The impact of cooperative financing on millennium


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The impact of cooperative financing on millennium

  1. 1. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011 The Impact of Cooperative Financing on Millennium Development Goal of Poverty Eradication: Lessons from Nigeria Onaolapo A . R Oladejo Moruf * Department of Management and Accounting, Faculty of Management Sciences Ladoke Akintola University o Technology, Ogbomoso, Oyo State, Nigeria. * E-mail of the corresponding author: the efforts and resources devoted to fighting poverty by the Nigerian government empowermentprogrammes, the problem has remained intractable. Significant among the medium for poverty alleviationmodels are users-owned organizations (Cooperative societies) designed as individual self-help andempowerment vehicles for micro-credit delivery. Testing the Cooperatives strategies in Nigeria is expectedto give insight into the state of poverty in the continent of Africa and provide measuring guide toMillennium Development Goals (MDGs) relating to poverty reduction. This paper attempts to investigatethe impact of cooperative financing method on the attainment of MDGs objective as regards povertyreduction. Data collected from the stakeholders in cooperative organizations in Nigeria were analyzedusing descriptive statistics, regression analysis and Chi Square to establish the relationship betweencooperatives financing, poverty reduction and its significance as a criterion for achieving the MDGsobjectives. Causality was found between the tested variable especially cooperative credit assistance andpoverty alleviation. The paper recommends that government policy should acknowledge the micro creditpower of cooperatives and integrate this into its micro financing policy-focus.Keywords: Poverty, Poverty-Eradication Finance, Cooperative Financing Method, MDG1. IntroductionIt has been realized in the recent years that there are limits to which government can singly promotedevelopment. Effective cooperative development is essential to nation’s growth but its impact on achievingthe Millennium Development Goals (MDGs) relating to poverty eradication is a subject of concern toscholars and practitioners. The Nigerian economy is characterized by large percentage of the poor asreiterated by the National Poverty Eradication Program (NAPEP, 2010), which put the level of poverty at67% in line with the World Bank report of 1999.Taking a cue from the African Development Bank (ADB, 2003) survey in 1997, Nigeria had 70.2 % of herpopulation living just above one United State of America Dollar (USD) per day and 90.8% below two USDa day using the international poverty line criteria. The Nigerian situation represents a developmentalexperience characterized with poverty. According to Alabi and Ahiawodzi (2007), the frustrations ofaccessing credit facilities from formal systems compel the poor and informal business entrepreneurs toresort to different non-banking and informal arrangements to access funds for their operations. This hasserious implications for a country like Nigeria where the economy is largely characterized by micro andsmall businesses as observed by Basu et al (2004).Further to this is the observation of Kevin, Louis &Mark (2000) that one means for the entrepreneurialfirms to overcome the constraint of access to credit is by cooperating with either other entrepreneurial firms 19
  2. 2. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011or possibly with larger, established, resource-rich firms. The extent to which the cooperative method canbe used to facilitate the MGDs relating to poverty reduction as declared by the United Nations summit of2000 shall be the crux of this study.1.1 Statement of the problemPoverty is a multidimensional and very complex phenomenon, which requires a multifaceted response.Despite the efforts and resources devoted to fighting poverty by the Government empowermentprogrammes, the problem has remained intractable. A major obstacle to Cooperative development inNigeria is policy neglect. The Nigeria government is not attracted to the cooperative financing strategiesand has in most cases preferred some other economic groups similar to this in her poverty eradicationprogramme. There are some factors that affect the performance of Cooperative Societies in dischargingmicro credit roles effectively and perhaps the reasons for lack of interest by the policy makers in Nigeria.Generally the capacity of Cooperative Societies to provide fund to the poor and low income group islimited by inadequate capital base (Asaolu 2004). The other critical element according to Akinwunmi(2006) was leadership. If there is purposeful leadership, and managers of cooperatives are transparent,dedicated and truly serving, the society can compliment existing micro-credit financing tools. Otherproblems affecting efficiency of the medium is the prevalent embezzlement of the little fund availablemaking members to lose interest in this viable economic method.Poor accounting and record keeping has crippled the activities of most cooperative societies in Nigeria(Asaolu 2004, Oladejo 2008, Lawal 2006).As user-owned organizations, cooperatives have been used as amodel for individual self-help and empowerment that strengthens bonds leading to greater communityawareness and involvement and as such become a vehicle for micro credit delivery. Testing the Cooperatives strategies in Nigeria is expected to give insight into the state of poverty in thecontinent of Africa. Few studies that exist in Nigeria (Asaolu 2004) (Akinwumi 2006) regardingcooperatives impact on poverty eradication did not test its impact on Millennium Development Goals(MDGs). These few studies failed to emphasize the significance of Cooperative finance and how it affectsthe attainment of MDG objectives of poverty eradication.This paper remains germane as it explores the impact of Cooperative Societies financing as a vehicle forachieving the MDGs objectives of poverty eradication in Nigeria. Findings as regard the significance ofcooperative financing are expected to proffer solution to the problem of poverty alleviation and governmentpolicy direction.On the basis of the research problems stated above, this study therefore examines(i) The impact of Cooperative financing method on MDGs(ii) The extent that Cooperative financing method facilitates MDGs objective relating to povertyeradication The following null hypotheses are to be tested in order to achieve the objectives of the study • Ho: There is no significant relationship between cooperative method and poverty reduction. • H2: There is no significant difference between the effect of the lending policies of cooperative societies and other credit windows available to small and medium scale enterprises.The present section constitutes the introduction to the study while subsequent section examines theconceptual and theoretical underpinnings as well as analyzes findings relating to the study. The last sectionof the study is devoted to summary, conclusion and making recommendation as related to findings. 20
  3. 3. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 20112.0 Literature and Theoretical FrameworkCooperative movements are among the largest organized segments of civil society, and they playcrucial roles across a wide spectrum of human aspiration and needs. Cooperatives provide vital health,housing and banking services; they promote education and gender equality as well as protect theenvironment and workers’ rights.The U.S.A Cooperative Business Survey Report (2005) revealed that the economic impact of U.S –basedcooperative businesses is significant, reflecting the ubiquity of co-operatives, the large number ofAmericans who are their owners or customers, and the role they play in generating business activity,including jobs and economic growth. For the six key sectors that are the focus of this report, agriculture,credit unions, farm credit, electric utilities, grocery and housing, the data are impressive. From the report,there are 21,367 cooperatives in the six sectors. These cooperatives have more than 127.5million members.Cooperatives in these six sectors employ considerably more than 500,000 Americans, with aggregatepayrolls of more than $15 billion annually. These cooperatives generate total annual revenues in excess of$211.9million. Among individual sectors Agriculture co-operative for instance has a gross businessvolume of more than $111 billion per year and 2.8 million members. The Farm Credit System hasapproximately $125 billion in assets and $96 billion in outstanding-loans.Kevin, Louis and Mark (2000) using a seven-nation (Australia, Finland, Greece, Indonesia, Mexico,Norway, and Sweden) sample, found that entrepreneurs from feminine, collective, and uncertainty-avoidingsocieties have a greater appreciation for the strategic importance of cooperative strategies than theircounterparts. Moreover, entrepreneurs from feminine societies place greater emphasis on partnercommonality in terms of objectives and values to ensure cooperative success, whereas those fromindividualistic societies emphasize contractual safeguards.According to Narayan and Petesch (2009) co-operatives are in many countries playing significant socialand economic parts in national economics, thus ensuring not only personal development a reality, butcontributing to the well-being of the entire population at the national level. Co-operatives havesignificantly contributed to economic growth throughout the world. Furthermore, the United Nationsestimated in 1994 that the livelihood of nearly 3 billion people, or half of the world’s population, was madesecured by co-operative enterprises. Nearly 800 million individuals are members of cooperatives today,compared with about 184 million in 1960. They account for an estimated 100 million jobs and areeconomically significant in a large number of countries providing foodstuffs, housing, financing and a widevariety of consumer services as put by International Labour Conference, Report (2001)The major emphasis in Cooperative according to Akinwunmi, (2006) is oneself-help, thus people cooperatebecause they realize that it is extremely difficult to achieve some goals by doing it alone. Asaolu (2004)also argued that the cooperative society is potentially an important instrument of social transformation,especially in the rural areas as they have proved to be useful in achieving increasing domestic production offood, industrial raw materials, manufactured products and equitable distribution of farm inputs, farmproducts and other commodities that are central to MDGs. This paper believes that Cooperative financingare the most practical tools to adopt to meet the needs of the people in all spheres of development.2.1 The Millennium Development Goals 21
  4. 4. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011To tackle the complex phenomenon of poverty among others, in the year 2000, the United nations agenciescollectively identified a concise set of eight Millennium Development Goals (MDGs) such as to eradicateextreme poverty and hunger, achieve universal primary education; promote gender equality and empowerwomen; reduce child mortality;improve maternal health; combat HIV/AIDS, malaria and other diseases;ensure environmental sustainability; and develop a Global Partnership for Development. These objectiveshave become important tools for Cooperation in support of national polices to reduce and eliminatepoverty, as regard the target of halving extreme poverty by 2015. Unfortunately, the task is hugeand poverty is gaining ground. It is generally questioned whether financially sustainable microfinanceoperations reach the “near poor” and the “upper poor” as posited by Yunus (2008) The answer to this keyquestion has profound implications for the relevance of microfinance to the global achievement of theMillennium Development Goals (MDGs) by 2015 which encapsulate seven key agenda as noted above.2.2 Concept of PovertyPoverty according to Townsend Cited in IPC (2006) is basically a condition of deprivation experienced byhuman beings characterized by a situation whereby resources of individual or families are inadequate toprovide socially acceptable standard of living. A poor person is believed to typify someone who does nothave enough to eat, vulnerable to high mortality rate; (low life expectance) low educational opportunitiesexposed to poor drinking water; inadequate health care, unfit housing and lacks active participation indecision making process within his/her environment. Oyeasnmi etal (2010).Poverty from a national perspective is a reflection of glaring defect within an economy as evidenced inmass penury, pauperization of the working class, mass unemployment and poor welfare service. TheCentral Bank of Nigeria (CBN)/ World Bank 1999 described poverty as a vicious circle, that manifest in ofunderdevelopment which keeps the poor in a state of destitution until the circle is broken (CBN 1999).The level of income, access to credit as well as purchasing power are often combined with selected socialindicators including access to health care delivery, education and basic infrastructure, to determine ormeasure extent of poverty. Previous literatures have identified specific benchmarks to measure povertylevel including Sen index, PX weighted measurement, Human Development Index, Food Security Index(FSI) Integrated Poverty Index (IPI), Basic needs Index (BNI) Relative Welfare Index (RWI), the PhysicalQuality of Life Index (PQLI) and the Sustainable Fisheries Livelihood Approach (SFLA); World Bank(1996) Oyesanmi et al (2010) and UNDP (2006) All these studies study however limit themselves toaccessibility of credit for undertaking sustainable venture as a measure poverty reduction. The extent ofsuccess attained by a given poverty alleviation medium has not be given the level of attention it deservesespecially as it relates to its efficacy.2.3 Nigerian Cooperative Development Policy: Highlights and ProblemsThe Federal Ministry of Agriculture and Rural Development (2002) issued a policy on cooperativedevelopment in August 2002 to facilitate economic development in Nigeria. The policy takes cooperativesas unique organization with both social and economic objectives, uphold the principles of cooperatives asadopted by ICA, 1995 and adopt cooperatives as a vehicle for national development. The policy reviewedthe performance of cooperative sector since the inception of formal cooperation in Nigeria in 1935.Highlights of the performance of the cooperative sector to date include among others: 22
  5. 5. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011 • Development of export crops production in quality and quantity leading the way to foreign exchange earnings from cocoa, palm produce, groundnuts, cotton, rubber etc. • Minimization of exploitation of producers by middlemen and traders. • Development of indigenous banking which favorably compete with foreign banks and break their monopoly in financial intermediation. We have cooperative bank (now Skye Bank, Nigerian Agricultural Credit, Cooperative Rural Development Bank (NACRDB ) etc. • Mobilization of enormous financial resources from small cooperative savers thus creating thrift and credit systems that have helped millions of small scale industrialist to establish businesses and become house owners.3.0 MethodologyThe research techniques adopted in this study was basically designed to achieve the stated objective.Survey research design was chosen with complementary application of secondary data given the nature ofthe sampled elements and the variables that are being studied without making any attempt to control ormanipulate them. .Data were collected from a sample of cooperative stakeholders in Oyo state to determinethe relationship between Cooperative method and MGD relating to poverty reduction in Nigeria. Theindependent variable is Cooperative financing method while the dependent variable is the povertyreduction. Relationship between cooperative financing and poverty reduction was premised on the extent towhich selected (sample) members of the cooperative societies apply their financial assistance to run smalland Medium scale enterprises (SME). In order to test the extent to which cooperative financing hasaided participating SME owners descriptive statistics and analysis of regression statistics were employedusing, the following model/ equation: Y = α+ β1X1+ β2X2+ β3X3+ β4X4+Ei Where Y= The dependent variables i.e periodic earnings of participating SME owners. α= Is the intercept of the regression line which means the earnings of the SME owners when allothers factors affecting operations are held constant. β1 = The slope of the regression line when only variable X1 (Capital base) is changed with all other variables held constant. β2 = The slope of the regression line when only variable X2 (working capital) is changed with other variables held constant. β3 =The slope of the regression when only variable X3 (Cooperative loan) is changed with all other variables held constant. β4 =The slope of the regression line when only variable X4 (other financing sources) is changed with all other variables held constant and /ei= stochastic error term.The study area was restricted to ten-major cities and towns in Oyo State Nigeria. The cities and townswhich were randomly selected out of many cities and towns that made up the thirty-three local governmentarea of Oyo State include Ibadan; Ogbomoso, Shaki, Iseyin Oyo, Lanlate, Igbo-Ora, Igboho, Fiditi andMoniya. The choice of Oyo-State was informed by the prevalence of cooperative activities as a means for 23
  6. 6. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011generating self-help financing among artisans; farmers, civil-servants, traders and small scale business-owners in these areas. For effective coverage and cost minimization a random sampling technique wasused to select a total of twenty-five cooperative societies while a purposive sampling technique wasadopted in selecting five respondents from each society.Administered questionnaire is designed to solicit respondents’ opinion on the perceived potential benefitsof cooperative financing as tools for economic empowerment, comparative access to micro-credit betweencooperative window and other conventional financing sources; and its effectiveness as a means for povertyreduction.The return rate for completed questionnaire was 83 percent as we were able to get back 104 usablequestionnaire out of 125 personally administered to our respondents which were employed for finalanalysis in this study.Data collected from the questionnaire were analyzed, summarized, and interpreted accordingly with the aidof descriptive statistical technique using simple percentages. A non-parametric statistical test; Chi-squarewas used to test the formulated hypothesis. Symbolic representation of chi-square is given below: X2 = ∑(fo-fe)2 Where X2 = The output of the Chi-square Fo = Frequency observed Fe= Frequency ExpectedThe test adopted 95 confidence level where the degree of Freedom is determined using (r-1)(c-1) with r=row total, c= column total and level of significance = 0.01, Critical region= X2t(0.01,(r-1)(c-1), The basisfor rejection or acceptance of null and alternate hypothesis is as follows, If X2t >X2 while X2c representChi-square calculated Accept Ho, otherwise when X2c>X2t reject Ho, X2t represents chi-square tabulated. The trends patterns and relationship among data were identified and interpreted.4.0 Result and DiscussionsThe study examines the impact of cooperative financing on MDG of poverty alleviation and investigatesthe extent such cooperative strategy has been able to influence poverty level. Special statistical packagesuch as the SPSS was employed using the regression analysis to run an ordinary least square of studyvariables. Furthermore a non-parametric statistical test, that is the chi-square was also used to testformulated hypothesis. Findings from the three objectives and research questions are presented below:4.1 Relationship Between cooperative societies and poverty alleviation in the study area:The coefficients of the regression equation from the analysis of the study variables are presented intables 4.0 and 4.1Table 4.0 Coefficient of the regression equation 24
  7. 7. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011 Variables Coefficients Error t-stat P-value Capital Base(X1) 1.076 0.123 8.771 4.22E-15 Working Capital (X2) 0.284 0.302 0.942 0.348 Cooperative financing (X3) 0.793 0.094 8.476 2.33E-14 Other financing (X4) 0.309 0.111 2.784 0.006From the result generated above; the initial regression coefficient equation now reduces the studyregression equation to:Yi= 42064.98 + 1.076X1 + 0.284X2+0.793X3+ 0.309X4.In particular cooperative financing (X3) has the highest positive coefficient of 0.793 out of the threeoperational financing sources namely, working capital; cooperative finance and other financing.A test of significance formulated to predict the participants earnings adopts the ANOVA-test and found outthe following:Table 4.1 ANOVA scores on the Regression Equation. Df Sum of squares Means square F Regression 4 1.83E+12 4.57E+11 1508.477 Residual 146 `4.43E+10 3.03E+08 Total 150 1.87E+12From the table 4.1 it is evident that F-cal (1508.77) is significantly higher than F-tab (5.1785), hence wereject the null hypothesis and accept the alternative hypothesis which states that there is a significantdifference between the earnings of sampled SME using cooperative financing and those who do not4.2 Results of the questionnaire administered are presented in tables 4.2 and 4.3 25
  8. 8. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011Table 4.2Perception of Cooperatives Potential Benefits AGREED UNDECIDED DISAGREEDEconomic empowerment throughcooperative financing method 40 49 06 07 02 38.46% 47.12% 5.77% 6.73% 1.92%Cooperative as major providers of 36 52 03 08 05fund to poor and small business 34.61% 50.0% 2.88% 7.69% 4.81%Cooperative as widely spread 32 48 08 12 04 30.76% 46.15% 7.65% 11.54% 3.855%Preference for cooperative loan by the 25 44 11 08 16poor 24.04% 42.31% 10.57% 7.69% 15.38%Convenient credit access in 28 51 06 05 14cooperative as compared to bank loans 26.92% 49.04% 5.77% 6.25% 13.46%Source: Field Survey 2011From the table above it can be seen that 85.58% agreed in the economic empowerment capacity ofcooperative, 8.65% disagreed while 5.77% were neutral, showing that cooperative method has capacity foreconomic empowerment, 84.61% agreed that cooperative is a major provider of fund to the poor and smallbusiness while 12.5% disagreed and 2.88% were neutral indicating the significance of cooperatives asmajor provider of capital for the poor and low income group. 60.6% attested to the widespread acceptanceof cooperative finance, 79.055 saw cooperative as a widely spread MFIs, 15.39% disagreed while 7.65%were neutral supporting that cooperatives are common financing tools 66.36% of the poor preferredcooperative loan to bank, 23.07% disagreed while 10.57% were neutral an indication that cooperatives loanis often preferred by the poor than banks-credit 75.96% agreed to the convenience as regard to access tocredit in cooperative, 19.71% disagreed while 5.77% were neutral which proves that cooperative methodprovides convenient access to micro credit, findings from the responses to the questionnaire indicate to alarge extent the positive perception of potential benefits that the poor and low income derive fromcooperative credit window. This findings also buttressed significance of cooperative financing as tools forpoverty alleviation.Table 4.3Impact of Cooperative Financing as tools for achieving MDG Poverty Reduction Agreed Neutral DisagreedAssessment of Cooperative 20 60 08 12 04financing of promoting MDG 19.23% 57.69% 7.69% 11.54% 3.84%Cooperative method as tool of 24 48 18 18 08MDG relating to poverty 23.06% 46.15% 12.30% 12.30% 7.69%10. Capacity of Cooperative 14 55 09 20 06method for MDG 12.98% 53.36% 7.21% 19.23% 3.36%Source: Field Survey 2011 26
  9. 9. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011From the above table, it can be seen that 76.92% agreed that cooperative method possesses power ofpromoting MDG 15.34% disagreed while 7.69% were neutral, showing that Cooperative method has powerfor promoting MDG. 69.21% agreed on Cooperative method as a veritable tool of achieving MDG relatingto poverty and 20.19% disagreed while 10.6% were neutral an indication that cooperatives is a veritabletool of achieving MDG relating to poverty. 66.34% agreed on that cooperative finance that cooperativeshas the Capacity for MDG relating to poverty and reduction 25.0% disagreed while 8.65% were neutral; anindication that cooperatives have the capacity for MDG objective of poverty reduction relating to poverty.Test of HypothesisHo1: There is no significant relationship between corporative financing and poverty reduction. The result ofthe Chi-square analyzed to measure discrepancies between the observed and expected frequency as well asthe level of significance of the tested hypothesis as regard findings from tables 4.2 and 4.3 are presentedbelowTable 4.3 Chi-Square O E O-E (O-E)2 (O-E)/2/E 223 145.6 776 5990.76 41.14 345 145.6 199.4 39760.36 273.07 41 `45.6 -104.6 10941.16 75.15 62 145.6 -83.6 6988.96 48.00 57 145.66 -88.6 7849.96 53.91 728 728.0 491.27Since X2c = 491.27 Critical region = X2 t(0.01,4)=13.2767 level of significance: 99%Hence, X2c > X2t i.e. 491.27 > 13.2767Statistically; findings from the above indicates that expected value is greater than observed value, withcalculated X2cal 491.27 being greater than tabulated X2tab 13.2769 thus one can conclude that the expectedvalue remain significant at a critical level of 99%; an indication that cooperative financing has the tendencyto reduce poverty if properly harnessed. HYPOTHESIS ll HO2: Cooperative financing method will not facilitate MDGs objective relating to poverty eradication. From the results and findings in tables 4.2 the following Chi square table was constructed to test hypothesis ll at 99% level of significance: 27
  10. 10. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011 Chi-Square Table O E O-E (O-E)2 (O-E)/2/E 130 145.6 -15.5 243.36 1.67 327 145.6 181.4 32905.96 226.00 63 `45.6 -82.6 6822.76 46.86 139 145.6 -6.6 43.56 0.30 69 145.6 -76.6 5867.56 40.27 728 728.0 315.10Findings from the table are similar to the above and indicate that we reject Ho, and accept H1 thus aconclusion can be drawn that proper Cooperative financing method will facilitate MDGs objective relatingto poverty eradication.5.0 Summarize, Conclusion and RecommendationThe summaries of all the findings revealed that cooperative method has economic impact and is a veritableapproach to poverty reduction in line with the earlier studies (Akinwunmi 2006, Oludimu & Fabiyi 1993).Nigerian government is reluctant to use cooperative channel of micro credit in line with world feeling oncooperative model. While the stakeholders perceived Cooperatives as the bank for the people providingfinancial assistance to the poor. Our findings also indicate that Cooperative strategies would make positiveimpact on the achievement of MDGs, because more than other financing windows the low income earnersand the poor it provides a widely spread, veritable and easily accessible credit medium in Nigeria. Apartfrom the convenient access to credit afforded by the Cooperative scheme, there is no problem of locationand identification of loan beneficiaries; a factor that has constituted loan recovery problem and incidenceof non-performing loan in kindred financial institutions. However, there is the need for constant review andupdating of Cooperative policy and law to meet the world dynamics.According to the United Nations Millennium Summit in the year 2009, an important part of the preparationfor the achievement of these World goals is to make micro credit available to over 50% of the world’spopulation. The study concludes from the extensive literature review on the significance of cooperatives topoverty eradication and concludes that it is a powerful tool for achieving MDGs. Despite the understandingof the developmental potentials of Cooperatives evidence , government readiness to adopt the Cooperativestrategies for micro credit delivery is yet to be observed. Instead, alternative economic groups have alwaysbeen organized by the Government to deliver micro credit to the target poor.In the light of the above, the following suggestions may be found useful: • Government should integrate Cooperative Financing Method in its Microfinance policy and specify the microfinance role of Cooperative movement. • Government should include Cooperative strategies in MDGs plan so as to cater for the large percentage of the poor and low income group that belong to Cooperatives. • Government should adopt policies and a legal framework that support cooperatives and are consistent with their nature and values. • The institutional framework capable of providing rapid, simple and affordable registration process of cooperatives should be put in place. 28
  11. 11. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011 • To achieve the most effective polices, governments should consult cooperative and workers’ organizations when drafting or revising legislation or regulations that affect the work of members and the capacity of co-operatives to create employment and income.ReferencesAkanji O.O. (2006): “ Microfinance as strategy for poverty reduction”, CBN Economic and Financialreview, 39 (4), I.R and Oladejo M,O (2008): “Theory of micro enterprises. The Nigeria experience”,International Journal of Social Sciences, University of Uyo, Akwa Ibom state Nigeria, 3 (7).Akinwumui, J. (2006): “Road Map to re-engineering Cooperatives in Nigeria” A paper Presented at theSouth West Cooperative leaders conference, organized by cooperative federation of Nigeria South Westzone at Obisesan Hall, Ibadan September 7th, 2006. Alibi Joshua, Alabi G, Ahiawodzi (2007): “Effect of Susu – a traditional micro finance Mechanism onthe Organize and Non-organized micro and small enterprises (MSEs) in Ghana”: African Journal ofBusiness Management, Vol 1(8) pp 201-208, Nov. 2007. http/www.academijournals.orgs/AJBMAnyanwu, C.M (2004):” Microfinance Institution in Nigeria: policy, practice and potentials”. PaperPresented at the G24 Workshop on Constraints it growth in Sub-Saharan African, Pretoria, South Africa,November, 29-30, 2004.Aryeetey, E (1998): Information Finance prepared for private sector development backgroundDevelopment paper prepared for African Development Report, 1998.Asaolu, T. O. (2004): Evaluation of the performance of the Cooperative Investment and Credit Societies(CICS) in financing Small-Scale Enterprises (SSEs) in Osun State, Nigeria. Central Bankof Nigeria (2005): Micro finance policy, Regulatory and Supervisory Framework, December ‘(2005).Basu ,A, Balvy R, Yulek M (2004),” Microfinance in Africa: experience and Lessons from IMF”. An IMFWorking paper.CBN (1999) Study on poverty Assessment and Alleviation in Nigeria.Central Bank of Nigeria (CBN 2009): Website; www.centralbank.orgCentral Bank of Nigeria (2004): Microfinance policy, regulatory and supervisory framework, Policyguideline, December, 2004.,2007pg 16Federal Ministry of Agriculture and Rural Development (FMARD) (2002): National CooperativeDevelopment policy Document, Abuja.Hadiza, M (2005) “Micro Finance Development Funds” and the growth of micro finance Institutions”,Nigeria Quarterly News letter of the International year of Microcredit 2005.International Labour Conference, Report V (1): Promotion of cooperatives (2001). 29
  12. 12. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011International labour Office, (1960); Cooperative Management and administration Geneva.International labour Office, (ILO) and the international Cooperative Alliance (ICA) (2004).International Poverty Centre (2006) Poverty in Focus United Nations Development December 2006(UNDP)Imam, Hanva (2001) “Potential of Micro-credit” as poverty removal strategy, in Research and Policydirections on poverty in Nigeria: centre for Gender and social policy studies OAU Ile-Ife.Kevin, Louis, Mark (2000); Attitudes Toward Cooperative Strategies: A Cross-Cultural Analysis ofEntrepreneurs. Journal of International Business Studies. https:/business. Highbeam.comMicro Credit Summit Declaration and plan of Action, The world Summit on Microcredit, Washington D.C.February, 1997.NAPEP, (2010); National poverty Eradication Programme Report, Poverty Day, In Channel News October2010., D and Petesch, P (2009): “An Empowering Approach to poverty Eradication”. Global Co-operative Campaign against Poverty Issue.Ojo, O (2009): Impact of Microfinance on Entrepreneurial Development: the case of Nigeria: TheInternational conference on Administration and Business. ICEA-FAA 2009 14-15 November 2009The Faculty of Business and Administration University of Bucharest . http://conference.faa.roOladejo, M. O & Adereti, A . S (2010): The impact of Information Technology on the Performanceof Micro fiancé Institution in Nigeria, journal of Economic Development and Managerial Studies, Vol. 1,April 2010 edition. www.icidr.orgOladejo, M.O. (2008): The Impact of Cooperative Societies as Micro credit Delivery Channel in the Southwestern Nigeria, Unpublished MSc thesis, Olabisi Onabanjo University, Ago Iwoye.Olesin, Ayo (2007) “Making cooperative societies work for you”, Sunday business in Sunday PunchNewpaper 18th February, 2007. pp7.Olomola, A.S. (2002): Social capital, Microfinance group performance and poverty Implication Nigeria, .oxuk/conferences/2002-UPaGISSA/papers/olomola- case2002pdf.Owojori, Adekunle and Oladejo, M.O. (2009):Re-Engineering Cooperative Societies For Sustainable Smalland Development, Nigeria. International Business Community Review.Promoting Cooperatives: A Guide to ILO Recommendation 193”. Published by the Co- OperativeCollege for the Department of International Development, Manchester, UK,2004.Reeves, M (2003) A wealth of opportunities in a world of limits: Free Enterprises. Economics of Cooperation Federal Reserve Bank of Dallas; www. P (2006) Introduction, Compendium of best practices in poverty measurements. Expert Groupon poverty statistics (RioGroup) Rio De Jameiro September 2006 30
  13. 13. Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)Vol 2, No 11, 2011UK Department for International Development: “Things you probably didn’t know about co-ops” athttp://www. Cooperative Business Survey Report (2005); The Impact of New Generation Cooperatives on TheirCommunities Cooperative Business In the United States. A 2005 Snapshot Prepared by the NationalCooperative Month planning Committee October 2005, US Department of Agriculture, RBS ResearchReport 177.World Bank (1995); World Development report 1995, World Bank Washington.World Bank (1996) Nigeria: Poverty in the midst of plenty. The challenge of Growth with inclusion. AWorld Bank Poverty Assessment population and Human resources Division Report No 14733 Washing toD.CYunus, Muhammed (2008): Grameen Bank, Microcredit and Millennium Development Goals; downloaded November 2011BRIEF BIOGRAPHY OF AUTHORS 1. DR ONAOLAPO ADEKUNLE RAHMON is a Senior Lecturer in the department of Management and Accounting, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has his PhD in Management Science with specialization in Financial Management. He is an associate member of the Chartered Institute of Bankers of Nigeria (CIBN). His research interests include Banking, finance, Investment and development-economics. 2. MR OLADEJO MORUFU OLADEHINDE is currently a lecturer 1 in the department of Management and Accounting, Ladoke Akintola University of Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has MSc in Accounting, MBA and BSc in Accounting from Olabisi Onabanjo University, Ago Iwoye- Ogun state Nigeria. He is an associate member as well as examiner to both the Institute of Chartered Accountants of Nigeria (ICAN), and the Chartered Institute of Taxations of Nigeria (CITN). His research interests include accounting information system, Financial Institutions Analysis and electronic payment system. 31