Understanding co-operatives in Nigeria – Apr 2012

The EFInA Access to Financial Services in Nigeria 2010 survey revealed that:

  • Almost 30.0% of Nigerian adults use informal societies
  • For 17.4% (14.8million) of the adult population, informal societies provide their only means of access to finance
  • 2 million adults accessed a loan from informal societies, which include co-operatives

Co-operatives are businesses owned and run by and for their members, to meet specific economic goals.  It is estimated that there are over 80,000 registered co-operatives in Nigeria.  However, there is little systematic data on the co-operative sector, which hampers financial institutions from effectively engaging with the sector and makes it difficult to determine the optimal strategy for delivering relevant products.

If managed properly, the co-operative sector could significantly contribute to expanding opportunities in rural communities, especially for farmers, women and micro-entrepreneurs throughout Nigeria.

By undertaking an in-depth study of the sector, EFInA intends to improve the financial sector’s understanding of the co-operative sector and its potential for enhancing financial inclusion in Nigeria.

The primary objective of the research is to provide comprehensive analysis on co-operatives in Oyo, Kebbi and Enugu (these 3 States offer a variety of co-operatives), in order to understand their operations, sources of funding, governance, internal capacity, members’ needs, growth prospects and challenges. The report will provide evidence-based information that will enable policymakers and financial service providers to develop a strategy to unlock the potential for the expanding financial services to co-operatives in Nigeria.

The qualitative report is a pre-cursor to the quantitative phase, which is due to be completed in September 2012.

It is therefore fitting that with the UN declaring 2012 as the "International Year of Co-operatives" that renewed focus is being paid to the sector.

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