International Journal of Academic Research

Management (IJARM)
Vol. 2, No. 4, 2013, Page: 109-124, ISSN: 2296-1747
Helvetic Editions LTD, Switzerland
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Does Cooperative Financing Method Influence

Micro-credit delivery? An Empirical
Investigation of South Western States of
Nigeria

Authors
Oladejo Moruf
Management Sciences/ Management and Accounting/ Ladoke Akintola
University University

Email: moolad02@yahoo.co.uk
Ogbomoso, 234, Nigeria

Abstract
This paper appraises the influence of Cooperative Societies as microcredit delivery channel in selected
western states of Nigeria with a view to identify the role of Cooperatives in the revised Microfinance policy
of the Nigerian government. Studies over the years have shown the positive impact of cooperative societies
as micro credit delivery channel and vehicle for poverty alleviation. The revised microfinance policy
framework (2011) recognized the existing informal financial institutions like credit Unions and financial
Cooperatives but placed more emphasis on MFBs because they are under the regulatory and supervisory
purview of the Central Bank of Nigeria (CBN). Appraising the influence of Cooperative Societies on credit
delivery at a time when the government seems hesitant of channeling fund for cooperative development
and the resultant failure of the microfinance schemes in Nigeria becomes imperative. The data collected
through the questionnaires were sorted edited and coded in a table. Both descriptive and inferential
statistics were used to present and analyse the data. Purposive sampling technique was adopted to select
the sample size. The selection of the 300 Cooperative Societies was done in a simple manner as such that
all geo-political zones in each state were adequately represented while the 600 members selected on the
basis of two members per one Cooperative Society. Analyses of Variance (ANOVA) as well as t-test were
used to test the hypothesis on the cross sectional perception of SMEs members and leaders of cooperative
societies on its impact as a micro credit delivery channel in the six selected states of the south west
Nigeria. The mean differences were significant at 5%. Also the t-calculated value of 3.93 which is greater
than that of tabulated value of 2.25 shows statistically that the mean perception of leaders is significantly
different from that of the members.

Key Words
Cooperative Financing Method, Micro Credit Delivery, Nigeria, Microfinance Policy.

in

International Journal of Academic Research in Management

Volume 2, Issue 4, 2013, ISSN: 2296-1747

I. INTRODUCTION
The continued lack of the Nigerian government attention to cooperative development due to
ignorance of its micro credit delivery power has been a subject of concern to the accountants,
bankers and other players in microfinance. Mean while the micro finance power of cooperative
societies cannot be overemphasized. This is because Small and Medium scale enterprises (SMEs)
have been promoted greatly by Microfinance Institutions (MFIs), the major and most
geographically spread of which are cooperative societies. Apart from ready access to microcredits,
Small and Medium Scale Enterprises (SMEs) obtain loans with soft and convenient term. Adelaja
(2006) noted that the current banking consolidation programme though desirable, is likely to be
more of threat than opportunity for MSMEs. Therefore there is the need to embrace the
cooperative options. Most members of cooperative societies engage in one economic activity or
the other and thus contribute in no small measure to economic outputs of the nation. Economic
development is better achieved through cooperation to solve the problem of scarcity.
According to Kareem, Arigbabu, , Akintaro, & Badmus, (2012) there is hardly any workplace
in Nigeria today particularly government establishments, where a cooperative society is not
operational. It's quite effective because transactions of money are carried out in conjunction with
employers of labour on behalf of their staff. For example, staff's savings into the co-operatives are
deducted at source and repayment of loans is done through deductions from staff salaries as
requested by the operators of the societies (Godwin 2011). In the same vein, there are cooperative societies that have been set up by private initiative, i.e. group of people seeking a
common economic goal and hoping in the long run to improve their economic status.
Invariably, cooperative societies remain the better alternative to economic reconstruction of the
government. Most of the Non-Cooperative Groups (NCGs) often die in the midway without
fulfilling the economic objectives for their establishment. The study attempts to explore the
various economic potentials of cooperative societies especially the microfinance power in
promoting Small and Medium Enterprises (SMEs) as well as economic production capacity of
cooperative societies. Despite its microfinance power, the Cooperative Societies as an informal
source of finance has serious setbacks. One of these problems is the inadequate amount of capital
that can be raised from the members of the cooperative society when compared to the need of
small scale industrialists. There are factors; however that have militated against the efficiency of
cooperative sector as an economic tool of microfinance, job creation, poverty eradication and
wealth creation. Some of these are bad leadership, lack of mutual training and exposure to
modern management techniques, ambiguous government role in the cooperative movement, as
well as the challenges of the changing world.
Kareem, Arigbabu, , Akintaro, & Badmus, (2012) concluded that co-operative societies have
effect on members welfare and the role of co-operative society in poverty reduction and capital
formation cannot be overlooked in the development process of any country particularly the less
developed countries like Nigeria. However the suggestion for government assistance to cooperative society to improve their capital base through the annual budget of the country may
require further empirical investigation.
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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

A. Objectives of the Study

In the light of the above, it is the intention of this study to appraise the impact of cooperative
societies as a micro-credit delivery channel, especially in the promotion of micro enterprises in
Nigeria. The specific objectives to be pursued in achieving the main objective are:
1.

To examine the influence of cooperative of society as a micro-credit delivery strategy

2.
To assess if there a significant difference in the impact of cooperative societies as a
microfinance delivery channels across states in Nigeria.

B. Research Hypothesis
HO: There is no significant difference in the impact of Cooperative Societies as a microfinance
delivery channels across states in Nigeria.

II. LITERATURE REVIEW

The best way of pushing the limit of economic problem of scarcity is by working together. This
is because more can be accomplished when people coordinate their efforts with each other take
concerns and talents of other into considerations (Reeve, 2003). Invariably, cooperative societies
remain the better alternative to economic reconstruction of the government, but its vast
potentials have always been jettisoned by the Nigerian Government.
However Cooperatives have been denied attention by the Nigeria government over the years
despite the economic impact of the cooperative method. For instance Agbo and Chidebelu (2010)
assessed the extent to which cooperative societies had access to the special intervention fund
administered by the Nigerian Agricultural Cooperative And Rural Development Bank (NACRDB)
Ltd. The study was carried out between March and September, 2005, on six randomly selected
states, one from each of the six geopolitical zones into which Nigeria has been divided. Sixty
cooperative societies were randomly selected for the study from each state covered; thirty of them
with access and thirty without access to the intervention fund, on the whole 360 cooperative
societies were studied. The Levenes test for equality of means showed that the difference
between the means of the two categories of cooperative societies were statistically significant at
5% probability level. Likert scale rating confirmed that the operational guidelines of NACRDB
such as minimum credit requirement, type of crop grown, approved loan size, and insurance
cover affected access to the intervention fund.
In the year 2005 the Federal Government domiciled the sum of N50 billion with the NACRDB
Ltd to lend to cooperatives and other farmer organizations at concessionary interest rates. A
recent study of the patterns of disbursement of the N50 billion intervention fund showed that
more than 75% of the fund went to private farmers and other farmers organizations that are not
cooperative societies (Onyeagocha, 2008). Some factors have been responsible for the poor access
of cooperative societies to the intervention fund domiciled with the NACRDB Ltd. Socio-economic
characteristics of cooperative societies have been singled out as the major constraints to

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International Journal of Academic Research in Management

Volume 2, Issue 4, 2013, ISSN: 2296-1747

cooperative societies access to services of agencies established to help them in Nigeria (Ijere,
1977; Okafor, 1979). Such socio-economic characteristics include membership size, the
cooperatives asset base and membership participation. In his own study, Ambruster (2001)
isolated, among others, the system of delivery of the services needed by cooperatives, the process
used to determine the sector that needs intervention, and the mode of selection of beneficiaries as
the most critical factors affecting cooperatives access to development resources.
Studies have shown that Cooperative method provides the best funding alternative for SMEs
than all other economic grouping and schemes (Akinwumi, 2006; Oladejo, 2011; Oluyombo, 2012).
The extent to which the cooperative method can be explored and integrated in the Nigerian
microfinance policy is expected to be addressed in this study.
A. Evolution of Informal and Formal Cooperative Finance in Nigeria
The modern microfinance according to Dunford (2006) has roots in the cooperative movement.
Further to this is the observation of Kevin, Louis & Mark (2000) that one means for the
entrepreneurial firms to overcome the constraint of access to credit is by cooperating with either
other entrepreneurial firms or possibly with larger, established, resource-rich firms. Cooperative
is as old as man. Epetimehin (2006) traced the development of cooperative societies to the
beginning of civilization since early people had to learn to work together to meet their common
need or perish. Asaolu (2004) believed that modern cooperative societies came into existence in
the first half of the 19th century during the Industrial Revolution in Britain. The first successful
cooperative societies call Rochdale Equitable pioneers was formed in 1844. Ancient records show
that Babylonians practice cooperative farming and that Chinese developed saving and loan
associations similar to those in use today. Roy (1964) traced that history of cooperative societies
to the old Egyptian Empire 3000 B.C.
Abrahamson (1976) submitted that Robert Owen often regarded as the father of cooperation
was credited with developing a new view of society which he described in four essays that
received wide recognition. Owen created the environment in which four basic cooperative ideas
emerged in embryonic form. These ideas are:
(i) Associated Efforts: Which centres on bringing people together in an effort to deal with the
problems confronting them.
(ii) Voluntary Approach: People are free to join or not, but Owen believed that through
educational efforts many of them would come to understand the merit of cooperative ideas.
(iii) Democratic Control: People could be relied upon to make the right decisions in governing
themselves self-governance idea.
(iv) Service to Members Emphasized: The communal society should identify members need
and should seek to satisfy them. Production should be for use and not for profit.
However modern cooperative enterprise differs in some basic ideas as advocated by Robert
Owen. Todays cooperatives according to Abrahamsen (1976) are highly specialized, restrict
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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

operations to specific member needs and are very much a part of the exchange economy. Modern
cooperative operations are oriented towards accumulation of private property and the sharing of
benefits in proportion to participation in the business. Also members are expected to provide a
substantial share of the capital necessary to start and operate their cooperative.
In 1937 the first registered cooperative society, the Gbedun cooperative produce marketing
society near Ibadan, Oyo State was thus established. This makes Oyo State the cradle of modern
cooperation in Nigeria. The early types of cooperative societies were mainly agricultural
cooperatives. The activities of a farmers organization known as Agege planters union operating
in the then Lagos province became popular.
These groups were organized into cooperative societies to provide them with organizational
means for helping them with credit, storage, transport, chemicals and herbicides, and marketing
of their produce at higher prices for their improved well-being. In the old western region (now
western states) of Nigeria cocoa producer cooperatives accounted for 40% inputs supply and
distributions in 1950s and 1960s. Thrift and credit cooperative societies started among
missionaries in Abeokuta and among traders and farmers in the old Calabar province. The
impressive performance of the savings and credit cooperatives can be seen in the establishment
of cooperative banks in the western, eastern and north Nigeria respectively. Despite the loss of
cooperative identity bank the then cooperative to recent recapitalization in the banking sector it
obvious that credit cooperative have made and will continue to make significant impact as the
rue banks of the commoners.
According to the cooperative development policy document of 2002, issued by the Federal
Ministry of Agriculture and Rural Development (FMARD) membership of cooperative societies in
the country has increased astronomically. Between 1939-40 there were only 32 registered
cooperative societies with a total of 1,203 members all over the country. This increased to 181
with total members of 5,908 between 1943 and 1944. In 1990 there were reportedly 29,000
registered cooperative societies with about 2.6million members. In the year 2000, it was
estimated that over 50,000 cooperative societies existed with over 5 million members.
B. Economic Importance of Cooperative Societies
Cooperative society provides opportunities for millions of people in all economic sectors,
particularly in the rural and urban low income groups, to escape poverty in a sustainable ways.
Statistics are not available, but is a general fact that cooperative are second only to government
in employment, particularly in the southwest of the country. And certainly there can be no bigger
provider of employment in the formal sector than the cooperatives in their various types and
forms. Cooperative is meant to provide its members with some benefits and opportunities which
ordinarily will cost more if it is to be derived outside the cooperatives. Oludimu et al (2001)
believe that cooperation means that some activities can be more effectively and economically
performed by a group rather than by an individual. Therefore cooperative societies are voluntary
associations in which people come together to enhance their economic interest. Rana (1970)

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viewed cooperatives as a form of business organizations which is established by members on the

basis of equality to promote their economic and social interest. King (1993) defined cooperative
society as a formal organization of people with similar ideas, consciously working together for
common aims, and guided by a set of principles which distinguish their activities from other
forms of human endeavours. According to Asaolu (2004) cooperation is of course, the basic social
process. Abrahamsen (1976) viewed cooperation as working together to achieve a common end.
According to Kareem et al (2012), Cooperative Societies are formed with the idea of mutual cooperation. Every co-operative society is formed to render service to its members rather than to
earn profit.
The U.S.A Cooperative Business Survey Report (2005) revealed that the economic impact of
U.S - based cooperative businesses is significant, reflecting the ubiquity of co-operatives, the
large number of Americans who are their owners or customers, and the role co-ops play in
generating business activity, including jobs and economic growth. For the six key sectors that are
the focus of this report, agriculture, credit unions, farm credit, electric utilities, grocery and
housing, the data are impressive. From the report, there are 21,367 cooperatives in the six
sectors. These cooperatives have more than 127.5 million members. Cooperatives in these six
sectors employ considerably more than 500,000 Americans, with aggregate payrolls of more than
$15 billion annually. These cooperatives generate total annual revenues in excess of $211.9
billion. Among individual sectors: Agriculture co-ops have a gross business volume of more than
$111 billion per year and 2.8 million members. The Farm Credit System has approximately $125
billion in assets and $96 billion in loans outstanding. Credit unions have $668 billion in assets
and more than 86 million members, who receive billions of dollars in benefits annually from
lower loan rates and higher savings rates. Credit unions have $443.5 billion in loans outstanding.
Electric utility co-ops serve 37 million people and their lines cover more than three quarters of
the U.S. land mass. Food and grocery co-ops generate $33 billion in annual revenues while retail
food co-ops alone pay back an estimated $4 million a year to their members. Housing cooperatives
have combined budgets in excess of $11 billion, and make an estimated $1.2 billion in property
improvements each year.
Kevin, Louis and Mark (2000) conducted a research study, using a seven-nation (Australia,
Finland, Greece, Indonesia, Mexico, Norway, and Sweden) sample, found that entrepreneurs
from feminine, collective, and uncertainty-avoiding societies have a greater appreciation for the
strategic importance of cooperative strategies than their counterparts. Moreover, entrepreneurs
from feminine societies place greater emphasis on partner commonality in terms of objectives and
values to ensure cooperative success, whereas those from individualistic societies emphasize
contractual safeguards.
According to Narayan and Petesch (2009) Co-operatives are in many countries as significant
social and economic actors in national economies, thus making not only personal development a
reality, but contributing to the well-being of entire populations at the national level. Cooperatives have significantly contributed to economic growth throughout the world. Furthermore,
the United Nations estimated in 1994 that the livelihood of nearly 3 billion people, or half of the
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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

worlds population, was made secured by co-operative enterprises. Nearly 800 million individuals
are members of cooperatives today, compared with about 184 million in 1960. They account for an
estimated 100 million jobs and are economically significant in a large number of countries
providing foodstuffs, housing, financial and a wide variety of consumer services as put by
International Labour Conference, Report (2001).
C. Cooperative development policy for Nigeria
The Federal Ministry of Agriculture and Rural Development issued a policy on cooperative
development in August 2002 to facilitate economic development in Nigeria. The policy takes
cooperatives as unique organization with both social and economic objectives, uphold the
principles of cooperatives as adopted by ICA, 1995 and adopt cooperatives as a vehicle for
national development. The policy reviewed the performance of cooperative sector since the
inception of formal cooperation in Nigeria in 1935.
Highlights of the performance of the cooperative sector to date have been given as follows:
(i) Development of export crops production in quality and quantity leading the way in foreign
exchange earnings from cocoa, palm produce, groundnuts cotton rubber etc.
(ii) Minimization of exploitation of producers by middlemen and traders. All these were done
by cooperative societies.
(iii) Development of indigenous banking which favourable compete with foreign banks and
break their monopoly in financial intermediation. We have cooperative bank (now Skye Bank,
Nigeria Agricultural Credit, Cooperative Rural Development Bank (NACRDB) etc.
(iv) Mobilization of enormous financial resources from small cooperative savers thus creating
thrift and credit systems that have helped millions of small scale industrialist to establish
businesses and become house owners.
(v) Formation of strong viable cooperative societies in urban and rural areas throughout the
country. Thus allowing for rural development.
(vi) Creation of mass enlightenment and inculcation of democratic principles and practices
through membership education and cooperative management. Every registered society maintains
democratic methods of decision making.
(vii) The creation of many cooperatives apex bodies such as Cooperative Federation of Nigeria
(CFN), Cooperative Finance Agencies (CFA), Worldwide Insurance Company, Cooperative Trust
and Investment, Rainbow Travels Agency etc have made many for reckoning in the Nigerian
private sector economic activities.
(viii) Linkages with the government, non-government organizations and international and
intergovernmental organizations have further strengthened cooperatives and assisting in the
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International Journal of Academic Research in Management

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objective of promotion of economic opportunities for their members and poverty alleviation.
D. Problems and Challenges of Cooperatives in Nigeria
One major obstacle to Cooperative development in Nigeria is policy neglect. The Nigeria
government is not attracted to the cooperative financing strategies and has in most case
preferred some other economic groups similar to this in her poverty eradication programme.
There are some factors that affect the performance of Cooperative Societies in discharging micro
credit roles effectively and perhaps the reasons for lack of interest by the policy makers in
Nigeria. Generally the capacity of Cooperative Societies to provide fund to the poor and low
income group is limited by inadequate capital base (Asaolu 2004). The other critical element
according to Akinwunmi (2006:3) was leadership. If there is purposeful leadership, if leaders are
transparent, dedicated and truly serving, the cooperative society will succeed. Most leaders are
not focused and in most cases engage in embezzlement of the little fund available making
members to lose interest in this viable economic method.
Poor accounting and record keeping has crippled the activities of most cooperative societies in
Nigeria (Asaolu 2004, Oladejo 2008, Lawal 2006). Most cooperative societies are not yet exposed
to modern technologies like computers not to talk of electronic payment system that could have
facilitated the operations and improved the performance of the cooperative societies. There are so
many areas where information technology can impact well on the operations of cooperative
societies. Most leaders have not made this to work for fear of exposure of their excesses. Most
offices of department of cooperative services were yet to be equipped with computers and other
Information Communication Technology (ICT) that are valuable in enhancement of cooperative
operations like accounts, internal checks, record keeping including updated data base of all
cooperative societies and their activities in each state. This would facilitate interstate cooperative
transactions and information update.
Another challenge facing the Nigerian cooperatives is non taping from the opportunities in
mortgage financing that would have assisted members housing and accommodation problem.
Although few cooperatives especially in Lagos state and Ogun state engage in property business,
limited capital base might be responsible for full mortgage financing.. Generally it is seen that
co-operative societies do not function efficiently due to lack of managerial talent as submitted
Kareem et al (2012).

III. METHODOLOGY
The study made use of cross-sectional survey design. The study area was Lagos, Southwestern
Nigeria; a choice based on its strategic location as the commercial nerve of Nigeria.
This section focuses on the research techniques adopted and used for this study with the aim of
achieving the research objectives. Survey research design was chosen because the sampled
elements and the variables that are being studied are simply being observed as they are without
making any attempt to control or manipulate them. Data were collected from a sample of
Cooperative leaders in the six states of south western Nigeria to determine the relationship
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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

between Cooperative method and microcredit delivery. The independent variables are
Cooperative financing method while the dependent variable is the microcredit delivery. The
ordinary least square equation can be expressed as follows:
Y = f (X)

............................................................... (1)

Explicitly, the model is specified as:

Yit = 0 +1 CFMit+ eit

........................................ (2)

Where Y is the dependent variable proxied by credit delivery efficiency and X is the
independent variable represented by the Cooperative financing method (CFM)
However, the study was restricted the six states of south western Nigeria. The choice south
western Nigeria stems from the fact that the concentration and predominance of Cooperative
societies in south western Nigeria is easily identifiable. For effective coverage and lower cost,
purposive sampling technique was used to select the participating Leaders in Cooperative
Organizations. A simple random sampling technique was used to select a total of 300 cooperative
Societies in the selected states of the South Western Nigeria. The selection of the 300 cooperative
societies was done in a simple manner as such that all geo-political zones in each state were
adequately represented while the 600 members selected on the basis of two members per one
Cooperative Society.
The data collected though the questionnaires and interview were sorted edited and coded in a
table. Both descriptive and inferential statistics were used to present and analyses the data. The
Likert scale was used for responses to the hypothesis questions using weights 5,4,3,2 and 1 to SA,
A, D, S D and U respectively. Thus a state with 8 zones had at least 8 cooperative societies
selected for each zone. Analyses of Variance (ANOVA) as well as t-test were used to the
hypothesis on the cross sectional perception of members and leaders of cooperative societies on its
impact as a micro credit delivery channel in the six selected states of the south west Nigeria.

IV. DISCUSSIONS OF THE FINDINGS

The study attempted to appraise the influence of Cooperative Societies as micro-credit delivery
channel with a view to provide solutions to problems in the Nigerian situation. The total number
of cooperative societies in the south-west was 48,856as at 24th of September, 2012 as per
information collected from the various directorates of cooperative services in the six states of the
south-west. Oyo state had the largest of 17,867 cooperatives with the Lagos state having the least
with 2261 cooperative societies as shown in the Table I below.

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TABLE I: NUMBER OF COOPERATIVE SOCIETIES IN THE SOUTH WESTERN NIGERIA AS AT 24TH OF SEPTEMBER,
2012.
SOURCES: OFFICE OF DIRECTORS OF COOPERATIVE SERVICES IN EACH STATE
STATE
Ekiti
Lagos
Ogun
Ondo
Osun
Oyo
Total

NO. OF COOPERATIVE SOCIETIES

9233
2261
7175
5287
5032
17867
48,856

From the 300 questionnaire distributed to the selected cooperative leaders only 241 were
completed and returned. This constitutes 80% of the total questionnaire and found to be adequate
for the purpose of the study. Also only 456 questionnaires out of the 600 sent to the selected
Members SMEs were completed and returned. This represents 76% of the total questionnaire
distribution which is considered appropriate for the purpose of the study (Table II ab).
The analysis of the operating performance of the four selected cooperative societies in Ogun
state revealed that the cooperative societies have performed well in the area of loan
disbursement to the members to expand their business. Most cooperative societies also give out
investment loan, project development loan as well as education loan to the needy members.
Although cooperative organizations are not for profit and not for charity, the profit performance
to the total income generated over the years is not forthcoming. The ratios of operating cost to the
total income for the selected cooperative societies were on the higher side. This reflected in the
poor net surplus and the resulting dividend paid to members over the years. This suggests the
need for the improvement in the performance of the cooperative societies as proclaimed some
leaders in Table III.
From the Table IV of mean of mean perception score of respondents SSEs on the impact of
cooperative societies as a microfinance delivery channels across six states in the South Western
Nigeria, over 76.5% had mean perception score of 50 or more, indicating the majority of the
respondents with high mean perception score in the study area. Therefore we can conclude that
leaders of cooperative societies perceived cooperative societies as vibrant micro credit delivery
channel across states differently. This corroborated the study of Asaolu 2004 in the selected areas
in Osun State that confirm the power of cooperative societies as a micro finance delivery channel.
The result presented in Table V shows that the, mean perception for members is 63.66 and that
of leaders is 68.33 with standard deviation of 16.99 and 9.74 respectively. The mean differences
were significant at 5%. Also the t-calculated value of 3.93 which is greater than that of tabulated
value of 2.25 shows statistically that the mean perception of leaders is significantly different
from that of the members. This shows that statistically, the null hypothesis is thus rejected.

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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

Table VI shows the result of the Analysis of Variance on the differences in the impact of
cooperative societies as a microfinance delivery channel across the six states of Nigeria revealed
the F- calculator value of 2.32 whose probability close to zero percent suggest that there is a
difference in the impact of cooperative society as a microfinance delivery channel across the state
in Nigeria. The multiple comparison of the differences showed that the mean difference is
significant at 0.5% between Lagos, Ekiti and Ondo State., also with Ekiti and Lagos and Oyo
State. The same thing with Ondo,Lagos and Oyo State. Oyo has significant difference in the
impact compared to Ekiti, Ondo and Osun State so also was the impact in Osun State
significantly different to that of Oyo State.
The cooperative societies have significantly impacted on sustainable development of Nigeria,
and that cooperative societies are significantly vibrant in fund mobilization and financial
intermediation. This corroborated the earlier work of Abrahamsen 1976; Asaolu 2004;
Epetimehim 2006; Kareem et al 2012.

TABLE II A: QUESTIONNAIRE DISTRIBUTION TO LEADERS OF COOPERATIVES SOCIETIES.

SOURCE: FIELDS SURVEY 2013.
Responses
Ekiti
Lagos
Ogun
Ondo
Osun
Oyo
Total

Sent
50
50
50
50
50
50
300

Returns
38
40
41
38
39
45
241

% of Returns
76%
80%
82%
76%
78%
90%
80.3%

TABLE II B: QUESTIONNAIRE DISTRIBUTION TO SMES MEMBERS OF COOPERATIVES SOCIETIES.

SOURCE: FIELD SURVEY 2013.
Responses
Ekiti
Lagos
Ogun
Ondo
Osun
Oyo
Total

Sent
100
100
100
100
100
100
600

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Returns
68
84
88
69
65
82
456

% Of Returns
68%
84%
88%
69%
65%
82%
76%

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TABLE III A : ANALYSIS OPERATING PERFORMANCE OF THE SELECTED COOPERATIVE SOCIETIES IN OGUN STATE
BETWEEN THE YEARS 2003 TO 2007.
SOURCES: AGM REPORTS AND ACCOUNTS OF THE SELECTED COOPERATIVE SOCIETIES FOR THE YEAR 2003 TO
2007.
Performance
indicators
Gross profit
Expenditure
Surplus
Dividend
Total Asset
Fixed Asset
Current Asset
Current
Liabilities
Share Holders

2003
#
10455671
7089146
3639125
1676925
179128205
21104102
68309595
5737544

2004
#
16494597
13792411
5660325
2352353
121771912
24816567
97136756
4551464

2005
#
19984690
16837956
6387133
2454680
135339032
40886035
102462401
12058982

2006
25737378
17817613
8094246
3619671
166829789
64600742
109998816
13310608

2007
#
23733188
15855384
8254573
3486536
193105727
79387079
113674140
16392132

58565748

105861508

154833028

166705068

230004385

TABLE III B: LOAN DISBURSEMENT TO MEMBERS AND REPAYMENT BETWEEN THE YEARS 2003 TO 2007 IN THE
SELECTED COOPERATIVE SOCIETIES IN OGUN STATE.
SOURCES: AGM REPORTS AND ACCOUNTS OF THE SELECTED COOPERATIVE SOCIETIES FOR THE YEAR 2003 TO
2007.
Loan status
Loan Granted
Loan Repaid
Loan Unpaid
Unpaid

2002
#
102539491
82159682
20399809
19.9%

2003
#
156281073
94609940
61671133
39.5%

2004
#
173260790
95289476
78000000
45%

2005
#
176678334
101673624
75004710
42.5%

2006
#
185347408
104186607
81160801
43.7%

TABLE IV: MEAN PERCEPTION SCORE OF RESPONDENTS ON THE IMPACT OF COOPERATIVE SOCIETIES AS A MICRO
FINANCE DELIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.
Perception score
< = 30
31-40
41-49
50 or more
Total

FREQUENCY
13
43
51
349
456

PERCENTAGE
2.9
9.4
11.2
76.5
100.0

TABLE V: T- TEST SHOWING DIFFERENCES IN THE PERCEPTION OF MEMBERS AND LEADERS ON THE IMPACT CS AS
A MICRO FINANCE DILIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.
Category
Members
Leaders

N
456
240

Mean
63.6579
68.3250

STD
16.99325
9.73641

DF
694

t-cal

t-tab

Remarks

3.93

2.25

Significant

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Does Cooperative Financing Method Influence Micro-credit delivery? An Empirical Investigation of South Western
States of Nigeria
Oladejo Moruf

TABLE VA: HYPOTHESIS ONE: ANALYSIS OF VARIANCE (ANOVA) SHOWING DIFFERENCES IN THE IMPACT CS AS
A MICRO FINANCE DELIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.
Parameter
Between Groups
Within Group

Sum of
Squares
3305.997
128084.63

DF

Mean Square

Remarks

5
450

661.199
284.633

2.323

<.05

Significant

TABLE V B: ANALYSIS OF VARIANCE (ANOVA) SHOWING MULTIPLE COMPARISON OF THE DIFFERENCES IN THE
IMPACT CS AS A MICRO FINANCE DELIVERY CHANNELS ACROSS 6 STATES IN SOUTH WESTERN NIGERIA.
I State J State
Lagos

Ekiti

Ondo

Oyo

Oyo

Osun

Ogun

Ekiti
Ondo
Oyo
Osun
Ogun
Lagos
Ondo
Oyo
Osun
Ogun
Lagos
Ekiti
Oyo
Osun
Ogun
Lagos
Ekiti
Ondo
Osun
Ogun
Lagos
Ekiti
Ondo
Osun
Ogun
Lagos
Ekiti
Ondo
Oyo
Ogun
Lagos
Ekiti
Ondo
Oyo
Osun

Mean
Difference
(I-J)
-5.5861*
-5.7236*
1.88242
-3.9007
-3.0941
5.58613*
-.13747
7.46855
1.68544
2.49198
5.72360*
.13747
7.60602*
1.82291
2.62945
-1.88242
-7.46855
-7.60602*
-5.78311*
-4.97657
-1.88242
-7.46855
-7.60602
-5.78311
-4.97657
3.90070
-1.68544
-1.82291
5.78311
.80654
3.09416
-2.49198
-2.62945
4.97657
-.80654

Std Error

Sig.

2.75214
2.74109
2.78701
2.61909
2.57351
2.75214
2.88286
2.92656
2.76711
2.72401
2.74109
2.88286
2.91617
2.75613
2.71285
2.78701
2.92656
2.91617
2.80180
2.75924
2.78701
2.92656
2.91617
2.80180
2.75924
2.61909
2.76711
2.75613
2.80180
2.58952
2.57351
2.72401
2.71285
2.75924
2.58952

.043
.037
.500
.137
.230
.043
.962
.011
.543
.361
.037
.962
.009
.509
.333
.500
.011
.009
.040
.752
.500
.011
.009
.040
.752
.137
.543
.509
.040
.756
.230
.361
.333
.072
.756

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95%
Confidence
Lower Bound
-10.9948
-11.1105
-3.5948
-9.0479
8.1517
.1775
-5.8030
1.7171
-3.7526
-2.8614
.3367
-5.5281
1.8750
-3.5936
-2.7020
-7.3596
-13.2200
-13.3370
-11.2894
-10.3992
-7.3596
-13.2200
-13.3370
-11.2894
-10.3992
-1.2465
-7.1235
-7.2394
.2769
-4.2825
-1.9634
-7.8453
-7.9609
-.4460
-5.8956

95 %
Confidence
Upper Bound
-.1775
-11.1105
7.3596
1.2465
1.9634
10.9948
5.5281
13.2200
7.1235
7.8453
11.1105
5.8030
13.3370
7.2394
7.9609
3.5948
-1.7171
-1.8750
-.2769
.4460
3.5948
-1.7171
-1.8750
-.2769
.4460
9.0479
3.7526
3.5936
11.2894
5.8956
8.1517
2.8614
2.7020
10.3992
4.2825

121

International Journal of Academic Research in Management

Volume 2, Issue 4, 2013, ISSN: 2296-1747

V. CONCLUSION
The results of hypotheses tested showed there is no significant difference in the impact of
Cooperative Societies as a microfinance delivery channels across states in Nigeria.
In the light of the above the following suggestions are considered a viable options to solving the
identified constraints.
(i)

SMEs should be encouraged by the government to join or form cooperative societies

which should embody all principles of cooperation to facilitate access to fund and
promote

(ii)

Cooperative potentials could be explored by attempting a synergy of Cooperatives

and Microfinance banks for improved credit delivery efficiency

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Oladejo Moruf

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International Journal of Academic Research in Management

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AUTHORS BIOGRAPHY
.MR OLADEJO MORUFU OLADEHINDE is currently a lecturer
in the
department of Management and Accounting of Ladoke Akintola University of
Technology (LAUTECH), Ogbomoso, Oyo state Nigeria. He has MSC in Accounting,
MBA and BSc in Accounting from Olabisi Onbanjo University, Ago Iwoye, Ogun
state Nigeria. He is an associate member as well as examiner to both the Institute
of Chartered Accountants of Nigeria (ICAN), and the Chartered Institute of
Taxations of Nigeria (CITN). He is pursuing his Phd in Management and Accounting of the Ladoke
Akintola University of Technology (LAUTECH), Ogbomoso, with specialisation in Accounting and Epayment system. His research interests include Microfinance, Financial Institutions Analysis and
electronic payment system. He has published papers in microfinance, accounting and e-commerce.

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124