Poverty reduction through the use of cooperative societies

POVERTY REDUCTION THROUGH COOPERATIVE SOCIETIES

The Nigerian Government has done a lot in the last eleven years in particular to reduce poverty to a minimum, because of the dangerous dimension it has assumed over the decades.

This effort includes the formulation or adoption of various economic policies by the federal, state and local governments, in order to cushion the effect of the biting austerity on the population.

It is an established fact that many households in the country today live below the poverty line, in fact research has shown that the highest percentage of the Nigerian labor force works in the public sector and earns their monthly salary below a dollar a day.

The rural community, whose main occupation is agriculture, produces the food that is consumed in the country, but it is barely enough to feed the people, since the peasants still use rudimentary agricultural implements to till the land.

Therefore, the federal government, in an attempt to combat the threat of poverty, has established some agencies essentially to provide financial assistance, particularly to youth and women involved in small-scale businesses.

These agencies include National Poverty Eradication Programs, NAPEP, Nigeria Small and Medium Entrepreneurs Development Agency, SMEDAN, National Directorate of Employment, NDE, Nigerian Agricultural Cooperative and NACRDB Rural Development Bank, and the Agricultural Credit Guarantee Scheme, ACGS, all with a common objective of providing credit facilities to target beneficiaries at the national, state and local levels of government.

However, due to the rising unemployment rate in the country, this government initiative, although it is a right step in the right direction, is not enough to satisfy the aspirations of the unemployed.

Recently, Cooperate Societies, a concept that was born out of the traditional second-hand collection, began to spread like wildfire in virtually all parts of Nigeria.

There are almost no workplaces in Nigeria today, particularly government establishments, where a cooperative society is not operational.

It is quite efficient because the money transactions are done in conjunction with the labor employers on behalf of their staff.

For example, staff savings in cooperatives are deducted at source and loan repayments are made through deductions from staff salaries as requested by the operators of the societies.

Along the same lines, there are cooperative societies that have been created by private initiative, that is, a group of people who seek a common economic objective and hope to improve their economic situation in the long term.

These people-oriented cooperative societies have a capital base in some cases of millions of Naira which they use to run multi-purpose projects that are commercially viable for the benefit of members. Also due to the versatile nature of these companies, they are dedicated to the sale of shares, purchase of agricultural products, patrimony and in addition to the savings of the partners.

For a cooperative society to operate in Nigeria, it is mandatory for applicants to register with the Ministry of Commerce at both the state and federal levels and/or with the Corporate Affairs Commission, before they can be endorsed by the law of the country. in their activities.

After completing the registration procedures, a certificate of incorporation to the company is issued, as well as a statute that guides the company to draft its constitution.

Having complied with these guidelines, individuals may register to form the society’s membership.

Subsequently, the surpluses that arise from the business carried out with the funds of the partners, will be distributed in the corresponding way to all the shareholders of the company.

Apparently encouraged by these steps taken by the people themselves, the government in its magnanimity has released billions of naira under Farm Loan Schemes to help capital-strapped farmers to improve their yields.

Here’s how it’s done: Groups of people are expected to form cooperatives, each paying back 10 percent of the loan they’re applying for at the Nigerian 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 given to borrowers so they can repay easily.

The concept of cooperative society has lately passed to another level, that of being a Non-Governmental Organization, NGO. At this level, the objectives of the partnerships are to network with similar organizations and to make the necessary arrangements with donor agencies inside and outside the country.

As NGOs, societies are free to obtain funding for their various activities from charities and foundations, especially in Europe and America.

Such activities may include workshops, seminars, and advice on career options, all in an effort to empower members in areas they might not otherwise venture into.

In fact, it is unfortunate that people who have accessed these loan facilities think business as usual, which means they still believe that the government is ‘Santa Claus’ and that government money is free money.

I wouldn’t be surprised what some beneficiaries have commented on, seeing them use their loans to buy cars, marry additional wives, or buy other consumer items.

Following the experience of some countries that have tried these cooperatives like Malaysia and Bangladesh in Asia, it will not be long before the country’s economic indices start to jump higher.

It will be recalled that thirty years ago the Bangladeshi economist and banker, Muhammad Yunus, developed the idea of ​​microcredit, which led to the creation of the Grameen Bank.

The Bank started with around 96% of poor rural women and, within a few years, transformed their lives and reduced poverty to a minimum in Bangladesh.

Today, the Grameen principle is what is adopted around the world in the form of cooperative societies.

In recognition of his development work translated into grassroots social and economic change, the world has named Muhammed Yunus; basically called the father of microcredit, and Grameen Bank as the 2006 Nobel Peace Prize winners.

With the proliferation of cooperative societies in Nigeria today and the concept of self-employment gaining ground, the youth will now be empowered and dependency will no doubt be on the decline.

Even banks and financial institutions are approaching these cooperative societies to deposit their savings with promises of attractive interest rates.

Do you blame them? Please let the cooperative music play.