Impact of Cooperative Membership on Rural Income Generation in Southwest, Nigeria

Sofoluwe Nurudeen Afolabi,Yinusa Olumuyiwa Ganiyu

doi:10.5209/reve.75563

Abstract

This study examines the impact of cooperative membership on rural income generation. It also analyzes the factors influencing participation in cooperatives among rural households in Southwest, Nigeria. The study was designed to account for selection bias into cooperative organizations. Rural household survey data were used and the estimates were based on both the Probit model and non-parametric propensity score matching method. The findings show that income generated through cooperative membership is approximately 10% higher than those generated by noncooperative members. Empirical estimates of determinants of cooperative membership indicate that years of education, age and land size have significant influences on the decision to join cooperatives.

Highlights

The income gap in rural communities is believed to have an adverse negative effect on the productivity and sustenance of the rural populace
Most respondents were above 40 years of age, suggesting that cooperative membership is more appealing to adults
Most participants in Focus Group Discussion (FGD) gave different reasons why cooperative organizations are not dominated by younger people in rural areas

Summary

Introduction

The income gap in rural communities is believed to have an adverse negative effect on the productivity and sustenance of the rural populace. Rural settings are generally characterized by a low level of production, poor infrastructure, lack of sufficient public goods, and undesirable livelihoods and living standards. Rural areas are marked by limited income generating activities with attendant effects on the general well-being of the poor. One of the suggested pathways to overcoming these challenges is the encouragement of institutional arrangement in form of cooperatives. These cooperative institutions are considered appropriate for advancing the socio-economic goals of their members (Getnet & Anullo, 2012). Existing studies suggest that cooperatives can help reduce market failures and improve access to financial resources without stringent interest rates or harsh conditions (Ma & Abdulai, 2016; Mojo, Fischer & Tegefa, 2017; Milovanovic & Smutka, 2018)

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Conclusion