Challenges and Solutions of Cooperative Societies in Nigeria

Nuelson Penuel Sunday, October 15, 2023 Basis



Cooperative societies play a vital role in promoting economic and social development in Nigeria. They have the potential to alleviate poverty, empower communities, and foster inclusive growth. However, several challenges hinder the growth and effectiveness of cooperative societies in the country. This article aims to highlight these problems and propose solutions to ensure the sustainability and success of cooperative societies in Nigeria.

1: Lack of Education and Awareness

One of the primary challenges facing cooperative societies in Nigeria is the lack of education and awareness about their benefits and operation. Many Nigerians, especially in rural areas, are unaware of the concept, principles, and potential advantages of cooperative societies. This lack of knowledge leads to limited participation and restricts the growth of cooperative societies. Solution: To address this issue, the government, non-governmental organizations (NGOs), and cooperative societies themselves must launch awareness campaigns and educational programs. These initiatives should aim to educate communities about the benefits of cooperatives, their principles, and the process of establishing and running them. Stakeholders can organize seminars, workshops, and training sessions to disseminate information and provide practical guidance. Additionally, integrating cooperative education into school curriculums and establishing cooperative-themed clubs can help foster a culture of cooperation from a young age.

2: Weak Governance and Management

The weak governance and management structures in many cooperative societies present a significant challenge. Inadequate training, lack of accountability, and corruption within cooperative boards hinder effective decision-making and often lead to mismanagement of funds and resources. This erodes trust among society members and reduces the long-term sustainability of the cooperative. Solution: Strengthening governance and management structures through capacity building programs is crucial. Training programs should be provided to cooperative leaders and members to enhance their knowledge of cooperative principles, financial management, strategic planning, and democratic decision-making processes. Regular audits and financial transparency measures should be implemented to ensure accountability within the cooperative societies.

3: Limited Access to Credit and Resources

Access to credit and resources is a significant constraint for cooperative societies in Nigeria. Many societies struggle to secure loans from financial institutions due to lack of collateral, high interest rates, and the absence of a credit history. Additionally, inadequate access to resources such as land, technology, and markets further hampers the growth and productivity of cooperative societies. Solution: Cooperative societies should establish cooperative banks or credit unions that provide accessible and affordable credit facilities to members. Partnering with financial institutions and collaborating with microfinance institutions can help expand access to credit for cooperative societies. Furthermore, the government should provide financial assistance, grants, and subsidies to cooperative societies, particularly in their initial stages. Enhancing access to resources can be achieved through partnerships with private businesses, government agencies, and NGOs to provide necessary inputs, training, and access to markets.

4: Weak Legal Framework and Regulatory Environment

Another challenge for cooperative societies in Nigeria is the weak legal framework and regulatory environment. The absence of clear and enforceable laws, bureaucratic obstacles, and the lack of government support undermine the viability and growth of cooperative societies. Solution: The government should prioritize the development and implementation of comprehensive cooperative legislation that fosters transparency, accountability, and compliance. The legal framework should address issues such as registration, governance, dispute resolution, and financial regulations. Establishing a dedicated government agency to oversee the development and regulation of cooperative societies can ensure effective implementation and enforcement of these laws.


Overcoming the challenges facing cooperative societies in Nigeria requires concerted efforts from all stakeholders, including the government, NGOs, cooperative societies themselves, and the wider community. By addressing issues related to education, governance, access to credit and resources, and legal frameworks, cooperative societies can thrive and play a significant role in Nigeria's economic and social development. With the implementation of appropriate solutions, cooperative societies have the potential to transform communities and contribute to a more inclusive and prosperous Nigeria.

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