PROBLEMS OF NIGERIAN COOPERATIVES

1. Poor management
2. Insufficient capital
3. lack of commitment
4. Absence of cooperation
5. Individualistic tendency
6. Dishonesty of cooperative leaders and committee members
7. Illiteracy
8. Unplanned and unprofitable investments
9. Lack of legal pressure
10. Lack of effective national integration of the nigerian cooperative movement
11. Wrong conception of what cooperatives are
12. Inadequate external and internal funding
13. Overdue loans
14. Personality and community clashes
15. Dishonesty of employees
16. Dilapidated infrastructures
17. Prevalence of small and unviable societies
18. Poor working condition of staff
19. Government intervention
20. Unhealthy competition from other business owners
21. Absence of qualified and trained cooperative officers
22. Absence of training/incentives for cooperative inspector
23. Lack of dedication among elected officers
24. Absence of statistical data in cooperative
25. Lack of business secrecy
26. Cash trading
27. Limited scope
28. Absence of economies of scale
29. Lack of discipline
30. Decline in technology
31. Limited scale
32. Lack of experience
33. Lack of motivation
34. Delay in decision
35. Denial of individual initiative
36. Indiscriminate membership
37. Problem of politics
38. High embezzlement rate
39. Lack of public confidence
40. Limited expansion
41. Lack of knowledge
42. Instability in business


HOW THESE PROBLEMS AFFECT NIGERIAN COOPERATIVE.

Poor management:
Generally, members of the management committee who are elected from members of the society lack business experience. These people lack managerial talent and this makes for the cooperative not to function efficiently. Also in some cases, these members who were elected may not show keen interest in the running of the cooperative. There is also delay in decision making as the leader lack business experience.

Insufficient capital:
The amount of capital that a cooperative can raise from its members is very limited because the membership is generally confined to a particular section of the society. Again due to low rate of return, the members do not invest more capital. Thus, cooperatives are not suitable for the large scale business which require huge capital. And also, due to lack of capital, the cooperative in the other hand cannot afford to get the benefits of professional management as their leaders lack managerial skills and talent.

Lack of commitment:
There is lack of total commitment/apathy among members. As cooperative is not a profit earning institution, members do show indifference attitude towards the cooperative and this is an obstacle in the way of its progress.

Absence of cooperation:
In most cases, there is absence of cooperation among members of the cooperative. Due to internal quarrels and individualistic tendencies- especially the Igbos, there is little or no cooperation spirit among the members which becomes the cause of business failure.

Dishonesty of cooperative leaders and committee members:
Basically, the management of the cooperative remains in the hands of the selfish and dishonest members and they take undue advantages of their powers. This has negative effects on the business.

Illiteracy:
There is poor member education and high level of illiteracy among members. Members lack experience. Most do not know the principles and rules of the cooperative so they create problem for it.

Unplanned and Unprofitable Investments:
Due to their members high level of illiteracy and the leaders' inexperienced status, the cooperative ventures into unprofitable investments and this causes the cooperative to be stagnant

Wrong conception of what cooperatives are:
Many members cannot distinguish between the cooperative and their political parties. Political parties get involved in it due to which the basic principle of the cooperative comes to an end. This leads to corruption of power and money in the society and may result in quarrels and disputes amongst the members thereby constraining the progress of the cooperative.

Inadequate external and internal funding:
Cooperative's financial strength depend on the capital contributed by its members and loan raising capacity from state cooperative banks. The membership fee is limited for which they are unable to raise large amount of resources as their members belong to the lower and middle class. Thus, cooperatives are not suitable for the large scale business which require huge capital as the external resources of the organisation is also limited.

Overdue loans:
This also emerges as a problem to cooperatives as members who took loan from the society could not pay back as at when due. At this juncture, the cooperative is faced with a serious problem.

Personality and community clashes:
Internal quarrels and rivalries among members is another limitation of cooperatives. As a result of these internal quarrels, personality clashes and tensions, general body members cease to take any interest in the working of the cooperative. All these frictions ultimately bring the cooperative to ruin.

Dishonesty of employees:
In most cases, the employees in the cooperative tend to be very dishonest, cunning and selfish. This leads to lack of confidence not only in the cooperative but beyond it as non-members wouldn't be motivated to join and this comes in the way of the development of cooperatives.

Dilapidated Infrastructure:
For the progress and continuity of cooperatives, there should be adequate infrastructure and enabling ground. But with reference to Nigeria infrastructural development status, one would see it is almost impossible for cooperatives to survive for long in the country as there is poor infrastructure and amenities to enable there business success.

Government intervention:
The inadequacy of capital and various other limitations make cooperatives dependent on the government for support and patronage in terms of grants, loans, subsidies etc. Due to this, the government sometimes directly interferes in the management of the cooperative and also audits their annual accounts. Sometimes government goes further to put a nominee in the board of management of cooperative. They influence the decision of the board which may or may not be favourable for the interest of the cooperative. Excessive state regulation, interference with the flexibility of its operation affects adversely the efficiency of the management of the cooperative.

Absence of qualified and trained cooperative officer:
Generally, cooperatives lack qualified and trained officers. This tends to be a setback to them as this officers do not know their left from their right. They remain dormant and leave the cooperative stagnated

Absence of training/incentives for cooperative inspector:
Cooperative inspectors lack training. They do not possess any special skill and due to the cooperative's limited capital, they cannot be sent to earn the benefits of good training. And as they remain untrained, they even worsen the condition of the cooperative causing more problems for it. Also the absence of profit incentive is an obstacle in the way of its progress.

Lack of dedication among elected officers:
The leaders and officers put up nonchalant attitude when it comes to matters concerning alleviating the cooperative because the business is not profit-oriented. These officers even have some other business elsewhere where they dedicate their time and thereafter see the cooperative as unimportant and make it somewhere they spend leisure time. This certainly has adverse effect on success rate of the cooperative society.

Lack of business secrecy:
The officers of cooperatives are generally so much exposed to the members that it becomes difficult for them to maintain proper secrecy. The affairs of the cooperative is openly discussed in the meeting and it is also compulsory to advertise the annual account and annual reports in newspapers. This somehow constrains the success rate of the cooperative because secrecy is very important for progress in business.

Cash trading:
The cooperatives sell their products to outsiders only in cash. But they are usually from the poor sections. These persons require to avail credit facilities which is not possible in the case of cooperatives. Hence, marketing is a short-coming for the cooperatives.

Limited Scope:
Like capitalism, the cooperative system cannot be extended to embrace the whole economic system. It has limited scope in the sense that it cannot cover the entire economic system. The principles of cooperative cannot be successfully applied to organize all types of economic activities. For example, cooperatives are not suitable for organising big industrial enterprises. It is also not suitable where the element of speculation plays a predominant role and where finer varieties with maximum skill are to be produced.

Absence of economies of scale:
Cooperatives are very small in size and at such do not have financial, managerial and technical resources. As a result of this, the advantages of large scale operation like joint stock company are not available to these cooperatives.

Lack of Discipline:
The egalitarian nature of the cooperative contribute to the lack of discipline as every member of the cooperative considers himself the owner of the business and at such inefficiency takes place and business suffers a loss.

Decline in technology:
Due to lack of capital, the cooperatives cannot use the latest technology in producing the goods and this causes low rate of demand and profit level.

Limited Scale:
Cooperatives cannot start its business on large scale due to many reasons. It produces on small scale and its cost of production remains high. Limited scale of production becomes the cause of loss.

Lack of Experience:
Generally, there is lack of experience to the members of the cooperatives. On the other hand, the cooperatives cannot hire the services of the experts due to its limited resources. Obviously, this poses a big problem to these cooperatives.

Lack of motivation:
Every cooperative is formed to render services to its members rather than to earn profit. This does not provide enough motivation to the members to put in their best effort and manage the cooperative efficiently.

Delay in Decision:
Generally there is delay in making various decisions about the business in cooperatives. Success is also determined by how quick and accurate issues about the business are treated. So delay in decision making has negative effect on the growth of cooperatives.

Denial of Individual Initiative:
In most cooperatives, this denial leads to lack of enterprenuership development which is a setback to cooperatives.

Indiscriminate membership:
Members are not enrolled into the cooperative based on business acumen, competence, efficiency or past experiences. Anybody can come out to be the leader or officer and this results in a situation where the cooperative will be making unprofitable and unplanned investments. Thus, this affects the growth of cooperatives.

Problem of Politics:
Many members of the cooperative cannot distinguish between the cooperative and their political parties. They mix politics with their activities and waste a lot of money

High Embezzlement Rate:
Fraud and embezzlement exist in a high scale in cooperatives. Few members of the cooperative may connive and misappropriate the organisation's funds for their personal interest.

Lack of public Confidence:
Generally, people do not have faith and confidence in the cooperatives. Since many cooperatives have failed, the people are reluctant to become members of cooperatives. The general apathy and indifference of people comes in the way of development of cooperatives.

Limited expansion:
Due to the limited capital, cooperatives suffer limitation to its expansion. Some cooperatives remain stagnated

Instability:
Frequent changes takes place daily in the members of the cooperative. This makes the business unstable and its a problem to the cooperatives

Development of cooperatives in Nigeria
http://articlesng.com/development-cooperatives-nigeria/

Co-operative Society had their origin at the end of the 18th Century, when great industrial changes were taking place. Until the 18 Century, most of she manufacture was done in the home, under what is known as the Domestic System
but as a result of the Industrial Revolution, the Factory System of manufacture developed, and went to factories to wok for Wages, instead of being their own masters at home. Much social distress and unemployment accompanied the great industrial changes which situations were made worse by the effects of the Revolutionary and Napoleonic Wars which brought in untold hardship after the conclusion of peace in 1815.

According to Whitehead (1980), the idea of co-operation arose during the years of distress. The aim of the early co-operators was to remedy the distress of the working class by obtaining some of the benefits of the machinery and
greater production for the workers. Two methods were attempted in order to do this. To set up workshops owned and controlled by the workers themselves whereby the employees where to subscribe the capital, run the factory under direction of elected foremen and to share in the profits made from the sale of their products. This idea was borrowed from the French at the time of the French Revolution, and in it we see the origin of what is called today
https://businessplanhub.com.ng/the-co-operative-society-movement/