The choice of this topic, the role of federal government in cooperative financing cannot be over emphasized at the present economic situation of the country.

This is because of the fact that the issue of cooperative financing has reached all the nook and crannies of Nigeria. The past and present regime emphasized on the best way of encouraging cooperative development. Though this does not mean that the needs for cooperative development have been achieved. Rural and cooperative development have strategies and plans to help improve the living standards of the rural population.

Development and economic growth are essential to determine the standard of living of both the rural and urban dwellers. We cannot talk of development and growth in Nigerian economy without mentioning the development of our rural area. Neglecting the development of the rural area is like solving our economic problem half way. We should be wise enough to extract the experiences gained from countries like china, Malaysia, Israel, Tanzania and some of the Asian tigers , which have yielded a great deal of success in those countries . Our guest and enthusiasm towards the development of our rural cooperative base is panacea to the Nigerian economy. A well planned rural development is the answer to rural poverty, Ignorance and congestion in city centers. This will also create awareness and increase the economic standard of the rural population and it eliminates such plagues as ignorance, poverty, poor standard of living and general backwardness associated with under development.

This issue of infrastructure development which is pertinent to cooperative development will include our rural dwellers al long as the rural area are not developed. And one imagines what life would like without electricity, pipe borne water, good road, net words, facilities viewing centers and others.

Cooperative financing is a very wide one, it has two main branches that is owned and borrowed. What belong to you and what you set from another source. Owned capital is constituted by share capital and reserve mainly. While external funding comes outside the cooperative complex. Cooperative movement. The absence of effective financing is the greatest impediment to a dynamic cooperative movement in Nigerian. Once we get it right, every other thing falls in place.

1.1 BACKGROUND OF THE STUDY

Finance they say is the act of raising fund and using of funds by individuals, cooperative, firms and government organization for the day to day operation running and management of business undertaking.

Finance is the life-line of any organization. Be it profit oriented or welfare/religions organization. Finance concerns itself with sourcing, acquisition and utilization of found in organization needs to raise fund for it so effectively and efficiently deliver its goals.

Even though cooperative de-emphasis the role of capital, it is however needed seriously for the society to grow.

In discussing cooperative financing we have to distinguish between two types of capital namely:

a, Fixed capital: this is fund use in acquiring movable assets like land, buildings, machinery equipment and offices, fittings etc. It is capital” sunk” or “ Locked up” and cannot consequently be recovered easily within a short time period.

b. Operating/working capital: this is money needed to keep the cooperative going as a business concern.

1.2 STATEMENT OF THE PROBLEM

Cooperative has always been the subject of critic comment from the general public about the role the play in the socio-economic life of the populace, our issue of rural development, it is the same. In many of our rural areas, people have always been heard of civilized government and it is agents of being partial in the provision of social amenities, being responsible for the present rural urban immigration causing poor standard of living in the country.

We all know quite well that over 80% of agricultural activities in the country are done in the rural area. In the village, farmers complain of the non- availability of some essential commodities (pipe borne water, electricity and road) credit facilities such as loans from banks and so on.

1.3 OBJECTIVE OF THE STUDY

The objectives of the study include among other:

i. To ascertain how the federal Governments finance the activities of rural based cooperative societies in Imo State.

ii. To examine other sources of fund to cooperative societies.

iii. To determine government polices which aid to promote cooperative development in Nigeria.

iv. To examine how officers/managers of cooperative efficiently used the grants, loans, gift from the federal government.

v. To point out certain factors that effect mismanagement in cooperative financing.

vi. To find out whether the cooperative has access to the financial institution introduced by the government.

vii. To determine the reason people joined cooperative, is it to attract government legacy (i.e. Loan and etc from the government.

1.4 RESEARCH QUESTIONS

1, How much loan has the federal government give to rural based cooperative societies over the period of 2002-2010?

2, Is there any project facing cooperative financing?

3. Does the federal government contribute in financing rural based cooperative societies in Imo state

4. Does the loan provided by the federal government to rural cooperative societies attract higher or low interest rate?

1.5 SIGNIFICANT OF THE STUDY

In this study, the research has set out to examine the role of federal government in cooperative financing of Imo State.

With the aid of highlighting the inherent problems encountered in management of cooperative financing. It is expected that this work will be interested to general public, managers, cooperators and the government.

This study is expected to rekindle their interest more, and they will take note of various recommendations mentioned here and help steer the government towards forming a sound financing institution that will help the development of cooperative and rural areas at large.

This study will also help to serve as literature to individuals or cooperate boodles who want to carry further research on the role of federal in cooperative financing.

1.6 SCOPE OF THE STUDY

Therefore, for federal government to contribute to the cooperative financing of the rural based cooperative societies in Imo state, it must do it through the development of our Agricultural sector. Development starts first with the development of the agricultural sector since most poor people earn their living from agriculture.

Mores, increasing the agricultural activity in the rural areas permit the release of labor from agriculture to industry, which leads to increasing returns and subsequently yields to an increase in income per heal and greater capital; accumulation.

Thus the role of federal government in Imo state where the majority of our people lives by subsistence farming, federal government need to encourage them to commercialize their farming by:

- Provision of large space of land for agriculture activities, since land affects the productivity of agriculture and the development of agriculture.

- Provision of basic amenities for the effective transportation of the produce to the urban area.

- Organizing workshops and seminars for cooperative members.

- Farm tools, machineries, tractors are needed for productivity.

- It should make easier for cooperative societies to obtain credit.

1.7 LIMITATION OF THE STUDY

The limitation encountered in the course of carrying out this work include financial constraints, insufficient time the un willingness of respondents to give the researcher adequate information needed to carry out the research work.

1.8 DEFINITION OF TERMS

COOPERATIVE: Cooperative society is an economic institution which within the existing system of free competition aims to correct wholly or partly the natural imperfection of the distribution of wealth.

FINANCING: The term financing in this contest means monitoring of loan to rural farmers.

ROLES: Means functions, assistance, or helping hand render to somebody or something.

GOVERNMENT: people in charge of a group of people in the country or state.

RURAL: It means place or village where people live and they are specializing in Agriculture. This also means that is a place where people lives with little or no access to basic amenities.