Cooperative societies

Hello students! Today, we are going to learn about a special type of business organisation called Cooperative Societies.

Imagine a group of friends who come together to solve a common problem or achieve a common goal. That's the basic idea of a cooperative!

It's different from a regular company where the main aim is to make a lot of profit for owners.

In a cooperative, the main aim is to serve the needs of its members.

Think about it like a community coming together to help each other.

A cooperative society 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.

This means it is a group of people who choose to come together on their own, without being forced. They want to meet their shared needs, whether it's getting goods cheaper, saving money, or getting loans.

They own and control the business together, with everyone having a say.

Let's look at some important features of cooperative societies:

Voluntary Membership: People join and leave as they wish. Nobody forces you to be a member. It's like choosing to join a club.

Democratic Control: Each member has one vote, no matter how much money they put in. This is called 'one member, one vote'. So, whether you contributed N1,000 or N100,000, your vote is equal to everyone else's.

Service Motive: The main goal is to serve members, not to make huge profits. If there are profits, they are usually shared fairly among members or used to improve the cooperative.

Limited Interest on Capital: Money invested by members usually gets a fixed, small interest, unlike big companies where shareholders expect huge returns.

Open Membership: Anyone who shares the common goal and can meet the requirements can join, regardless of tribe, religion, or gender.

Separate Legal Entity: A cooperative can sue or be sued in its own name, just like a company. It is seen as different from its members in the eyes of the law.

Eternal Succession: The cooperative continues to exist even if members leave or new ones join. It does not die when a member dies.

Now, let's talk about types of cooperative societies commonly found in Nigeria:

Consumers' Cooperative Society: These buy goods in bulk (large quantities) directly from producers or wholesalers. Then they sell these goods to their members at cheaper prices. This helps members save money. An example might be a group of civil servants buying bags of rice directly from a farm.

Producers' or Industrial Cooperative Society: These are formed by small-scale producers (like farmers or artisans) to help them produce and sell their goods better. They might share equipment, buy raw materials cheaply together, or market their products as a group. Think of a group of local cassava farmers working together to process and sell garri.

Thrift and Credit Cooperative Society (TCCS or CICS): These are very popular in Nigeria! Members regularly save money together. From this pool of savings, members can get loans at low interest rates when they need money for business, school fees, or emergencies. Many workers' unions or market associations have these.

Multi-Purpose Cooperative Society: As the name suggests, these combine different functions. They might save money, provide loans, and also sell goods to their members. They are like a 'one-stop shop' for their members' needs.

Finally, what are the advantages of cooperative societies?

Access to Credit: Members can easily get loans for their needs without much stress.

Cheaper Goods/Services: Consumers' cooperatives help members buy goods at lower prices.

Improved Bargaining Power: Producers' cooperatives help small farmers or artisans sell their products at better prices because they deal with buyers as a group.

Democratic Management: Everyone has a say, promoting fairness.

Mutual Help: Members support each other economically and socially.

However, there are also some disadvantages:

Limited Capital: They might not have enough money for big projects because members' contributions are usually small.

Lack of Management Skills: Sometimes, members elected to manage the cooperative might not have the best business experience.

Internal Conflicts: Disagreements can arise among members, just like in any group.

Over-reliance on Members: They depend heavily on members for patronage and funds.

Cooperative societies play a huge role in Nigeria, helping many people save, invest, and improve their living standards, especially in rural areas and among low-income earners. Keep studying hard!