006
From the result generated above; the initial regression coefficient equation now reduces the study regression equation to:
In particular cooperative financing (X3) has the highest positive coefficient of 0.793 out of the three operational financing sources namely, working capital; cooperative finance and other financing.
A test of significance formulated to predict the participants earnings adopts the ANOVA-test and found out the following:
Table 4.1 ANOVA scores on the Regression Equation.
Df Sum of squares Means square F Regression 4 1.83E+12 4.57E+11 1508.477 Residual 146 `4.43E+10 3.03E+08 Total 150 1.87E+12
From the table 4.1 it is evident that F-cal (1508.77) is significantly higher than F-tab (5.1785), hence we reject the null hypothesis and accept the alternative hypothesis which states that there is a significant difference between the earnings of sampled SME using cooperative financing and those who do not
4.2 Results of the questionnaire administered are presented in tables 4.2 and 4.3
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Table 4.2
Perception of Cooperatives Potential Benefits
Economic empowerment through cooperative financing method
AGREED
UNDECIDED DISAGREED
40 38.46%
49 47.12%
06 5.77%
07 6.73%
02 1.92%
Cooperative as major providers of fund to poor and small business
36 34.61%
52 50.0%
03 2.88%
08 7.69%
05 4.81%
Cooperative as widely spread 32 30.76%
48 46.15%
08 7.65%
12 11.54%
04 3.855%
Preference for cooperative loan by the poor
25 24.04%
44 42.31%
11 10.57%
08 7.69%
16 15.38%
Convenient credit access in cooperative as compared to bank loans
28 26.92%
51 49.04%
06 5.77%
05 6.25%
14 13.46%
Source: Field Survey 2011
From the table above it can be seen that 85.58% agreed in the economic empowerment capacity of cooperative, 8.65% disagreed while 5.77% were neutral, showing that cooperative method has capacity for economic empowerment, 84.61% agreed that cooperative is a major provider of fund to the poor and small business while 12.5% disagreed and 2.88% were neutral indicating the significance of cooperatives as major provider of capital for the poor and low income group. 60.6% attested to the widespread acceptance of cooperative finance, 79.055 saw cooperative as a widely spread MFIs, 15.39% disagreed while 7.65% were neutral supporting that cooperatives are common financing tools 66.36% of the poor preferred cooperative loan to bank, 23.07% disagreed while 10.57% were neutral an indication that cooperatives loan is often preferred by the poor than banks-credit 75.96% agreed to the convenience as regard to access to credit in cooperative, 19.71% disagreed while 5.77% were neutral which proves that cooperative method provides convenient access to micro credit, findings from the responses to the questionnaire indicate to a large extent the positive perception of potential benefits that the poor and low income derive from cooperative credit window. This findings also buttressed significance of cooperative financing as tools for poverty alleviation.
Table 4.3
Impact of Cooperative Financing as tools for achieving MDG Poverty Reduction
Agreed
Neutral Disagreed
Assessment of Cooperative financing of promoting MDG
20 19.23%
60 57.69%
08 7.69%
12 11.54%
04 3.84%
Cooperative method as tool of MDG relating to poverty
24 23.06%
48 46.15%
18 12.30%
18 12.30%
08 7.69%
10. Capacity of Cooperative method for MDG
14 12.98%
55 53.36%
09 7.21%
20 19.23%
06 3.36%
Source: Field Survey 2011
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From the above table, it can be seen that 76.92% agreed that cooperative method possesses power of promoting MDG 15.34% disagreed while 7.69% were neutral, showing that Cooperative method has power for promoting MDG. 69.21% agreed on Cooperative method as a veritable tool of achieving MDG relating to poverty and 20.19% disagreed while 10.6% were neutral an indication that cooperatives is a veritable tool of achieving MDG relating to poverty. 66.34% agreed on that cooperative finance that cooperatives has the Capacity for MDG relating to poverty and reduction 25.0% disagreed while 8.65% were neutral; an indication that cooperatives have the capacity for MDG objective of poverty reduction relating to poverty.
Test of Hypothesis
Ho1: There is no significant relationship between corporative financing and poverty reduction. The result of the Chi-square analyzed to measure discrepancies between the observed and expected frequency as well as the level of significance of the tested hypothesis as regard findings from tables 4.2 and 4.3 are presented below
Since X2c = 491.27 Critical region = X2 t(0.01,4)=13.2767 level of significance: 99%
Hence, X2c > X2t i.e. 491.27 > 13.2767
Statistically; findings from the above indicates that expected value is greater than observed value, with calculated X2cal 491.27 being greater than tabulated X2tab 13.2769 thus one can conclude that the expected value remain significant at a critical level of 99%; an indication that cooperative financing has the tendency to reduce poverty if properly harnessed.
HYPOTHESIS ll
HO2: Cooperative financing method will not facilitate MDGs objective relating to poverty eradication.
From the results and findings in tables 4.2 the following Chi square table was constructed to test hypothesis ll at 99% level of significance:
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Findings from the table are similar to the above and indicate that we reject Ho, and accept H1 thus a conclusion can be drawn that proper Cooperative financing method will facilitate MDGs objective relating to poverty eradication.
5.0 Summarize, Conclusion and Recommendation
The summaries of all the findings revealed that cooperative method has economic impact and is a veritable approach to poverty reduction in line with the earlier studies (Akinwunmi 2006, Oludimu & Fabiyi 1993). Nigerian government is reluctant to use cooperative channel of micro credit in line with world feeling on cooperative model. While the stakeholders perceived Cooperatives as the bank for the people providing financial assistance to the poor. Our findings also indicate that Cooperative strategies would make positive impact on the achievement of MDGs, because more than other financing windows the low income earners and the poor it provides a widely spread, veritable and easily accessible credit medium in Nigeria. Apart from the convenient access to credit afforded by the Cooperative scheme, there is no problem of location and identification of loan beneficiaries; a factor that has constituted loan recovery problem and incidence of non-performing loan in kindred financial institutions. However, there is the need for constant review and updating of Cooperative policy and law to meet the world dynamics.
According to the United Nations Millennium Summit in the year 2009, an important part of the preparation for the achievement of these World goals is to make micro credit available to over 50% of the world’s population. The study concludes from the extensive literature review on the significance of cooperatives to poverty eradication and concludes that it is a powerful tool for achieving MDGs. Despite the understanding of the developmental potentials of Cooperatives evidence , government readiness to adopt the Cooperative strategies for micro credit delivery is yet to be observed. Instead, alternative economic groups have always been organized by the Government to deliver micro credit to the target poor.
In the light of the above, the following suggestions may be found useful:
• Government should integrate Cooperative Financing Method in its Microfinance policy and specify the microfinance role of Cooperative movement.
• Government should include Cooperative strategies in MDGs plan so as to cater for the large percentage of the poor and low income group that belong to Cooperatives.
• Government should adopt policies and a legal framework that support cooperatives and are consistent with their nature and values.
• The institutional framework capable of providing rapid, simple and affordable registration process of cooperatives should be put in place.
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• To achieve the most effective polices, governments should consult cooperative and workers’ organizations when drafting or revising legislation or regulations that affect the work of members and the capacity of co-operatives to create employment and income.
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Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 11, 2011
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BRIEF BIOGRAPHY OF AUTHORS
1. DR ONAOLAPO ADEKUNLE RAHMON is a Senior Lecturer in the department of Management and Accounting, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has his PhD in Management Science with specialization in Financial Management. He is an associate member of the Chartered Institute of Bankers of Nigeria (CIBN). His research interests include Banking, finance, Investment and development-economics.
2. MR OLADEJO MORUFU OLADEHINDE is currently a lecturer 1 in the department of Management and Accounting, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has MSc in Accounting, MBA and BSc in Accounting from Olabisi Onabanjo University, Ago Iwoye- Ogun state Nigeria. He is an associate member as well as examiner to both the Institute of Chartered Accountants of Nigeria (ICAN), and the Chartered Institute of Taxations of Nigeria (CITN). His research interests include accounting information system, Financial Institutions Analysis and electronic payment system.
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