Impact of Cooperative and Thrift Societies on Small Business Performance in Nigeria

  • Michael Ogunmuyiwa Olabisi Onabanjo University
  • O. P. Oluwasanya Olabisi Onabanjo University
  • O. R. Aladegoroye Olabisi Onabanjo University
Keywords: Financial Service, Non-Financial Service, Patronage, Small Business Performance

Abstract

Objectives: This study investigated the impact of participatory rate of cooperative members on small business performance in Nigeria.

Prior Work: Previous studies focused more on the relationship between cooperative and thrift societies and small business performance without paying adequate attention to participatory rate of members. 

Approach: The study was conducted among cooperative and thrift members in Six (6) Local Government Areas in Ogun Central Senatorial District (Ifo, Ewekoro, Obafemi/Owode, Abeokuta North, Abeokuta South, and Odeda). The study adopted survey research design and a sample size of 369 was drawn from a population of 4,836 members of cooperative societies in the Six (6) Local Government Areas using judgmental sampling technique.  Descriptive statistics (DS) and Ordinary Least Square (OLS) were employed to test the hypotheses formulated using 5% level of significance.

Result: Result revealed that Financial Services (FIS) has significant effect on small business performance (β = 0.4131; tc = 5.7988; p < 0.05). Also, Non – Financial Services (NFIS) has significant effect on small business performance (β = 0.2708; tc = 3.2023; p < 0.05). In addition, Socio-economic Factor and Membership (SEF/MEM) has significant effect on performance of small businesses (β = 0.1817; tc = 2.6416; p < 0.05). Patronage (PAT), also has a significant effect on performance of small business (β = 0.7919; tc = 15.8113; p < 0.05).

Implications: Based on these findings, the study concluded that FIS, NFIS, SEF/MEM and PAT have significant effect on the performance of small businesses in Nigeria. Thus, these elements are the critical factors influencing the performance and growth of small businesses in Nigeria.

Value: Small businesses as well as SMEs in general can leverage on the dimensions of cooperative used in this study to improve performance of their enterprises.

Author Biographies

O. P. Oluwasanya, Olabisi Onabanjo University

Department of Cooperative and Rural Development, Faculty of Management Sciences

O. R. Aladegoroye, Olabisi Onabanjo University

Department of Cooperative and Rural Development, Faculty of Management Sciences

References

Ademilua, V. (2017). Influence of cooperative society membership on women owned SMEs in West Africa. Global Scientific Journal, 5(12), 9 – 27.
Ailemen, I. K., Ojeka, S., Agwu, E. M. & Achugamonu, B. N. (2015). A review of the causes and effects of disparities in global financial performances of cooperative societies.
Akerele, E. O. & Adekunmbi, S. A. (2018). Impacts of cooperative thrift and credit facilities on members’ business output in Ogun State, Nigeria. Sustainable Agriculture Researh, 7(3), 28 – 38.
Alema, K. L. (2014), Reputational risk impact of internal frauds on bank customers. International Journal of Development and Management Review (INJODEMAR), 175 – 192.
Anup, K. L. (2014). Achievements of cooperative movement in India: Some lessons for Nigeria Centre For Rural Development and Cooperatives.
Bamidele, A. & Spencer, J. H. (2007). The effect of cooperative thrift and credit societies on personal agency belief: A study of entrepreneurs in Osun State, Nigeria. African Journal of Agricultural Research, 2(12), 678 – 686.
Chiara, C. & Alexander, M. (2012). Why do cooperatives fail? Big versus small in Ghanian cocoa producers’ societies. Journal of Public Economics Research, 5(12), 13 – 19.
Dunggio, M. O. & Yasa, I. (2016). “Cooperative Business Enterprise, Maryland.
Effiom, R. A. (2014). Impact of cooperative societies in national development and the Nigerian economy. Global Journal of Social Sciences, 13(1), 19 – 29.
Kirimi, P., Simiyu, J. & Dennis, M. (2017). Effect of debt finance on financial performance of savings and credit cooperative societies in Maara Sub-county, Tharaka Nithi County, Kenya. International Journal of Accounting, Finance and Risk Management: 2(3), 113 – 130.
Kyazze, L. M., Nkote, I. N. & Wakaisuka-Isingoma, J. (2017). Cooperative governance and social performance of cooperative societies. Cogent Business & Management, 4(1), 1 – 14.
Mande, O. & Lawal, M. I. (2014). Empirical study of barriers to electronic commerce adoption by small and medium businesses in Nigeria. International Journal of Innovation in the Digital Economy (IJIDE), 6(2), 1 – 19.
Munyasia, F. (2016). What is cooperation? The philosophy of cooperation and its relationship to cooperative structure and operations. UCC occasional paper, No. 6, University of Wiscoin Center for Cooperatives.
Nwankwo, F., Ewuim, N. & Asoya, N. P. (2012). Role of cooperation and its relationship to cooperative structure and operations. UCC Occasional Paper, No. 6, University of Wisconsin Center for Cooperatives
Ohen, S. B., Ofem, U. I. & Arikpo, D. N. (2018). Efficiency of cooperative societies in credit delivery to agricultural enterprises in Yakurr Local Government Area, Cross River State, Nigeria. International Journal of Environmental & Agriculture Research, 4(3), 72 – 81.
Okoli, E. (2018). Assessment of the contribution of cooperative societies in the development of the youth: a case study of selected cooperative societies in Dunukola Local Government Area, Anambra State, Nigeria. Munich Personal RePEc Archive, 5(2), 45 – 57.
Oladejo, M. O. (2013). Stakeholders perception of cooperative societies as a micro-credit delivery channel in the Nigerian financial sector reform era. International Review of Management and Innovation Research. 2(3), 11 – 24.
Oluwasanya, O. P., Akerele, E. O., Ogunmuyiwa, M. S., Aladegoroye, O. R. & Olabisi, M. I. (2020). Loan default among cooperative women entrepreneur in Ifo Local Government Area of Ogun State. KIU Journal of Social Sciences, 6(2), 229 – 237, College of Humanities and Social Sciences, Kampala International University, Kampala, Uganda.
Published
2021-11-18
Section
Articles