Poverty reduction through the use of cooperative societies
POVERTY REDUCTION THROUGH COOPERATIVE SOCIETIES
The Government of Nigeria has done a lot in the last eleven years in particular to reduce poverty to a minimum, due to the dangerous dimension that 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 scathing 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 Nigeria’s workforce 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 which 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 the National Poverty Eradication Programs, NAPEP, the Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, the National Directorate of Employment, NDE, the Nigerian Agricultural Cooperative and the NACRDB Rural Development Bank, and the Agricultural Credit Guarantee Scheme, ACGS, all with a common goal of providing credit facilities to targeted beneficiaries at the national, state and local government levels.
However, due to the rising unemployment rate in the country, this government initiative, although a good 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 every part of Nigeria.
There are hardly any workplaces in Nigeria today, particularly government establishments, where a cooperative society is not in operation.
It is quite efficient because money transactions are done in conjunction with labor employers on behalf of their staff.
For example, staff savings in cooperatives are deducted at source and repayment of loans is 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 in the long term to improve their economic situation.
These people-oriented cooperative societies have a capital base in some cases of millions of Naira which they use to run commercially viable multi-purpose projects for the benefit of the members. Due also to the versatile nature of these companies, they are dedicated to the sale of shares, purchase of agricultural products, heritage 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 the Corporate Affairs Commission, before they can be supported by the law of the country. in their activities.
After completing the registration formalities, a certificate of incorporation into the company is issued, as well as a statute that guides the company in drafting its constitution.
Having complied with these guidelines, people can register to form the membership of the society.
Subsequently, the surpluses that arise from the businesses carried out with the partners’ funds will be distributed in the corresponding manner 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 farmers harmed by capital to improve their yield.
Here’s how it’s done: Groups of people are expected to form into cooperatives, each paying 10 percent of the loan they are 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 borrowers are given a six-month moratorium so they can easily repay.
The concept of cooperative society has recently gone to another level, that of being a Non-Governmental Organization, NGO. At this level, the objectives of the societies are to network with similar organizations and to make the necessary arrangements with donor agencies inside and outside the country.
As NGOs, the 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.
In fact, it is unfortunate that people who have accessed these loan facilities think business as usual, which means that they still believe that the government is ‘Santa Claus’ and that government money is free money.
I wouldn’t be surprised by what some beneficiaries have said, to see them use their loans to buy cars, marry extra wives, or buy other consumer items.
Following the experience of some countries that tried these cooperatives like Malaysia and Bangladesh in Asia, it will not be long before the country’s economic indices start to jump higher.
Thirty years ago, it will be recalled, 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 about 96% of poor rural women and, in just a few years, transformed their lives and reduced poverty to a minimum in Bangladesh.
Today, the Grameen principle is what is adopted throughout 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 winners of the 2006 Nobel Peace Prize.
With the proliferation of cooperative societies in Nigeria today and the concept of self-employment gaining ground, youth will now be empowered and dependency will certainly 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.