MICRO CREDIT SCHEMES PROBLEMS AND PROSPECT
(A CASE STUDY OF SELECTED COOPERATIVE SOCIETIES IN IMO STATE)
The major purpose of this is to determine micro credit and problems and prospect on selecting co-operative societies in Imo states. The population of the comprises of 100 members in Orbown multipurpose co-operative society Owerri Nkwoji and Nwanyiorna farmer multipurpose co-operative society Akado Ikeduru all in Imo state. The sample of the study was 30 staff drawn from the total population of 100. five research questions were formulated to guide this study. A 10-questionnaire was structured, validated and tested for its reliability. The percentage method was used to analysis the research question. The major finding of the structure are micro credit scheme promotes the development by the provision of capital funds other inputs Micro credit derives support from government and non government organization. Micro credit scheme support the member in developmental prospects. It was concludes Micro credit in cooperative societies is faced with problems despite its numerous prospects and development efforts it was recommended in the study that:
1. There should be alega frame work for loan default.
2. That a committee should be established to monitor investment opportunities of individualist for proper growth and development.
TABLE OF CONTENT
Title page- - - - - - - - - i
Approval page- - - - - - - - ii
Dedication - - - - - - - - iii
Acknowledgement - - - - - - - iv
Abstract - - - - - - - - - v
Table of content - - - - - - - vi
1.0 Introduction - - - - - - - 1
1.1 Background of study - - - - - 3
1.2 Statement of the problem - - - - 6
1.3 Objectives of the study - - - - - 7
1.4 Research of questions - - - - - 8
1.5 Significance of the study- - - - - 9
1.6 Scope of the study - - - - - - 10
1.7 Limitations of the study - - - - - 10
1.8 Definition of terms - - - - - - 11
2.0 literature review - - - - - - 13
2.1 Meaning of Micro credit scheme - - - - 13
2.2 Aims And objectives of Micro credit scheme - 14
2.3 Types and forms of Micro credit scheme- - 15
2.4 Roles of Micro credit scheme in Nigeria - - 16
2.5 Problems associated with Micro credit scheme
in Nigeria- - - - - - - - - 18
2.6 Prospective of Micro credit scheme in Nigeria - 20
2.7The impact of Micro credit scheme of cooperatives. 22
3.0 Research design and methodology- - - 24
3.1 Introductions - - - - - - - 24
3.2 Research design - - - - - - 25
3.3 Source / method of data collection - - - 26
3.4 Population and sample size - - - - 26
3.5 Sampling techniques - - - - - 27
3.6 Method of data - - - - - - 28
4.0 Presentation and analysis of data- - - 29
4.1 Introduction - - - - - - - 29
4.2 Analysis of data - - - - - - 29
4.3 Interpretation of results- - - - - 35
5.0 Summary, conclusion and recommendation - 38
5.1 Summary findings- - - - - - 38
5.2 Conclusion - - - - - - - 39
5.3 Recommendation Bibliography - - - 39
References - - - - - - - 41
Micro credit schemes end up co-existing with these entrenched structures, serving as a safety not for people exiled and marginalized by them but not transforming them. No Paul not for wits, micro credit I s not the key to ending poverty among the 75 million people in Andhra Pradesh. Dream on.
Perhaps one of the reasons there is such enthusiasm for micro credit in establishment circles these days is that it is a mark based mechanism that has enjoyed some success where other market based programs have crashed. Structural adjustment programs promoting trade liberation deregulation and privatization have bought greater poverty and inequality to most parts of the developing world over the last quarter century, and have made economic stagnation a permanent conditions. Many of the same institutions that pushed and are continuing to push these failed macro programs (sometimes under new labels like party reduction strategy papers”). Like the world Bank, are often the same intuitions pushing micro credit programs viewed broadly micro credit can be seen as the safety not for mivions of people destabilized b the large-scale macro failures engendered by structural adjustment.
There have been gains in poverty reduction in a few places like China, where contrary to the myth, state directed macro policies, not micro credit, have been central to lifting an estimated 120 million Chinese from poverty.
So probably , the best way we can honour Muhammed Vinus is to say yes, he deserves the Nobel price for helping so many women cope with poverty. His boosters discredit this great honor and engage in hyperbolx when they claim he invented a now form of capitalism or a social entrepreneurship that will be the magic bullet to end poverty end promote development.
1.1 BACKGROUND OF THE STUDY
Micro credit scheme, which is a programe for business support and lending scheme, have some tremendous prospects in the economy as well as some problems. Micro credit which is often an interest free loan for formation and stabilization of self growth have some explicitly objective which ranges from poverty reduction by providing small amount of credit to the poor to generate self employment in income corn activities.
Global experience with Micro credit scheme reveals that it increases productivity by creating employment and developing human capital. Micro credit scheme has two important feature that attract the poor, which Are:
· Borrowers are allowed to deal with financial institution through a group and members select their own groups base lending reduces loan default cost by expecting peer pressure repay loans-
· The non government organization operating Micro credit scheme pool resources and diversity the risk of leading by rending across communities and groups thus, enabling it to provide loan at an affordable priced, Yunus (1996).
In. Nigeria, micro credit program were developed in response to the failure of traditional financial institution such as Agricultural development banks, to serve the credit need of the poor and small rural producers. The comparison of their performance relative source of their strength and weakness and will allow policy makers to Asses the cost effectiveness of affirmation programmes serving different client groups.
Basically, in Nigeria, Micro credit scheme follows the following form:
• Rural support Micro credit scheme
• Vocational training young people Micro credit scheme
• Enhancement of the disable Micro credit scheme
· Agricultural Micro credit scheme
• Poverty alleviation Micro credit scheme etc.
Interestingly, some Micro credit scheme in Nigeria operates under government regulations, tike banks whole some do not, micro credit institution must thus be evaluated against the performance of alternative instrument in Nigeria includes: cooperative societies and other financial institutions.
Micro credit scheme in Nigeria donors ranges from international organizations government, non governmental organization multinational companies, individuals etc. these donors supply to a large extent available subsidized funds to help promote institutional developments. These are two types of subsidies:
· Financial and economic, if a micro credit program is not cost effective it will require financial subsidies to continue operating. In addition, if the cost of funding for or fending is cheaper than the opportunity cost of these funds, the micro credit program may received both types of subsidiaries and they are both source of concern for its long-run viability.
· Micro credit scheme principally are or two types namely external end internal Micro credit scheme. The scheme in internal when the borrowers are allowed to benefit from the scheme within the micro credit institution. It is external when the beneficiaries or borrowers can some from outside the micro credit institution.
• Micro credit scheme in Nigeria is often affected by some problems, which include borrowers default and other environmental and political problems.
1-2 STATEMENT OF THE PROBLEM
Recently, there has been a grooming establishment of some Micro credit scheme in our different areas and regions, most people benefit from this scheme and at the same time some problems arise both on the part of the beneficiaries and the government or cooperate organization that establish these schemes.
In most rural and urban areas, Micro credit scheme prepared the poor people and assist them in economic activities while some problems to the development of Micro credit scheme. This research major statement of the problem that is associated with Micro credit in economy and how does people benefit from Micro credit scheme the general prospects of Micro credit scheme in the economy forms the statement of this research study
1.3 OBJECTIVE OF THE STUDY
The main purpose of this research study was to
investigate the problems and prospects of the Micro credit scheme in some selected cooperate organization in Imo state.
This study will investigate among other things which includes the following:
> The concept of Micro credit scheme and meaning
> The aims and objectives of Micro credit scheme
> The types and forms or Micro credit scheme
> The roles of Micro credit scheme m Nigeria
> The problem associated with micro credit scheme
> prospects of micro credit scheme in Nigeria
1.4 RESEARCH QUESTIONS
The following research problems associated with the research study.
> What are the extent of Micro credit scheme establishment in Nigeria?
> Who are really the promoters of Micro credit scheme in Nigeria?
> What are the contributions Micro credit scheme to rural farmers and Food production?
> What are roles of Micro credit scheme in the development of small scale industries?
> How does Micro credit scheme help to provides equality among women in the economy?
> What are the various factors that militate against the development of Micro credit scheme
1.5 SIGNIFICANCE OF THE STUDY
This research study on Micro credit problems and prospects Is of immense importance in the following ways and perspectives:
•> This study will present available data on how the people
benefit from micro credit in the development of the
•> This research study will serve as a reference materials for student carrying out research on micro credit problems
•> The recommendation that will be provided in this research work will often sound advice on the most effective ways operating a Micro credit scheme for the benefit of the
•> The study will instruct the students and the genera! Public the advantage of micro credit scheme and how to apply and benefit Prom Micro credit scheme in order to improve their living standard
1.6 SCOPE OF THE STUDY
This study is determinates to the problems and prospect of Micro credit scheme In some selected cooperative organizations in Imo state.
The study will source for available materials in most research academic libraries within the federal polytechnic Nekede of which the researcher is a student to make necessary update in the research work. This study will also select some know outstanding cooperative organizations and obtained the available data and information regarding this research survey.
More over, this study will provide all reading available data and information on micro credit problems and prospects.
1.7 LIMITATIONS OF THE STUDY
The various hindrances inherent in this research work are
· The time limit, allowed For completion and submission of this research work is limited. Moreover, the time to read for the coming Examination and carry out the research also limits this work.
· The problems of limited funds at the researchers disposal also limits this research, as there is little or no money sometimes to travel to various research end academic work.
· Another outstanding limitation of this research work bureaucratic bottleneck in some of the cooperative organizations used as cease study to give out relevant information about the operational problems and prospects of Micro credit scheme in the establishment also limits the study.
1.8 DEFINITIONS OF TERMS
CREDIT: Joana ledger-wood (2000) defines credit as a borrowed fund with specified term for repayment
COOPERATIVE: ICA (1995) defines cooperative as an autonomous associated of persons united voluntarily to meet up the common economic, social and cultural need and aspiration through a jointly and democratically controlled enterprise,
.DEVELOPMENT: Charles (2006) defines development as the complete modernization of a society entailing the conversion of a peasant society inLo and industrial one. FINANCE: Osubor and Okafor (2004) define finance as providing of money for the purpose of investing saving and immediate purchase,
MICRO: Oxford dictionary defines as a little substance or of qualities or value.
SCIENCE: Oxford dictionary defines scheme as a plan of
organization of something for getting money,
MICRO FINANCE SCHEME: is a programme of
business that has interest free loan for formation and stabilization of self growth which increases the productivity by creating employment and developing human capital in the cooperative society.