Project Materials

AN EXAMINATION OF THE ROLE COOPERATIVE THRIFT AND CREDIT SOCIETIES TO THE DEVELOPMENT OF URBAN AREA

Chapter one

INTRODUCTION

The thrift and credit cooperative was created with the goal of raising the standard of living. The thrift and credit society was founded in Germany in 1818 by Fredrick Ra ffeisen, who is considered the father of contemporary cooperative thrift and credit societies.

Germany has always been regarded as the birthplace of credit cooperatives. At the time, Germany’s economic situation was dismal, and the peasantry and artisans were crushed beneath the weight of debt. Famine was the norm.

The Jews ruled the market, and the poor labourers and farmers had no choice but to buy their necessities from them and sell their products to them.

The merchants were money lenders who charged exorbitant interest rates for the credit they extended and offered absurdly low prices for the commodities they purchased.

With the peasantry’s bleak life, Raiffeisen emerged to help them get out of debt and poverty, and as a result, they devised a strategy for cooperative organisations.

Prior to the advertisement of modern cooperative societies, thrift and credit societies served in metropolitan areas, and the traditional mutual system was known and addressed by different names by various communities who practiced traditional forms of saving.

The Hausa refer to it as “oeAdashe,” “Bashi” in Nupe, “Asusu” in Ogogo, and “etoto” in Ibibio. Traditional cooperative systems elect leaders based only on member agreement, whereas modern cooperatives.

In general, management committees are elected democratically, and every person running for any position must meet certain requirements, such as paying admission fees, making a share deposit, and being voted on by members.

Cooperative thrift and credit societies are primarily present in metropolitan areas, among low-income earners, government employees, and others, with the urban region accounting for a significant portion of the total.

Background of the study

Thrift and credit cooperative societies, like other aspects of life, have their own set of issues. It is widely held that any organisation, regardless of size, has flaws that, if not detected and addressed, will inevitably lead to failure. Cooperative thrift and credit is not left out this philosophy identifying and laying these problems is the primary aim of the write up of this project.

The project aims to highlight the obstacles to the organization’s growth, as well as to emphasise the organization’s goals and objectives; is it meeting expectations?

Problems are being noted and analysed, as well as potential solutions.

Historical Background of the Area

Cooperative thrift and credit have existed since the early 20s, specifically in the orphanage mother multi-purpose society. Before then, it was traditionally practiced, low-income earners, petty traders, peasant farmers, etc.

contribute money weekly or monthly, they rotate one after the other, which serves as an urban development area for its members, and then people have difficulties to secure loan for its members from any financial institution due to the fact that most are low-income earners, urban areas, etc., where they have no collateral for security while they normally requested before giving.

However, with the establishment of an orphanage mother multipurpose in that area, which was established to assist people of limited means who find it difficult to save and secure loans to improve their socioeconomic status, encourage saving, and also provide other services to the communities at a reasonable rate of interest through the application of self-help and mutual help, which is one of the guiding ideas of cooperatives.

However, most people stated that they were withdrawing their membership because they assumed that they only wanted to dupe and run away with the little money they had learnt because, at the time of establishment

there was no emphasis on the expansion and diversification of cooperatives thrift and credit in their development plan, and there was no one to educate and enlighten the people about their goal and objective.

So people were complaining that they couldn’t meet their needs due to a lack of loan provision for the entire organisation, a lack of proper bookkeeping and auditing due to unskilled personnel, a lack of adequate capital, and, finally, dishonesty and competition among committee members and the government, which led to the thrift and credit society’s collapse.