The study assess the roles played by cooperative societies’ savings and loans
services on members’ economic condition, standard of living and in meeting
participants financial needs in rural locations where there is no bank nor other
formal financial providers.
Using a combination of interview, focus group discussion and questionnaire
techniques, the study covers the activities of cooperative societies located in
rural communities and villages outside the state capital and local government
headquarters where there is no electricity, water and tarred road in Ogun State,
Nigeria. From its findings, this study identified and discussed potential areas for
the improvement of cooperative societies that could be of benefit to rural
finance providers and the cooperative members.
The study is the first empirical investigation in Nigeria that focuses on the
relevance of cooperative societies on members’ standard of living in rural
communities and villages. The study shed light on how rural communities
function – how their relationships develop, how individual esteem is increased,
how interdependence grows, how hierarchies are maintained – and how this is
facilitated in part by the loan-making of members promoted cooperatives. It has
also provided more evidence on the importance of land ownership, and how this
is enhanced when rural communities have access to cheap and affordable
loans. It has also provided insights into the development of rural businesses,
how complex they are, and how they require more input than the financing
received through cooperative loans.
The study breaks new ground in informal cooperative functioning, community
development and rural finance research by providing a distinction between
standard of living and quality of life variables in measuring the economic
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condition of rural dwellers, and the production of circle of social capital theory
that the role of cooperatives to the members involve financial capital, physical
capital and social capital which are interrelated. This helps to appropriately
identify the roles of cooperative societies in rural finance to increase in
household income, ownership of household assets and acquisition of enterprise
assets. However, participation in the cooperative does not lead to enterprise
profitability, while rural financial needs are more accessible from cooperatives
than other sources.