REDUCTION OF POVERTY THROUGH CO-OPERATIVE SOCIETIES
A lot has been done by the Government of Nigeria in the past eleven years in particular, to reduce poverty to the barest minimum, because of the dangerous dimension it has assumed over the decades.
This effort comprises the formulation or adoption of various economic policies by federal, state and local governments, in order to cushion the effect of the biting austerity on the people.
It is an established fact that many household in the country today, live below the poverty line, in fact, investigation has shown that the highest percentage of Nigeria’s workforce work in the public sector and earn their monthly salary of below one dollar per day.
The rural community, whose main occupation is agriculture, produces the food consumed in the country, but which is hardly sufficient to feed the people, because farmers still use crude farming implements to till the land.
The federal government, in a bid to fight the menace of poverty therefore, has set up some agencies essentially to provide financial assistance particularly to youths and women involved in small scale businesses.
These agencies include National Poverty Eradication Programmes, NAPEP, Small, Medium Entrepreneur Development Agency of Nigeria, SMEDAN, National Directorate of Employment, NDE, Nigeria Agricultural Co-operative and Rural Development Bank NACRDB, and the Agricultural Credit Guarantee Scheme, ACGS, all having a common objective of providing credit facilities to target beneficiaries at the national, state and local government levels.
However, due to the increasing unemployment rate in the country, this initiative by the government, though right step in the right direction, is not enough to meet the aspirations of the unemployed.
So recently, Cooperate Societies, a concept that was given birth from the traditional thrift collection, began to spread like wild fire in virtually every part of Nigeria.
There is hardly any workplace in Nigeria today particularly government establishments, where a cooperative society is not operational.
It’s quite effective because transactions of money are carried out in conjunction with employers of labour on behalf of their staff.
For example, staff’s savings into the co-operatives are deducted at source and repayment of loans is done through deductions from staff salaries as requested by the operators of the societies.
In the same vein, there are co-operative societies that have been set up by private initiative, i.e. group of people seeking a common economic goal and hoping in the long run to improve their economic status.
These people-oriented cooperate societies, have capital base in some cases running into millions of Naira which they use to execute multipurpose projects that are commercially viable for the benefit of members. Due also to the multipurpose nature of these societies, they are engaged in selling of shares, purchase of agro-allied products, estate and in addition to members savings.
For a co-operative society to operate in Nigeria, it is mandatory for the applicants to register with the Ministry of Commerce both at the state and federal government level and/or with the Corporate Affairs Commission, before the law of the land can back them in their activities.
After completing the registration formalities, a certificate of incorporation is issued to the society as well as bye-law which guides the society to draft its constitution.
Having fulfilled these guidelines, people can then be registered to form the membership of the society.
Subsequently, any surpluses arising from business carried out with members’ funds, will be shared accordingly to all shareholders of the society.
Apparently encouraged by these steps taken by the people themselves, government in its magnanimity, has released billions of naira under Agricultural Loan Schemes to help farmers handicapped by capital, to improve their yield.
This is how it is done: groups of people are expected to form themselves into co-operatives, with each paying 10percent deposit of the loan they are applying for into the Nigeria Agricultural Cooperative and Rural Development Bank, NACRDB.
Unlike the high interest rates charged by commercial banks, cooperative loans attract low interest rates, while a six month moratorium is granted to those who receive loans to enable them pay with ease.
The cooperative society concept has moved to another level lately, that of being a Non-Governmental Organization, NGO. At this level, the societies’ objectives is networking with similar organizations and making necessary arrangements with donor agencies within and outside the country.
As an NGO, the societies are at liberty to source the funding of their various activities from benevolent organizations and foundations especially from Europe and America.
Such activities may include workshops, seminars and counseling in career choices, all in an effort to empower members in areas otherwise not ventured by them.
It is indeed unfortunate that people who have accessed these loans facilities, think it is business as usual, meaning they still believe government is ‘father Christmas’ and that government’s money, is free money.
I will not be surprise going by what some beneficiaries have remarked, to see them using their loans to buy cars, marry additional wives or purchase other consumer items.
Going by the experience of some countries that tried these co-operatives like Malaysia and Bangladesh in Asia, it will not be long before the economic in dices of the country will begin to leap higher.
It will be recalled that, thirty years ago, Bangladesh’s economist and Banker, Muhammad Yunus developed the idea of micro credit, which led to the establishment of Grameen Bank.
The Bank started with about 96 percent rural poor women and within few years, transformed their lives and reduced poverty to the barest minimum in Bangladesh.
Today, the Grameen principle is what is adopted all over the world in the form of co-operative societies.
In recognition of his developmental work translated in grassroots social and economic changes, the world has named Muhammed Yunus; fondly called the father of micro credit, and Grameen Bank as the winners of 2006 Nobel Peace Prize.
With the proliferation of cooperative societies in Nigeria today and the concept of self employment gaining ground, youths will now be empowered and dependency no doubt be on the decline.
Even banks and financial institutions are approaching these co-operatives societies to lodge their savings with promises of attractive interest rates.
Do you blame them! Please let the co-operative music play on.