Understanding Book: HOW WILL YOU EXPLAIN THE DEFINITION OF COOPERATIVE SOCIETY

          DEFINING THE TERMS USED IN THE COOPERATIVE MOVEMENT

4.1a.                In time past, most people understood co-operative society to be money making venture. But in recent time, the picture is being made clearer to co-operators that setting up cooperative is not all about joining up to benefit for money from the government. Rather, co-operators need to work for any benefit he/she gets.

At this junction, it is proper for us to simplify the words and terms used in defining co-operative society by the International Cooperative Alliance (ICA).

Co-operative society is an association of persons usually of Limited means. Who have voluntarily joined together to achieve common economic end. Through the formation of a democratically controlled business organization. By making equitable contribution to the capital required to establish the agreed investment, and for the members accepting a fair share of the risk and benefit of such undertakings.

To actually understand what the co-operative society stands for in order to know areas you can apply certain words and phrase used when reading books designed for cooperative societies, we need to put the outlined words and sentences into proper consideration.

4.1b.    What Do We Mean When We Say:-

1.       LIMITED MEANS.

2.       VOLUNTARILY JOINED TOGETHER.

3.       ACHIEVE COMMON ECONOMIC END.

4.       DEMOCRATICALLY CONTROLLED

5.       MAKING EQUITABLE CONTRIBUTION

6.       ACCEPTING A FAIR SHARE OF THE RISK AND BENEFITS

LIMITED MEANS:-

4.1c.                By this we mean that these persons who associate with one another, despite usually of little means. And also regarded as poor people, does not mean they are people living in abject (which could mean Showing humiliation, hopelessness or submissiveness, or moreover, persons Most unfortunate, miserable or very poverty), which otherwise could be refer to as group made up of people so poor that they will not be able to make some capital contribution to the society. For example, a co-operative society is not an association of beggars.

Therefore, intending members must understand that some contributions are made when he/she becomes a member of the co-operative group; such person must be ready and able to make capital contributions like entrance fees, share capital, members Dues etc. to the society/union.

On this ground Limited means, used here explain the fact that these people who have just formed this group (Co-operative Society) or is affiliating to a secondary society, don’t have enough money. That they are still looking for more money which they believe they will get if they become members of a Co-operative society. And to achieve this aim, must make his/her equitable contribution.

 

VOLUNTARILY JOINED TOGETHER:-

4.1d.                Because Co-operative societies are voluntary organizations, means that people should not be forced directly or indirectly to become a member. Research shows that in some part of the country, people are indirectly forced to join a co-operative group by asking them to form a co-operative society so that they can benefit from incentives from the government. i.e fertilizer or loan.

If this trend of systematic forcing of people to set up co-operatives persists, it then means that people are not allowed to become members of co-operative society willingly or on their own volition (voluntary) rather, because some persons feel they can make use of co-operative society to achieve their selfish gains or maybe they desire to use it to get free gift from the government. We could say here that this action breach the principle of “Voluntarily Joined Together”. One question we must not fail to ask ourselves here is, what happens to the co-operative society if government or other father Christmas-like donors are not ready to support them, Will they be able to operate effectively on their own?

ACHIEVE COMMON ECONOMIC END:-

4.1e.    All co-operators must understand that the main purpose of setting up or forming co-operative society is to collectively achieve profitable goals. Such goals could include; making extra profit, increasing the number of members in order to be able to generate enough money, so that the co-operative will be able to buy more goods, or perhaps for them to make more profit for themselves, and also to create guarantee for one another.

DEMOCRATICALLY CONTROLLED:-

4.1f.     Any business that is formed by more than one person is expected to be controlled, democratically. And in the case of co-operative society, democratically control is used because when an election is to be conducted, it is “one man, one vote” except in the case of the president who shall have a casting vote in addition to his ordinary vote.

The one man, one man vote principle conjectured by the co-operative movement, is strictly adhered to as the position and financial capability of the member does not affect this aspect of the law (Democratic Means, Equal Right). This means that, whether the member is a Chief, Reverend, Oba or pastor. Every member only has the right to vote once. And the habit of trying to vote for someone who is not present must never be allowed. This is called, voting by proxy. By this one man, one vote policy, it means majority carries the vote. Therefore what ever is decided by this means is binding on all members where a quorum is formed to reach such decision(s).  

BUSINESS ORGANIZATION:-

4.1g.    By this, we mean that co-operative Society is formed as a business venture. They also have as one of its responsibilities to offer charitable services to the community or society they belong; this does not mean that they can render such humanitarian services like the Red Cross does etc.

Let’s take for instance a co-operative Society that wants to render humanitarian service to his member by given “Blanket Loan” to majority of them without observing laid down rules. Such group will easily collapse. Therefore, business techniques must be employed to successfully run a co-operative society in order to continue to be in business^*.

MAKING EQUITABLE CONTRIBUTION:-

4.1h.    The fact that cooperative is a viable tool in reaching those in the grassroot is undisputed because from the explanation of the following terms used in defining the co-operative society is a business set up by those with a limited means. Therefore, any contribution made by individuals in the group must be in relation to his/her financial convenience.

In order not to make any of the members’ inferior, the minimum and maximum capital contribution should be pegged in such a way that all cooperators will be able to pay their shares. To understand this concept, compare the fact that although the capital shares of each affiliate co-operative societies, although different  from one group to another, the beauty should be that all members can conveniently key in.

ACCEPTING A FAIR SHARE OF THE RISK AND BENEFITS

4.1i.     This means that all members must contribute both their presence and their cash to the running of society. The running of a Co-operative society is not like running other public limited liabilities, ie private companies or joint stock companies; where the shareholders don’t normally participate directly in the operation of the business. In co-operative, the management is directly done by the members. This means the shareholders directly participate in the running of its affairs. Because of this truth, there is no time the investor is given second hand information about the business as him/her is also involved in the operation of the business. If on the other hand there is loss observed in the process, every member must also share the risk.