Why Many Cooperative Societies Fail In Nigeria


Have you ever thought to yourself why sometimes you hear about some cooperative societies, then suddenly you stop hearing about them? Sometimes cooperative societies find it difficult to survive due to certain factors and this has hampered growth in Nigeria's economy.

Cooperative societies are autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs by forming an enterprise owned and controlled by a group of people. They are crucial in helping to make up for the excesses of society.

hands together showing the data-on-eness evident in cooperative societies

We have discussed in detail how cooperatives can get incorporated but here we will talk about how cooperative societies can be run successfully to avoid an early demise.

Before we move on to that, let's look at the benefits of cooperative societies in Nigeria;

  • Providing affordable finance

    Financial cooperatives such as credit unions provide sustainable financial support for people excluded from the traditional banking system. As a result, they lend cautiously because they are run by people of the community and for the people of the community. Credit unions offer a safe approach to savings and loans.

  • Building local expertise and profits 

    Cooperative societies help to build local expertise because they are run by the people of the community. They also pass on their expertise to other people in the community. Hence, the profits generated are reinvested in the cooperative.

  • Creating decent jobs

          Around the world, cooperatives employ people and many people secure their livelihoods through them. This is the same in Nigeria. As people-centered businesses, their goal is to provide decent work with job security and good working conditions. 

Factors that contribute to the success of cooperative societies

The benefits mentioned above show us why it is important that cooperative societies are run successfully in Nigeria. Here are some of the factors that contribute to the success of cooperative societies in Nigeria;

  • Innovation and adaptation
  • Very detailed and advanced planning
  • Skilled management
  • Effective communication
  • Common member interest
  • Networking with other cooperatives.

While we looked at these factors, we also realised that one thing that causes cooperatives to fail is a faulty foundation. This is important because cooperatives have to do the required groundwork before launching into business. This goes on to affect their performance and growth, thereby causing them to shut down operations.

Prerequisites that ensure a successful cooperative society

  • Establish a steering committee

    Your cooperative need to have a group of people who identify your mission and core values. Develop a plan and a schedule for researching and developing the organization. Coordinate a meeting of potential members to test out the level of interest in the cooperative's ideas.

  • Create a business plan and recruit more members

    A cooperative has to create a business plan that will serve as a blueprint for starting the operation and development of the organisation. A typical business plan includes an executive summary, description of the company, market analysis, product research and development, marketing and sales plan, organizational structure, and financial data.

  • Carry out a feasibility study

    In this case, members look into the usual challenges like market issues and operating costs. In some cases, local or state governments may help provide financial and technical assistance in conducting a feasibility study.

  • Secure financing: 

    Your cooperative will require money for everything needed to allow the business to function properly. While a member may invest their money, cash injection can come from various places. The sources are seen in cases where cooperatives apply for business loans and start-up grants.

Successful cooperative societies in Nigeria

Successful cooperative societies never go unnoticed. Here are some of the successful cooperative societies in Nigeria;



← Previous "Experts seek enabling environment to grow housing sector""Experts seek enabling environment to grow housing sector" Next →


Similar Article


Experts seek enabling environment to grow housing sector Photo

Experts seek enabling environment to grow housing sector

To unlock more growth in the sector, the Managing Director of Sabreworks ltd, Mr. Olusegun Philips has urged the Federal and State governments to provide an enabling environment that encourages local and foreign investments in real estate. He called for a review of the Land Use Act, which he noted has been a stumbling block for investors. Philips spoke on the sidelines of the unveiling of the firm's ambassador, Banke Akinterinwa, who is a Nollywood actress and launch of Sabreflexx, a sa...



Cooperative federation seeks govt support for housing Photo

Cooperative federation seeks govt support for housing

Lagos State Cooperative Federation (LASCOFED) has asked Lagos State Government for 50 acres for construction of houses for members. The request is contained in a goodwill message by the LASCOFED President, Mr. Oladipo Shobule, last week to commemorate this year's International Day of Cooperatives, which holds every first Saturday in July. According to Shobule, the state government is expected to provide land for the national housing programme, while the Federal Government builds on it...