Registration of Cooperatives with Government in Enugu State,Nigeria

Abstract

The cooperative has long been recognized by governments as a vehicle for poverty reduction. In Nigeria, however, the term ‘cooperative’ has traditionally been restricted to those organizations registered with government. This leads to an underestimation of the contribution of cooperatives to society because the activities of non-registered organizations with cooperative characteristics go unnoticed. This paper compares registered and non-registered cooperatives in Nsukka to ascertain whether registration really makes a difference. The analysis shows that membership of both registered and non-registered societies is dominated by men. However, the non-registered societies are, on average, younger (in terms of both membership and date of establishment) than the registered group. The non-registered societies are also much smaller than the registered ones. While the non-registered societies source their credit from the informal sector, their registered counterparts source theirs from government and the formal sector, essentially because government does not recognize non-registered societies as cooperatives. Although both the amount and spread of investment are significantly higher among the non-registered cooperatives than the registered ones, there is no significant difference between the two groups in terms of income earned. This is apparently due to government support of the registered cooperatives, which props up their income. In addition, the non-registered societies are more oriented towards community development in their investment. Thus, neglecting the activities of non-registered groups may not only be detrimental to development, but may also be disadvantageous to poverty alleviation programmes. This is particularly important for the international development/donor agencies and NGOs with a special focus on cooperatives or similar groups.