1.0 Introduction
1.1 Background of Study
The development of cooperative societies has been closely linked to government policies, dating back to the early 19th century. The cooperative movement began in Europe during the Industrial Revolution as a response to economic hardships and social inequalities faced by workers (Fairbairn, 2004). One of the earliest and most influential cooperative models was the Rochdale Society of Equitable Pioneers, established in 1844 in England (International Cooperative Alliance, 2020). Governments worldwide have since recognized the potential of cooperatives in promoting economic and social development. In the early 20th century, several countries, including Germany and Denmark, enacted cooperative laws to regulate and support their growth, particularly in the agricultural and financial sectors (Birchall, 2011).
In Africa and Asia, colonial administrations introduced cooperative policies primarily to enhance agricultural production and rural development. However, these policies were often exploitative, designed to benefit colonial economies rather than the cooperative members themselves (Wanyama, 2009). Following independence, many developing nations revised their cooperative policies to promote self-reliance and economic empowerment. Governments introduced laws to provide financial assistance, training, and regulatory frameworks to enhance cooperative development (Chambo, 2019). However, the extent of government intervention varied across regions. Some governments heavily controlled cooperatives through bureaucratic regulations, while others adopted a more liberal approach that encouraged autonomy and self-management (World Bank, 2021).
In recent decades, international organizations such as the United Nations (UN) and the International Labour Organization (ILO) have advocated for supportive policies that enhance cooperative governance and sustainability. The UN declared 2012 as the International Year of Cooperatives, highlighting their role in sustainable development and poverty reduction (United Nations, 2012). Many countries have since adopted policies that promote cooperative entrepreneurship, financial inclusion, and technological innovation in cooperative operations (FAO, 2020).
According to International Cooperative Alliance (2020), cooperative societies play a vital role in socio-economic development by fostering self-reliance, reducing poverty, and enhancing collective economic activities. These organizations are member-driven and operate based on democratic principles, allowing individuals to pool resources for mutual benefits (International Cooperative Alliance, 2020). Cooperatives have historically contributed to rural development, financial inclusion, and employment generation, particularly in developing economies where formal financial institutions may not be accessible to all (Birchall & Simmons, 2018).
A cooperative society is an autonomous association of individuals who voluntarily unite to meet their common economic, social, and cultural needs through a jointly owned and democratically controlled enterprise (International Cooperative Alliance, 2020). The cooperative model is essential for fostering economic development, particularly in developing countries, as it promotes collective investment, risk-sharing, and community empowerment (Birchall & Simmons, 2018).
Chambo (2019) stated that Government policies are fundamental in shaping the success and sustainability of cooperative societies. Policies regarding legal frameworks, financial support, taxation, and regulatory oversight directly impact the operational effectiveness of cooperatives. Favorable policies can enhance cooperative development by providing access to credit facilities, and infrastructural support (Chambo, 2019). Conversely, ineffective policies such as excessive bureaucratic control, inconsistent regulations, and lack of government incentives can hinder the growth of cooperatives, limiting their potential to contribute to economic progress (World Bank, 2021). Therefore, this study examines the effect of government policies on the development of cooperative societies.
1.2 Statement of Problems
Investigation revealed that the inconsistency in policy formulation and execution. While governments introduce policies to support cooperatives, frequent policy changes, lack of continuity, and poor enforcement weaken their impact (Chambo, 2019). Cooperative societies often struggle to navigate shifting regulatory environments, making it difficult for them to plan for long-term sustainability.
Additionally, access to financial support is another critical problem. Although many governments establish loan schemes and grants for cooperatives, bureaucratic bottlenecks, corruption, and stringent requirements make it difficult for cooperative members to access these funds (Wanyama, 2009). As a result, many cooperatives operate with limited capital, restricting their ability to expand, modernize, or compete effectively in the market.
Furthermore, many cooperative members and leaders do not fully understand the benefits of available government programs or how to comply with policy requirements (FAO, 2020). Without proper training and awareness, cooperatives struggle to maximize the opportunities provided by supportive policies. It is against the backdrop that this study seeks to examine the effects of government policies on the growth and sustainability of cooperative societies.
1.3 Aim and Objectives of Study
The aim of this study is to examine the effect of government policies on the development of cooperative societies.
The specific objectives of this study are to:
- Assess the level of awareness and education among cooperative members regarding government policies and available support programs.
- Identify challenges faced by cooperatives due to policy inconsistencies, overregulation, and inadequate infrastructure.
- Investigate the impact of regulatory frameworks on the autonomy and operational efficiency of cooperative societies.
- Examine the role of financial assistance and credit accessibility in strengthening cooperative development.
- Analyze the extent to which government policies support or hinder the growth of cooperative societies.
- Recommend policy improvements that enhance the effectiveness of cooperative societies in achieving economic and social development.
1.4 Research Questions
Based on the stated objectives, this study seeks to answer the following research questions:
- To what extent do government policies support or hinder the growth of cooperative societies?
- How does financial assistance and credit accessibility influence the development of cooperative societies?
- What is the impact of regulatory frameworks on the autonomy and operational efficiency of cooperative societies?
- How aware are cooperative members of government policies and available support programs?
- What challenges do cooperative societies face due to policy inconsistencies, overregulation, and inadequate infrastructure?
1.5 Research Hypothesis
This study tests the following hypotheses based on the stated objectives:
- H01: Government policies do not have a significant effect on the development of cooperative societies.
- H02: Financial assistance and credit accessibility negatively influence the development of cooperative societies.
1.6 Significance of Study
The outcome of this research will benefit cooperative societies by increasing awareness of government policies, financial support, and regulatory provisions. This will enable cooperative leaders and members to take advantage of available opportunities, advocate for necessary reforms, and improve their operational efficiency. The research study will also be beneficial to financial institutions and development agencies involved in cooperative funding.
For researchers and academicians, this study will serve as a reference material for future research on cooperative development and policy formulation. It will provide empirical evidence on the effects of government policies, contributing to the broader discourse on economic development through cooperative movements.
Lastly, the study will also be beneficial to the general public and the economy at large, as the development of strong cooperative societies will lead to increased employment opportunities, poverty reduction, and economic stability.
1.7 Scope of Study
This study will focus on the effect of government policies on the development of cooperative societies in Lagos State, Nigeria. The research will be limited to registered cooperative societies operating in Lagos State and will involve key stakeholders such as cooperative leaders, government officials, and financial institutions. Data will be gathered through surveys, interviews, and analysis of relevant government policies affecting cooperative development in the state.
1.8 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.9 Definition of Terms
Government Policies:
Government policies refer to the set of laws, regulations, and programs designed by the government to influence various sectors of the economy, including cooperative societies. These policies determine the level of support, financial aid, and regulatory framework that shape the growth and operations of cooperatives (Obasi, 2020).
Cooperative Societies:
Cooperative societies are voluntary organizations formed by individuals with common social and economic interests to promote mutual benefits. Members pool resources together to achieve shared goals such as financial security, business growth, and social development (ICA, 2018).
Development:
Development in the context of cooperative societies refers to the continuous improvement in the financial strength, operational efficiency, and sustainability of cooperatives, driven by government interventions and strategic policies (Adefila, 2019).
Regulatory Framework:
A regulatory framework consists of laws, guidelines, and enforcement mechanisms that govern the establishment, management, and functioning of cooperative societies. It ensures compliance, transparency, and accountability within the cooperative sector (Eze & Nwankwo, 2021).
Financial Assistance:
Financial assistance includes grants, loans, tax incentives, and subsidies provided by the government or financial institutions to cooperative societies to support their expansion, sustainability, and operational effectiveness (Okonkwo, 2022).
Policy Implementation:
Policy implementation is the process by whichgovernment policies are executed and enforced to achieve the intendedobjectives. The success of cooperative development largely depends on how wellthese policies are put into action (Adamu, 2020).…
