Comparative Analysis of Savings Mobilization in Traditional and Modern Cooperatives in South East, Nigeria

Abstract

The study was carried out in the South East of Nigeria. The study compared the sources of savings and the amount mobilized by traditional and modern cooperatives in the study area. The study covered 36 cooperatives out of which were 18 modern and 18 traditional. These cooperatives were selected from six agricultural zones of Ebonyi and Enugu States. Thirty six leaders of the associations were purposively selected and 180 members of the cooperative were sampled in both formal and informal associations. Both primary and secondary data were used. Primary data were collected through the use of questionnaires design differently for the leaders and members of both forms of the cooperatives while secondary data were obtained form available financial records of the associations. The data were analyzed by using percentages and t-test. The findings of the study showed that the two forms of the cooperatives mobilized savings through contributions paid by individual members on pre-arranged periods and other sources such as registration fees, fines, levies and interests generated from loans given by the associations. Both forms of cooperatives also mobilized savings from group agricultural investment and other economic activities. Traditional cooperatives excelled in amount of money mobilized through contributions from individual members, group investment in other economic activities and an alternative sources of fund such as registration fees, fines, levies and interest on loans, while modern groups performed better in group agricultural investment. In conclusion, the study revealed that indigenous associations had more sources of savings and performed excellently in mobilizing savings than modern associations. Therefore traditional cooperatives should be encouraged and further developed by government by inoculating the principles and practices of cooperatives into these groups so that they could serve as financial pools to the rural dwellers. Keywords: Traditional cooperatives, Registration fees, Fines, Levies and Interest on loans.