Over time, the issue of procurement of loan either for business setup or for other financial purposes continue to advance in a rate that is unimaginable.
Loan and cooperative society starts as a household idea which later expanded even to a cooperative society that is generally recognized and sometimes financed by the government. What cooperative society means, how it starts and detailed history will be discussed in the next paragraph.
History Of Cooperative Society In Nigeria
THE BEGINNING: PRE-NIGERIA
A Cooperative is an autonomous and voluntary association of people that come together to pool their resources together for business, economic, social and cultural welfare improvement. The concept of cooperative is indigenous to Nigeria even before the coming of the white men, as in ethnolinguistic group such as Yoruba, it dates far back to the 16th century: in the name of “esusu”, a rotating savings and credit association.
It initially started as a rotating work association, in which labour as a scarce commodity was accumulated and allocated to one member at a time; and then, with the spreading of commercial transactions, replaced by money, numerous adaptations and innovations have sprung from the Esusu: one is the transformation into non-rotating savings associations with a permanent loan fund and another one is the daily deposit collection at doorsteps or market stalls.
INITIAL NAME IN DIFFERENT REGION IN NIGERIA
This innovation is called the Ajo among the Yoruba ethnic group of Nigeria. Virtually every ethnolinguistic group in Nigeria has its own traditional cooperative institutions under names (Adashi, in Hausa, Isusu, in Ibo, Osusu by the Ogoja, Dashi by the Nupe and so on) these traditional cooperatives had even been exported as far as the Caribbean, West Africa, and Central African countries and it covers all human societies from marketing, credit, consumer, building, group farming, craftworkers societies. The first known of such cooperative is the Agege Planter’s Union made of over 400 cocoa farmers in 1907, but the colonial government did not support their activities nevertheless they persisted.
Modern Cooperative is a business organization that is based on the Rochdale principles as set out by the Rochdale’ society of equitable pioneers in 1844 and later adopted by the international cooperative alliance in 1937: (of democratic control, open and voluntary membership, low-interest rate and patronage refund), member education and cooperation among cooperatives.
This modern cooperative was introduced to Nigeria in 1926 when the Ministry of Agriculture in the colonial government of Sir Graeme Thomson recognised and re-organised the cocoa producers’ cooperatives of Agege Planters union and Egba farmers union in the cities of Abeokuta and Ibadan into marketing cooperatives to drive the sales of their produce, the success of this cooperatives was soon replicated across the Western region.
The success story of the marketing cooperatives in the Western province of Nigeria prompted the Government to invite Mr C.F. Strickland, a former British cooperative registrar in India to study the culture, geography and economic condition of the whole country and propose the best cooperative system suited for the Country, while understudying the Western Nigeria cocoa farmers marketing cooperatives success story. Mr. Strickland understudied them between December 1933-March 1934, and after 3 months of on-the-spot assessment, he recommended the introduction of cooperatives in his report submitted April 1934.
The recommendation was promptly followed by the colonial government as Mr. E.F.G. Haig was appointed the registrar of the newly formed cooperative societies in Nigeria and sent to India to study the ordinance and model of Indian cooperative Societies, which was established based on Strickland thesis and proven outcomes in 1935, this was fashioned after cooperatives of the British-Indian which now serves as the blueprint for the British colonies in Africa countries.
On the basis of the 1934 Strickland report cited above, the colonial administration started to introduce cooperatives in Nigeria from 1935. Based on further recommendations of Mr. Strickland in 1936 with another report which Mr. Strickland submitted in 1936 to promote savings among the low-income government workers, the(C.T.C.S) Co-operative Thrift and Credit Societies was formed and it spread rapidly all over Eastern and Western Region of Nigeria as this form of social organization fitted more neatly into the prevailing indigenous value systems, behavioural norms and patterns of decision making, and provided an alternative approach to managing household finances. In 1937, Gbedun Co-operative Produce Marketing Society became the first Co-operative Society to be registered by the Registrar E.F.G. Haig. Several Co-operative Societies and Union like the Produce marketing cooperative societies in the western region, credit and consumers cooperatives in the east and the credit and market cooperatives in the Northern province later sprang up and were duly registered by the government.
In late 1940, secondary cooperative societies such as Cooperative Produce and Marketing Union (CPMU) Cooperative thrift and credit union (CTCU)started to emerge, which were established by the primary cooperatives to give advice, loans, grants to them and keep their books and records.
THE NATIONALISTIC INFLUENCE
The Regionalization of Nigeria further enhanced the growth of the Cooperatives especially in Western Nigeria as in 1953, The Co-operative Bank Plc was established by the Co-op Movement to provide for financial needs of members of Co-operative Societies in Nigeria. A sum of One Million Pounds (part of the proceeds realized on cocoa Export) was approved for the take-off of the bank by the late Chief Obafemi Awolowo, then Premier of the Western Region. Since that year, the bank has been playing crucial roles in the economic growth of individuals and the nation as a whole.
The Co-operative Federation of Nigeria (CFN) was formed in 1945 and formally registered in 1967 as the national apex organization which represents the entire co-operative movement in Nigeria. All Co-operative Societies in Nigeria later became Cooperative Societies Association (CSA) which was formerly known as “The Nigeria Co-operative Societies Association (NCSA)”. CSA, which comprises It, is upon these solid foundations and achievement that Co-operative Societies in the country are building on until today.
The Oil boom era of Nigeria will later give the cooperative sector entry into unfamiliar terrain as the successive military government adopted cooperative mechanism as an instrument of rural and economic development, and later as a compensatory mechanism to share the national wealth deriving from oil exports. consecutive governments approach was not to facilitate thrift, self-help, organic growth, prudent lending, prudent expansion, self-control, careful selection of members, rather to source external grants and subsidies to fashion the cooperatives to look more attractive.
The distribution of stockfish, tinned milk and cheap loans through cooperatives in the 1970s up to the mid-1980s permitted rapid quantitative and geographic expansion over and beyond the areas where cooperatives had previously existed. Though this was to later be a blessing in disguise the inability of the cooperatives to access loans from commercial bank led to the establishment of secondary unions, Cooperative Financing Agencies (CFAs), in the 1970s. In many regions, they replaced the former secondary cooperative unions, which had become obsolete as they had lost their importance. The main source of capital of the CFA came from government sources, including State budgets and the Nigerian Agricultural and Cooperative Bank (NACB).
Just the way members of the societies primarily believe the government loans as their quota of the national cake, they had little motif to return their loans to their various primary society, which invariably affected the strength of primary societies to refund back their loans to their state, CFA thus the entire three-tier conduit system, from NACB to primary societies and to state CFAs, collapse systematically apart because none of these institutions was able to repay and recover loans as a result of consumption their share capital and ultimately became insolvent.
The old NACB after undergoing so many changes metamorphosed into the Bank of Agriculture Limited in 2010 after undergoing series of such changes to reposition it for better services of credit and developmental functions to the numerous cooperatives in Nigeria. What started with a humble beginning in Western Nigeria among the cash crop produce farmers of 400 without the support of the Colonial government later rose to become the Agricultural and rural development system adopted by the present government with spread across the 774 local government areas of Nigeria.
We have been able to dig deep on the history of cooperative society before and after the colonial era, also how it changes from house to house cooperation, the supply of human labor to more financial terms and in ways that have helped the different individual in achieving their purpose. Also, much has been done to point out the limiting factors at every point in time.