(a) State four characteristics of a cooperative society.
(b) Mention and explain three types of cooperative society.
Explanation
(a) The characteristics of a co-operative society include:
(i) Membership is open to everybody in the particular environment.
(ii) It protects its members from the exploitation of open market forces.
(iii) The sharing of profits is based on members’ patronage.
(iv) The practice of democracy is observed in the running of the society, i.e. it adopts a man one vote process of decision making.
(v) Thrift saving is encouraged among its members.
(vi) Capital is paid back to those who wish to withdraw from the organisation
(vii) Management of its activities and accounts is done by committee.
(viii) It can raise extra capital through loans.
(b) Types of co-operative society are:
(i) Consumer cooperative society is formed by consumers who pool their resources together to enable them to buy goods directly from manufacturers at a cheaper rate.
(ii) Producer co-operative society is formed by producers of similar goods who come together to promote the production and sale of their products. Members of this society, like farmers other producers, contribute money to buy or hire equipment, machinery and raw materials to enable engage in large scale production.
(iii) Credit and thrift co-operative society are formed to encourage members to sat money which is later lent to them at a reduced rate of interest. This saves the members the problem of borrowing from banks at higher rates of interest.
(iv) Multi-purpose co-operative society combines different activities such as marketing consumer goods, production of goods and giving of credit and loan etc. The term multi-purpose gives the society scope to engage in any form of cooperative venture that members consider profitable and that is in the interest of the society and its members.
(v) Retail co-operative society is a type of co-operative society where retailers come together to buy goods in bulk, for onward sale by the members to consumers.
(vi) Wholesale co-operative society is a type of cooperative society where wholesalers pool their resources together to buy in bulk from manufacturers.