An Examination of the role of Co-Operative thrift and Credit Societies in Agricultural Financing

An Examination of the role of Co-Operative thrift and Credit Societies in Agricultural Financing. (A case study of selected Co-Operative thrift and credit societies in Enugu State.)


Agriculture constitutes a very important position in the overall development of any nation.  That Nigeria is a nation that should depend on agriculture for it’s development is well known. 

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This statement cannot be overstated taking into consideration the size of it’s population involved directly or indirectly in farming and the fact that we deserve most of out food and raw materials from it.  Apart from these other conventional roles ascribed to the agricultural sector are the provision of employment opportunities and research enhancement.From the foregoing, efforts have been made since independence by the federal and state governments to promote the agricultural sector.  Some programmes and project initiated include: Operation feed the Nation, National Accelerated Food Production Programmes, Road  and Rural Infrastructure; River Basin Development Authority and Agricultural Development projects.  The efforts to boost Agricultural production did not yet stop at this level, “the emergence of the Federal Department of Agriculture was yet another move by the federal government plan.” (EMENIKE: 1985).  Through these programmes had achieved some measure of success, the result so far has not matched expectations.

According to (AJAKAIYE 1985), a number of  reasons were usually given for the eligible success in the agricultural section.  Some of these were low level of credit to farmers, low incentives to agricultural and inadequate number of trained extension staff.  Other factors are poor infranstructural facilities and poor marketing and storage facilities.  Various measures had been adopted to address these problems yet much results is still illusive.  These measure include greater subsidy to agricultural establishment of  various research institutes and colleges of Agriculture.

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Finally, following the Stonaham’s Report, the Nigerian Agricultural and co-operative Bank Limited was set up on March 6, 1973.  The major reason is to address the problem of credit to farmers.  The question still remains whether this Bank had succeeded in achieving the said objectives and whether the lot of the co-operative societies in Enugu state has been bettered towards Agricultural financing.



2.2A    CONCEPT.

Anything could ask, what are “Co-operative through the term is frequently in use in economic literature, it is not generally understood in its socio-economic and development aspects.  It therefore requires that the terms be properly defined.  There were no national laws under which co-operatives could be incorporated, then, according to (ONUK, 1989).


Co-operatives were distinguished from other types of organization by certain characteristics such as voluntary membership, democratic control, equitable contribution to share capital and sharing of risks.


The International Labour Organization (ILO) recommendation concerning the role of co-operatives defines co-operative as “An association of persons who have voluntarily joined together to achieve a common end through the formation of a democratically controlled organization, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertakings in which the members actively participate.”  Thus, co-operatives has been described as self governing constitutions set upon the initiative of the members themselves, with the minimum of outside interference in decision making (OKONKWO 1980).  A number of organization which fulfill these conditions exist but our concern will be for organization that are registered as co-operatives under the co-operative law.



The history of co-operative movement in Nigeria dates back to the early 1930s.  During that time the cocoa farmers in what was then Western Nigeria were organized into miniature co-operative societies.  This initiative  was taken by the department of Agriculture/Land Report.


In 1993, a co-operative experts strict land F.C  was appointed to study and report on the desirability and possibility of establishing co-operatives societies in the colony and protectorate of Nigeria. The report pointed out the following facts:

  1. The objective of co-operatives, Nigeria was fit for introducing co-operative societies.
  2. The objective of co-operatives.
  3. The nature of co-operative societies.
  4. Types of co-operative societies which was most suitable.
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The report strongly recommended the formation of co-operative following the co-operative societies.  Thus (ONAH, 1975) observed that the organizational structures of co-operative societies in Nigeria follows pyramidal (tier) pattern of co-operative organization throughout the world it has a wide base consisting of primary societies which tapers through small section (secondary societies) before reaching the top (Apex organization).  The primary societies are based at the village levels.  They are grass-rooted  organizations.  The secondary societies are located in local government headquarters while  the Apex organization are located at the state headquarters.  It is important to emphasis that the structure of the co-operative credit system varies from one state to another.  Some state have a two tier system with secondary societies as the Apex institutions.


Also in some state, there are single purpose apex co-operative credit institutions and they include: Anambra, Imo, Enugu, Abia, Bauchi, Ondo,  Edo, Cross River and Bornu states with multi-purpose Apex organization that combine credit with other activities such as marketing and distributive trade.


In Nigeria, the apex co-operative financing organization can be classified into two broad categories.  These are the National co-operative financing institution which include the Nigerian Agricultural and Co-operative Bank and the  National Association of co-operative credit union of Nigeria.  Membership of the national co-operative Apex institutions is made up of secondary co-operative unions.  Membership in the union in turn is made up of affiliated primary societies while individuals constitute the membership of secondary co-operative unions.  Most co-operative societies in Enugu state fall within this category,  (OKEFIA, 1981).



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Co-operative thrift and credit societies in Enugu state were products of circumstance.  In fact, the people of Agwoffia-Owa in Ezeagu Local Government Area made the first noticeable move to establish a consumer shop during the early years of the second war.  Then shortages of consumer goods made people to realize more than ever the possible role of the co-operatives.  They secured and sold goods to members at lower prices.  The growth of the co-operative movement was followed by the Ogwoffia-village co-operative.  Early in the leads years, they came together and reside capital to build and finance a co-operative village shop to merchants in Enugu State and retail it to members at moderate prices. Though the society was faced with the problems of inadequate supplies, it was able to meet most of its commitments within months of its registration.

Today, co-operative societies in Enugu had numbered two hundred, with majority registered and committed with Agricultural financing and Development.


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