small business opportunities for cooperatives in nigeria

7/28/2019 Small Business Opportunities for Cooperatives in Nigeria

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Small Business Opportunities for

Cooperatives in Nigeria

ALEX EHIS INEDEGBOR

A presentation to members of

Achievers Cooperative

Society Ltd

June 2011


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History of Cooperatives

The word cooperative is from the Latin, co-operari. Co means with

while Operari means to work. Co-operari therefore means to workwith.

The history of modern co-operatives dates back to the Agricultural andIndustrial Revolutions of the 18th and 19th centuries.

There is some dispute as to which was the first ever cooperative.

As early as 1761, the Fenwick Weavers' Society had been formed inScotland. Thats nearly 250 years ago! Its services expanded to includeassistance with savings and loans, emigration and education.

Since then, cooperatives have thrived.

However, the Rochdale Society of Equitable Pioneers, founded in 1844, isusually considered the first successful co-operative enterprise, used as amodel for modern co-ops, following the 'Rochdale Principles'.


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Cooperatives In Nigeria

The Cooperative Federation of Nigeria (CFN) was formed in 1945 and

was registered in 1967.

The background of cooperatives in Nigeria is traceable to the traditionalsavings and loans system.

about 50,000.

Cooperatives in Lagos alone have a capital base of =N=20bn


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Basis for Cooperatives

Self-help,

Self-responsibility

Equality

Equity

Solidarity


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Underlying Principles ofCooperatives

i. Open membership

ii. Voluntary Association

iii. State control

v. ources o nance

v. Democratic Management

vi. Service motive

vii. Separate Legal Entity

vi. Distribution of Surplus


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Types of Cooperatives

1. Consumers Co-operative Society: These societies are formed to protect the interest ofgeneral consumers by making consumer goods available at a reasonable price. They buy goods

directly from the producers or manufacturers and thereby eliminate the middlemen in the processof distribution.

2. Producers Co-operative Society: These societies are formed to protect the interest of smallproducers by making available items of their need for production like raw materials, tools andequipments, machinery, etc.

3. Co-operative Marketing Society: These societies are formed by small producers andmanufacturers who find it difficult to sell their roducts individuall . The societ collects theproducts from the individual members and takes the responsibility of selling those products in themarket.

4. Co-operative Credit Society: These societies are formed to provide financial support to themembers. The society accepts deposits from members and grants them loans at reasonable ratesof interest in times of need. Village Service Co-operative Society and Urban Cooperative Banksare examples of co-operative credit society.

5. Co-operative Farming Society: These societies are formed by small farmers to work jointlyand thereby enjoy the benefits of large-scale farming.

6. Housing Co-operative Society: These societies are formed to provide residential houses tomembers. They purchase land, develop it and construct houses or flats and allot the same tomembers. Some societies also provide loans at low rate of interest to members to construct theirown houses. The Employees Housing Societies and Metropolitan Housing Cooperative Societyare examples of housing co-operative society.


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Common Challenges

i. Limited Capital: The amount of capital that a cooperative society can raise

from its member is very limited because the membership is generally confinedto a particular section of the society. Again due to low rate of return themembers do not invest more capital. Governments assistance is ofteninadequate for most of the co-operative societies.

ii. Problems in Management: Generally it is seen that co-operative societiesdo not function efficiently due to lack of managerial talent. The members or

society. Again, because of limited capital they are not able to get the benefits ofprofessional management.

iii. Lack of Motivation: Every co-operative society is formed to render serviceto its members rather than to earn profit. This does not provide enoughmotivation to the members to put in their best effort and manage the societyefficiently.

iv. Lack of Co-operation: The co-operative societies are formed with the ideaof mutual co-operation. But it is often seen that there is a lot of friction betweenthe members because of personality differences, ego clash, etc. The selfishattitude of members may sometimes bring an end to the society


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Business Opportunities

AGRICULTURE

One of the fastest growing business opportunities inNigeria is catfish farming.

full potential.

Major players in this business are usually regional players.

Start-up capital is low. Land can be leased

You could also consider snail-farming


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Business Opportunities (Contd)

TRANSPORTATION Lagosians face the transportation challenge on daily

basis.

Opportunities exist for Buses, taxi, tricycles or evenokada. Buses can be outsourced to schools!

For transportation, it is always better to insure

comprehensively.

Operators will require close monitoring


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INFO-TECH

Cyber cafs came into existence based on the need bypeople to stay connected to the rest of the world.

Select a good location.

You can start with few systems (maybe 10)

The cost of systems have dropped significantly.

Once the speed is right and the environment comfortable,

you are sure to stay in business

You can run a business centre alongside


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EXPORT

Nigeria is rich in export commodities

Ranging from foodstuffs to agricultural produce, all can be exported

Can be done even on a small scale through major exporters.

You can export charcoal, beniseed, yam flour, cashew nuts, etc

If you are exporting through another exporter, you will need to fine-tune the legal agreements.

Though this maybe seasonal, you can have several suns in a season.


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TRADING

Trading has no limit. You can buy and sell just anything aslong as it is legal

Super-market or corner shop?

Seasonal products like umbrellas and raincoats. Now is thetime to begin the process of exporting such.

Clothing? Especially as festivities approach

Retailing of drinks. (Maybe a sub-distributor)

Sale of recharge cards? Low margin but profitable withvolumes


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SERVICES

Rental services

Event management.

Tutorial centres

Etc, etc


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The key question

For Achievers, what will it be?


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Thank you


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Contact:

Follow me atwww.ehissman.wordpress.com or ontwitter @ehissman

small business opportunities for cooperatives in nigeria

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