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Meaning and Features of Cooperative Society

Types of Cooperative Society in Nigeria.

First of all, co-operative society is a form of business organization usually established to cater for members. It ensures communal living with collective interest. It is an association of people with common social and economic interests who engage in the creation and sale of things of value to members at cost.

Members of a co-operative society are called co-operators. They receive patronage rebate as reward for the risk taken. Goods and services are provided to members at cost. The excess of income over expenditure is usually called surplus. A management committee administers the society.

Types of Cooperative Society.

There exist six co-operative societies types. The following are the 6 kinds of cooperative society recognised in Nigeria and internationally:

  • Producers’ co-operative society
  • Consumers’ co-operative society
  • Multi – purpose co-operative society
  • Farmers’ co-operative society
  • Thrift Co-operative society or savings club
  • Traders’ co-operatives

 

Producers Cooperative Society.

In producers’ co-operative society members who are usually independent producers agree to produce a particular commodity in the interest of members. Elected members manage this society. This kind of co-operative society is involved in primary production of goods and is mainly involved in agricultural production.

Consumers Cooperative society.

The consumers’ co-operative society is formed by members with the aim of marketing finished goods meant for final consumption. It is involved mainly in the exchange of title to goods – buying and selling. It could be wholesale or retail co-operative society. Goods are usually bought and sold to members at cost. It helps them take advantage of bulk buying and the attendant cash discount. Credit purchases are also possible under this arrangement, than with individuals.

Multi Purpose Cooperative Society.

The multi-purpose co-operative society as the name implies deals on a variety of business. It combines the characteristics and trappings of producers’ and consumers’ co-operative societies to take advantage of backward and forward integration in production and sale of goods and services.

Farmers Cooperative Society.

Farmers’ co-operative society is a society of farmers which undertakes specifically farming activities in the overall interest of members.

Thrift Cooperative Society or Savings Club.

Thrift or savings clubs exist as communal arrangement to transact business through rotational lending of money. Bank loans when available are usually fraught with not-to-soft interest rates. The thrift society is like issue of shares and ensures interest free loans to members on weekly, monthly, etc basis.

Traders Cooperative Society.

Traders’ co operatives exist among independent traders who have fund needed to continue to improve the futures of individual members. When traders combine, they can obtain loans easily from banks and grants from government.

Features / Principles of Cooperative Enterprise.

According to International cooperatives Alliance (ICA), there are eight principles of co-operative enterprise. They include:

  1. Open and Voluntary Membership
  2. Democratic Control
  3. Limited Interest on Capital
  4. Patronage Rebate
  5. Cash Trading at Market Price
  6. Co-operative Education
  7. Religious and Political Neutrality
  8. Cooperation between National and International Cooperatives.

Read Also => Drawbacks and Benefits of Cooperative Society in Nigeria.