Journal of Agricultural Economics, Extension and Rural Development

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Sources of Capitalization of Cooperative Societies in Ebonyi State, Nigeria

1Inya Steve Uduma, 2 Solomon Enimu and 3Otu, Otu Akanu (Ph.D)




Accepted 4th November, 2014


The study investigates the sources of capitalizaton of cooperatives societies in Ebonyi State, Nigeria using both primary and secondary data. Secondary data were comprised of registered cooperative societies across the 13 Local Government Areas of the State obtained from the Department of Cooperative, Ministry of commerce and Industry while primary data sources on perceptions and challenges faced by cooperative were for cooperative officials. A multistage sampling technique was used in drawing a sample size of 130 cooperative societies in Ebonyi State due to the constraints of time and finds. Data were analyzed with the use of tables, percentages, frequencies and piecharts etc. A total of Eight thousand four hundred (8400) registered cooperative societies was recorded and the spread of these cooperatives across the 13 (L.G.As) of the state are shown in Table 1. Sources of capitalization of cooperative societies were mostly equity-based, with membership fees and membership Certificate  recorded 27.19% and 27.19 percentage  followed by deferred partnonase 14.43, Retention of unallocated reserve `14.16% Revolving finds 14.6%, common stock 1.46% and  preferred stock 1.0% respectively as showed in Table 2.  Infrastructural challenges which represented 17.80% ranked higher followed by Difficult in obtaining loan and political instability etc with share of 16.89 and 10.95 respectively (see Table 3 for details).  In view of the pivotal role of education in development, the study recommends demand driven Cooperative education for Cooperative officials and members with the intension of addressing some of the identified challenges. The need for adoption of external sources (debts) in funding and capitalization of Cooperatives provided there is a sound financial management to ensure optimal capital structure was also recommended. Also, government, Non Governmental Organizations (NGOs) and Commercial banks should encourage Cooperative societies by channeling funds for sustainable business development especially among the micro, small and medium scale businesses through cooperative societies. Government through its Public Private Partnership Initiatives (PPPIs) should intensify efforts in providing the enabling environment to enable the private sector invest in infrastructural developments with a view to addressing the dearth of infrastructure in the State.  


Keywords: Capitalization, cooperative, societies, cooperative education