Effective Administration Of Credit In Co-operative Enterprise (a Case Study Of Selected Co-oeratives In Enugu South L.g.a Of Enugu State

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The study systematically revealed the process of effective administration of credit in co-operative enterprise in Enugu south local government of Enugu state.


It highlights the process of credit administration in co-operative, which include, loan administration and assessment loan contract, supervision of credit and credit recovery.

Questionnaires were administered to the society under study. The society also was randomly selected. Out of the 20 questionnaires administered to the selected co-operative society, eighteen were returned and analysis were based on the returned questionnaire.

The study showed that co-operatives can raise fund for their activity both by internal and external source. The internal source includes, share capital, revolving fund, deposit and reserve. The external capital includes the co-operative apex, agricultural credit guarantee scheme fund among others.


The problem militating against the co-operative credit administration were discussed such as defiant economic situation prevailing in the country, high inflation rate and personnel unsound lending practice etc.

Consequently, workable recommendation were made of which if adopted will go a long way to ameliorations of the impediment encountered by co-operative in credit administration. Hence consolidating the benefit of effective credit administration among co-operative society in the area.














Effective administration of credit in the co-operative enterprise. This is a case study of the selected area of Enugu mouth local government area. The study systematically revealed the process of effective administration of credit in co-operative enterprise in Enugu south local government of Enugu state.


It highlights the process of credit administration in co-operative, which include, loan administration and assessment loan contract, supervision of credit and credit recovery.

The information as regard to this project will come from Enugu south local government area of Enugu. The research as this project will be design in such a manner that will suit the purpose of this project. With this reason, a logical procedure will be used to give a balance report and to avoid bias information


The type and nature of this research study will determine the type and source of data to be use however in the accomplishment of this study, both primary and secondary source of data will be used.

During the course of this study, interview will be conducted; this will help to analyze the data.


The nature of the research topic the characteristic of the population, the time as well as the distance which shall be covered shall determine if the population sample is going to be used in this research. The research of this study will be limited to effective administration of credit in the co-operative enterprise in Enugu south L.G.A.












Title page





Table of content




1.1 The background of the study

1.2 Statement of problems

1.3 Objective of study

1.4 Significance of study

1.5 Limitation of study

1.6 Definition of terms

1.7 Reference



2.1 The nature of the co-operative

2.2 Credit co-operative and their problem

2.3 Source of co-operative finance

2.4 The process of credit administration

2.5 The lona committee

2.6 Assessment of loan application

2.7 Terms of credit

2.8 Supervision of credit

2.9 Loan recovery

2.1.1 Credit co-operative in Enugu south  L.G.A.

2.1.2 Factors militating against effective credit administration



3.0 Research methodology

3.1 Population study

3.2 Sample size an sampling techniques

3.3 Method of data collection

3.4 Method of data analysis

3.5 Source of data



4.0 Data presentation, analysis, and interpretation

4.1 Data presentation

4.2 Data analysis

4.3 Data interpretation



5.0 Recommendation and conclusion

5.1 Recommendation

5.2 Conclusion

5.3 Biography

5.4 Questionnaires and appendix






Agricultural credit in Nigeria dates back to the 1930s. But organized credit to farmers, but it did not start until 1772 when Nigerian agriculture and co-operative bank (N.A.C.B) was established. The awareness of the serous decline in agricultural production was partly responsible for the establishment of the bank. The N.A.C.B was not the only financial institution, which provides agricultural credit. Prior to establishment of N.A.C.B, agricultural credit scheme was operated by some agencies such as the ministry of agriculture supervised scheme, agricultural credit co-operation, co-operative thrift and loam schemes, farmers multi-purpose co-operative societies. Most of the institution was not effective sources for strictly agricultural credit. There were a lot of evidences that creditors borrowed for agriculture but diverted it for another ventures. Again credits were only extended to only favorites and scarcely to genuine small-scale farmers. Besides, they could not meet the collateral and equity contribution requirement, a situation that compelled a significant proportion of the farmers to seek for other source credits. According to Ichadaba quoted from Cardoso, (1987.18) a survey carried out showed that 58% of farming related borrowing was from family and fiends, 24% from private money lenders, 15% from merchant, and only 3% is from institution for agriculture. However, while family and friends charges little or no interest, privet lenders charges exorbitant interest. Organized credit facility for Nigerian rural farming population will reduce the dependence on source other than the formal financial houses. It is against this background that the researcher is to investigate how credit will be effectively administered in co-operative enterprises. This will enable us the identify the major problems associated with credit administration and seek solution to those problem to ensure continued existence of the co-operatives.



Co-operative society mobilizes credit to their members through the saving of the members. It has been observe that they are inefficient in mobilizing and utilization of credit. Many problem lead to their ineffective mobilization of credit, they are;

 Inadequate fund for bank purpose

Inefficient management of loan

Faulty loan policy, which may sometime emphasize credit worthiness of borrowers and not the viability of project.


Credit co-operation are mere money activities without proper organization procedure and planned systematic arrangement.


Absence of regular maintaining and supervision of loan. The above problem needs to be solved for the effective performance of co-operatives



The situation of co-operatives is noting to write home about. If the co-operative should continue at this rate, they will wind up. In view of the above, solution have to be design for this problems. Therefore the objective of the study is to find out the various societies existing in the area under review. To find out various problems being encountered by this co-operative which stand to hinder their effective and efficient performance as agent of credit. Finally to make recommendation and suggest probable solution that will enable this society overcome the problem so as to function very well.



This study will assist the loan committee managers in there decision making as it concern credit policy and management of credit in form of proper assessment of loan application., proper supervision of credit and evaluation of project proposals. It will help the management to see the need to employ professional staff and lastly this study or findings will be of educational importance to the various universities, polytechnic and student of co-operative development in the various schools.



The researcher will limit this study to effective administration of credit in co-operative enterprises in Enugu L.G.A. the researcher intends to find out the available sources of fund to co-operative as well as the financial problem of co-operatives. The researcher will also find out the problem of credit administration and some factors militating against credit administration.


In the course of accomplishing this study, the resea4rher were faced with the following problems.

Finance: there was no fund to travel from one co-operative society to another, there was fuel scarcity and transport was very high, this will hinder the researchers movement

Time: the researcher will find it difficult to combine the researching work with the academic assignment due to time constraint

Lack of data: the researcher has limited Asses to official records and statistical records relevant to this study



For clarity o purpose, elimination of confusion of any kind and proper understanding of this study, the following definition of term is necessary.

1.     Credit: David W. Pearle defines credit as financing directly or indirectly the expenditure of other against future repayment. Such lending or financing is direct when a bank extends an overdraft facility to costumers who use it. It is indirect when a trader or producer supplies goods on credit.

2.     Management: administration or management is the act of attempting to archive a stated objective by directing human activities in the production of goods and services. Management unitizes the land, factory, office, machinery and other facilities at the disposal of the enterprise in most effective, efficient manner. Bob-Igwe (1993:39).

3.     Enterprises: enterprise is an economic system is which individuals are free singly or collectively to own capital and undertake economic activities within a framework of social legislation design to protect the interest of individual Hanson (1974:218)

4.     Effective: Hornby A.S. define effective in the oxford advance learners dictionary as having an effect able to bring about a result intended powerful in effect and that is efficient performance





For the fact that credit is very important in any business activity, therefore the study is focused on finding relevant solution to the following research questions


1.     What is the purpose of credit administration in the co-operative society of Enugu south L.G.A?

2.     How effective is credit administration to co-operative in Enugu south L.G.A?

3.     What problem is encountered in the administration of credit in co-operative and what is the solution to this problem?

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Effective Administration Of Credit In Co-operative Enterprise