EFInA hosted an Innovation Forum to highlight opportunities for using co-operatives as a channel for enhancing financial inclusion in Nigeria.
Traditional co-operatives are common throughout Nigeria, but these groups tend to be small, with a common bond based on membership of a kinship, societal and/or professional group. According to the Federal Department of Co-operatives, as at 2010, there were over 80,000 co-operative groups with over 1.4 million members in 605 local government areas in Nigeria. The EFInA Access to Financial Services in Nigeria 2010 survey also revealed that almost 26.0% (21.9 million) of Nigerian adults used informal groups including co-operatives; and for 17.4% (14.8 million) of the adult population, informal groups are their only means of access to financial services.
However, there has been limited systematic data on the co-operative sector in Nigeria, which hinders effective engagement with the sector.Â It is therefore difficult to determine the optimal strategy for expanding and deepening financial services to and through co-operatives. To improve stakeholder understanding of the co-operatives sector and their potential for enhancing financial inclusion in Nigeria, EFInA undertook an in-depth study (qualitative and quantitative) of the sector in three states - Enugu, Kebbi and Oyo.Â Findings from the survey were disseminated and discussed by panellists and participants from co-operative groups, industry regulators, development finance institutions, microfinance banks and deposit money banks that attended the event.
Speaking at the innovation forum, Ms. Modupe Ladipo, Chief Executive Officer, EFInA, stated, â€śThere is a core and dedicated following of co-operatives in the Enugu, Kebbi and Oyo states, which is probably also replicated across Nigeria. Members regularly save and have a real demand for loans. Our data revealed that the 700 members interviewed in these three states saved over N243 million annually; and that the 150 managers interviewed, managed a loan portfolio of N122 million. Therefore, there is a significant potential for co-operatives to make a bigger impact amongst those who are un-banked or under-served. If optimised, co-operatives can be a force in empowering rural communities, farmers, women and micro entrepreneurs throughout Nigeria.â€ť
The keynote speakers at the event were the Honorable Joseph Nyagah - Minister of Co-operative Development and Marketing, Kenya, and Mr. Christian Malamsha, Dean, Faculty of Co-operative and Community Development, Moshi University College of Co-operatives and Business Studies (MUCCoBS), Tanzania.Â
In his keynote address titled, â€śCo-operatives as Potential Channel for Enhancing Financial Inclusionâ€ť, Honorable Nyagah shared insights on how effective regulations can support the growth and development of co-operatives and maximise their impact on financial inclusion. Kenyaâ€™s Savings and Credit Cooperative (SACCO) is the most dynamic and largest in Africa. At the end of 2011, there were 14,126 registered co-operatives â€“ serving over 10 million members in Kenya. He emphasised that, â€śThe role of Government is to create a conducive environment for growth and development of co-operatives through effective policies, overseeing development and administration of co-operative legislation and regulations. Co-operatives remain important in providing access to finance, and in particular credit to low income individuals given the rising cost of lending by banks.â€ť
Mr. Malamsha addressed how co-operative colleges can strengthen the competence of co-operatives and their managers, which would assist in accelerating the uptake of formal financial products in the co-operative sector. He asserted that, â€śCo-operative colleges should identify, develop and review programmes continuously, to ensure that the training needs of co-operatives are met.â€ť