Economist always say that human beings behavior are rational that is, they are classified and directed at some specific point, devoid of unnecessary emotions and sentiments. In the same line of thought when a group of persons decided to join or form a co-operative society, they do so with some rationale behind their intention and or action (Sanusi, 2003).
Economics reasons constitute the major motive why people join or form co-operative. It is an attempt to improve one’s income by carrying out more economic activities or improving on the performance of the present enterprise of the individual. By so doing, the member’s economic position is ...view middle of the document...
The relevant social aspects of people from Africa are those aspects that deal with their attitudes of life and themselves, their mode of behavior with others as well as their norms and customs (Ijere, 1992).
Farm settlement and cooperative business used to be the main stay of the Nigerian economy, but as oil assumed greater significance, the sector become neglected. This situation may be attributed to poor business technology, low investment in the sector, drought and business financial losses. One of the major factors accounting for this poor cooperative business development is the inaccessibility of credit to the cooperative enterprises that dominate the nation’s agribusiness (Olayide, 1999).
Although credit itself does not enhance agribusiness cooperatives performance except properly invested and managed that it yields the expected result (Umebali and Mgbada, 2002), it is considered to be an essential input for increased productivity, boost income levels, and encourage employment and thereby alleviating poverty. Credit enhances this by enabling poor people to overcome their liquidity constraints while undertaking investment (Nathan, 2009).
Microcredit can play an important role in increasing access to basic social services and enhance the well being of the very poor people and when this occurs, productivity is enhance (Mbat, 2000). Lack of access to credit is generally seen as the main reason people in developing economies like Nigeria (Niels and Roberts, 2007). Usually, the poor have no access to loans from the banking system, because they cannot put up acceptable collaterals. These problems of credit can be solved through the information of cooperatives.
Agribusiness cooperatives and microcredit are interdependent and mutually re-enforcing and hence date back to the beginning of mankind. Before the advent of formalized institutional source of financing, agricultural credit took the form of borrowing from friends, relatives, neighbors and so on, with its attendant term either in the form of selling products to the lender at a future date and price or repayment at some agreed value (Fafchamps, 1999).
Prisma (2006) identified microcredit as a powerful development tool with which to eradicate poverty by providing financial services to the poor. The microcredit industry has been growing more than 25% a year during the last decade. Nonetheless, only a fraction of the demand has been met to date.
Specifically, successive governments in Nigeria have in the last three decades shown much interest in ensuring adequate financing for agriculture by establishing various schemes and specialized financing institutions to provide appropriate finance to the sector (Sanusi, 2003).
Easy access to credit for agribusiness cooperation development by members would result to increase in production and income of the household. A well established and smoothly functioning agribusiness cooperative in Nigeria will play vital role of savings-investments...