AN ANALYSIS OF COOPERATIVE ACTIVITIES IN FINANCING RURAL INVESTMENT (A CASE STUDY OF SOME SELECTED COOPERATIVE SOCIETY IN ISIALA NGWA L.G.A OF ABIA STATE)
TABLE OF CONTENTS
Cover Page - - - - - - - - i
Title Page - - - - - - - - - ii
Approval Page / Certification -- - - - - iii
Dedication - - - - - - - - iv
Acknowledgment - - - - - - - v
Table of Content - - - - - - - vii
1.0 Introduction - - - - - - - 1
1.1 General Overview of the Study - - - - 1
1.2 Statement of the Problem - - - - - 4
1.3 Objective of the Study - - - - - 6
1.4 Scope of the Study - - - - - - 7
1.5 Research Questions - - - - - - 7
1.6 Significance of the Study - - - - - 7
1.7 Limitation of the Study - - - - - 8
1.8 Definition of Terms - - - - - - 9
2.0 Literature Review - - - - - - 11
2.1 Introduction - - - - - - - 11
2.2 Investment Profit - - - - - - 14
2.3 Cooperative as Instrument for Development - 16
2.4 The Use of Financial Analytical Tools - - 18
2.5 Financial Problem of Rural Investment - - 31
2.6 Prospects of Rural Investment - - - - 34
References - - - - - - - 38
3.0 Introduction - - - - - - - 39
3.1 Research Design - - - - - - 39
3.2 Primary Source - - - - - - - 39
3.3 Secondary Source - - - - - - 39
3.4 Population and Sample Size - - - - 40
3.5 Method of Investigation - - - - - 41
3.6 Conduct of Field Work - - - - - 42
4.0 Presentation and Analysis - - - - - 43
4.1 Presentation of Data- - - - - - 43
4.2 Analysis of Data - - - - - - 49
4.3 Interpretation / Decision - - - - - 50
5.0 Findings, Recommendation and Conclusion - 52
5.1 Summary of Findings - - - - - - 52
5.2 Recommendation - - - - - - 56
5.3 Conclusion - - - - - - - 60
Bibliography - - - - - - - 62
1.1 GENERAL OVERVIEW OF THE STUDY
Rural areas of Nigeria which house the majority of Nigerians are still plagued by a myriad of problem of under developed (Umebali 2000:04).
Among others these included the following impediments:
1) Low capital base
2) Low level of income and productivity
3) Poor basic infrastructural facilities
4) Absence of non agricultural employment
5) Social welfare services, rapid rural urban migration trends, lack of skilled manpower and low level of political power.
Among these arrays of problems, however, the issue of low capital base and low-income level appear to be most dominant and pervasive problem of the rural communities and local government area of Nigeria.
This is an essentially because capital base and income usually create economic environment for provision of funds which are very much needed for finance, most of the other problems of rural development which do not deal effectively with the issue of funding are not likely to achieve the desired results.
Several programmes mounted by the federal and state government have not made difference in the lives of majority of rural dwellers in Nigeria. Some of the programmes, industrial development programme market development programme, programmes for promotion to access of rural communities to credit facilities education, health and welfare programme communities development programmes, directorate for foods, roads and rural infrastructure (DFRI) programmes state rural development authorities the better life for rural woman programmes and the family support programmes.
Although these program have achieve their specific have remained largely unsolved. A classical economic theory recognizes the different between developed care and depressed periphery of any economy. It is believed that the gap will continue to widen and can only be reversed by the operative of economic forces. These force occur when the clear production factors in the developed care redirect industrial location to rural areas with cheaper land and labour. This will how withdraw farmers from the chronically over manned agricultural industrials it is only them that development shift base rural areas.
The apparent death of finance to rural area and its near exclusive from commercial bank financing has been observed. The central bank of Nigeria monetary circular guiddions that recommend minimum of 20 percent of bank total loans to the sector not withstanding.
It is widely known and confirmed by Uzoagu (1981) that banks meet the credit needs of large scale government and private enterprise, but have not involved any meaningful programmes for servicing the credit needs of highly rural area. And finance is the life wire of any enterprise and the rugged and doggedness of the rural areas will make no ledge way without it.
It is the recognition of the government integrated effort towards rural areas and the apparent inadequacy of credit to this preferred sector that can best justify a study of this nature.
1.2 STATEMENT OF THE PROBLEM
The Nigerian industrial sector has suffered several set backs in the recent years. Inadequate and lack of infrastructural services have virtually laid the economy prostrate with severe consequences for the manufacturing sector which should be the engine of growth and should therefore play this vital role effectively and as such has been enable to contribute adequately meaningful to G.D.P some of the major problem include.
1) The weakening consumer purchasing power, which took a more ominous dimension in the recent years as the effective consumer demand got badly.
2) Low capacity utilization, poor infrastructural facilities.
3) The high cost of finding manufacturing business
4) Poor management practice and low entrepreneurial skill arising from inadequate education and technical background of many rural investors / promoters.
5) Incidence of multiplying of regulatory agencies and taxes which as always resulted in high cost of doing business.
6) The difficulties encountered in accessing proper funding for manufacturing in the economy particularly rural investments.
7) The alter neglect of the rural investment in the past particularly lack of access to cost effective finding virtual absence of linkages with the bugger industrial and lack of patronage for locally produced goods had led to the collapse of the sector.
8) The infuse of take and substandard products under involving dumping and malpractice at over parts place over imported goods at undue advantage over locally manufacturing goods
1.3 OBJECTIVES OF THE STUDY
The broad objectives of the research are to study cooperatives as instruments for financing rural investments. The specific objectives are;
1. To determine the source of funding these rural investment through cooperative society.
2. To access the profitability of the study
3. Identify the problem facing the cooperatives
4. To study the role of the institutions in enhancing cooperative development in the area of study
5. To make policy recommendation based on findings.
1.4 SCOPE OF THE STUDY
The study covers the role of cooperative society in promotion rural investment in Abia state. Apart from the financial institution that grant credit to cooperative society in Abia state the study is focused on the activities of cooperative societies in Abia state.
1.5 RESEARCH QUESTION
1. What is the major problem facing the society?
2. How the government been of any help to the society?
3. What help does the society render to its members?
4. Is cooperative auditor a professional or mediocre (help – backed)?
5. When is it appropriate to audit?
1.6 SIGNIFICANCE OF THE STUDY
A cooperative as a voluntary organization is formed primarily to serve the interest of members. This interest is usually economic and in addition some times social. In other first instance, people must be socially linked by circumstance such as some work place which makes it a futile ground for group formation of thrives. In the present situation, we are concerned with the Dr. Orji Uzor kalu transport loan scheme employees our interest is to examine how the company contribute to the economic development of the members the funding of this research work. It is believed will be a useful guide to the employees of other companies who are contemplating forming an organization of this type. The government and other bodies interested in human cooperation stand to benefits from the funding. Also other researchers and academicians will find material quite valuable.
This study as carried out within the limits imposed by time and financial constraints. As a results, this study was limited to developing areas through human was the attitude of the respondent were sceptical about the use of the data they were asked to supply would be put.
This is equal to any age long apathy of an average Nigerian man towards investment which is often erroneously linked with tax assessment. Another problem encounter by the researcher was as a result of mass literacy prevalent among the cooperatives societies in rural areas; many willing correspondent were handicapped by their inability to read and correctly complete the questionnaire.
1.8 DEFINITION OF TERMS
The definition of some of the basic terms as used in the text is as follows
A cooperative society: This is an association of person who have voluntarily joined together to achieve a common end through the formation of a democratically controlled organization making contribution to their capital required and accepting a fair share the risks and benefits of the undertaking in which members actively participate.
Agricultural cooperative: These are cooperative which embarrassed all classes of people earning a livelihood on the land e.g. farming societies, production societies marketing cooperatives etc.
Association of patrons not investors: these means that the members are of the same time the customers cooperative as it depends on the patronage for its survival and growth.
Cooperation: this means common association of person for common benefit.