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Impact Of Cooperative Societies Savings Scheme In Rural Finance: Some Evidence From Nigeria

Author

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  • Onafowokan O. Oluyombo

    (Department of Financial Studies, Redeemer’s University)

Abstract

This paper examines the extent to which savings products offered by cooperative societies in some parts of Nigeria meet the financial needs of the rural dwellers. The study used the data from interviews and focus group discussions from randomly selected members of cooperative societies in six local governments. The data are analyzed using percentages, content analysis and quotation. The study found that the savings product helps to inculcate a good savings habit among the participants because they find it easier to save now than when they were introduced to the program. The members also developed self esteem as -part owners- of the program because of the compulsory savings that they participate in, and they do not want the program to collapse. Members are also satisfied because they are able to save in the scheme which helps them to reduce their expenses on frivolous spending such as leisure drinking and acquisition of more wives. The members’ inability to withdraw from their savings when in financial need, except on cessation of membership, was found as the drawback of the program.

Suggested Citation

  • Onafowokan O. Oluyombo, 2013. "Impact Of Cooperative Societies Savings Scheme In Rural Finance: Some Evidence From Nigeria," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 11(1), pages 77-88.
    • Handle: RePEc:tuz:journl:v:11:y:2013:i:1:p:77-88
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    References listed on IDEAS

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    1. Gugerty, Mary Kay, 2007. "You Can't Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 55(2), pages 251-282, January.
    2. Huppi, Monika & Feder, Gershon, 1990. "The Role of Groups and Credit Cooperatives in Rural Lending," The World Bank Research Observer, World Bank, vol. 5(2), pages 187-204, July.
    3. Tsai, Kellee S., 2004. "Imperfect Substitutes: The Local Political Economy of Informal Finance and Microfinance in Rural China and India," World Development, Elsevier, vol. 32(9), pages 1487-1507, September.
    4. Mary Kay Gugerty, 2007. "You Can't Save Alone: Commitment in Rotating Savings and Credit Associations in Kenya," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 251-282.
    5. Buckley, Graeme, 1997. "Microfinance in Africa: Is it either the problem or the solution?," World Development, Elsevier, vol. 25(7), pages 1081-1093, July.
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    Cited by:

    1. Zikalala, Mcebo Justice, 2016. "The role of savings and credit cooperatives in promoting access to credit in Swaziland," Research Theses 265678, Collaborative Masters Program in Agricultural and Applied Economics.

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    More about this item

    Keywords

    cooperative societies; rural finance; savings; social capital;
    All these keywords.

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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