Financing Agricultural Enterprises By Cooperative Societies In Mbaise Area Of Imo State, Nigeria

Abstract

The study was on cooperative societies financing of agricultural enterprises in Mbaise Area of Imo State, Nigeria. The objectives includes, identification of sources of finance for the cooperative societies and types of agricultural enterprises financed, profitability of the enterprises and the members or loan beneficiaries performance in repayment of loans. Ten cooperative societies and eighty members of the societies were sampled and used as source of data. Questionnaire was administered to both the officers of the cooperatives and eighty members for the primary data. Percentages, means and profitability analysis was carried out on the data generated. The sources of fund for the societies include subscription for shares, savings by members, monthly dues, fines/penalties, grants from government and funds for on lending by the community banks in the study area. The cooperatives finance such activities as agricultural production, fertilizer, pesticide and herbicide supplies among others. The average amount disbursed during the study period was N128,306.66 at an interest rate of 10% per annum. A total of N11,290,986.30 was disbursed both interest and principal. The repayment performance was 94.62% with only 5.38% default. The poultry enterprise financed by the cooperative societies had a net return of N782,699.25 while the cassava based enterprise returned only N37,676.62. This means that cooperatives are engine of rural development but need to be adequately financed. Keywords: Cooperative Societies, Financing, Agricultural Enterprises Global Approaches to Extension Practice Vol. 3 (1) 2007: pp. 49-55