Abstract
Cooperative is a useful instrument to alleviate the socio-economic problems of the people in many developing countries including Ethiopia. Cooperation among people has existed since time immemorial. However, formal cooperatives began in Ethiopia in 1960. Following this, with the initiative of the government to encourage financial institutions, Cooperative Bank of Oromia was emerged in 2004. Since its establishment, Cooperative Bank of Oromia played its share to solve the bottleneck of institutions and individuals in delivering both financial and non-financial services to the unbanked and under banked communities as well as to sustain the co-operative institutions. The objective of this review article is to show the status and role of cooperatives and Cooperative Bank of Oromia in the socio-economic development in Ethiopia. Intensive conceptual and empirical literature reviews were made in the areas of cooperative development, cooperative policy and regulatory framework documents, annual reports of Cooperative Bank of Oromia and the Federal Cooperative Agency’s report. The study indicated that the number of primary cooperatives has increased from 7,366 in 1991 to 82,089 at the beginning of 2019 showing 1,014% rate of growth. The number of members increased from 4.5million to 18 million during the same period demonstrating growth rate of 297%. Their capital was increased from half billion to 20.5 billion birr during the stated periods. Likewise, Cooperative Bank of Oromia has shown dramatic progress. Its capital is increased from 300 million to more than 5 billion; the numbers of branches increased from 7 to 420, number of employees are 8,163. The review confirmed that the bank is contributing multi-directional socio-economic development in the country. It is obvious that if it continues in this manner, the bank will be one of the leading banking industries in the country. Keywords: Cooperatives, Cooperative Bank of Oromia, Role, Status, Socio-Economic Contribution DOI: 10.7176/EJBM/13-7-02 Publication date: April 30 th 2021
Highlights
In the contemporary period, poverty is abolishing the lives of billions of the people around the world
The concept of human cooperation is not new; it existed even before the formation of modern cooperation. To overcome their immediate problems and to share their feelings, human beings traditionally work together in day to day life. As it is stated by Gary (1993), cooperative is an association of persons who have voluntarily joined together to achieve a common goal
Objective of the Review The main objective of the review is to show the role of cooperatives and Cooperative Bank of Oromia (Coopbank) in the socio-economic development of the country
Summary
Poverty is abolishing the lives of billions of the people around the world. Cooperative Bank of Oromia S.C has emerged as one of the private commercial bank in the sector, which has been actively moving to boost its market share and contribute to the strong support to the cooperative sectors and to the economic development of the country at large.
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