223 The Role of SACCOs in Poverty Alleviation 7 July 2001 has just marked at

223 the role of saccos in poverty alleviation 7 july

This preview shows page 20 - 22 out of 25 pages.

2.2.3. The Role of SACCOs in Poverty Alleviation7 July 2001, has just marked at the 7th UN International Day of Cooperative and 79th ICA internationalday. It is estimated that there are now over 760 million individuals who have chosen the cooperativeadvantages. Values, principles, ethics, and business competence constitute the cooperative advantagesboth for member and forth e community in which they operate. Since cooperatives are member ownedand member controlled under democratic principles, they certainly put people first. In many countries,cooperatives are in for front in the production and marketing of food staffs, electricity, and consumergoods as well as financial insurance and social services. Both directly and indirectly cooperatives helpboth member and employees to escape from poverty or to protect those of them who may be facing therisk of poverty (Imoisili, 2001).According to Burt (1997), the benefit that cooperatives provide can be direct or indirect. Direct benefitsmay include better assurance of supply and access to markets, both of which can directly increase abusiness net income. The indirect benefit may include a great influence on input and output markets,improved qualities, better services, increased business knowledge and participation in research anddevelopment. The cooperatives can increase members’ return in many ways such ways are, reducing costand pricing.
Background image
Moreover, as ICA (1997), state the role of cooperative is to provide greater benefit to the members suchas: increasing individual income or enhancing a member’s way of living by providing important neededservices. The cooperative may be a vehicle to obtain improved market or providing source of supply orother services, otherwise unavailable if members act alone.2.2.4. Theoretical Problems of Saving and Credit CooperativesThe cooperative movement in the country faced a number of problems in the different economic systemsof the country. Most of the cooperatives don’t have professional managers due to two reasons. Theviability of the cooperative is not always ensured due to low organization, technical supports and followsup by the concerned bodies. The ever changing structure of the cooperative bodies at federal, regional andWoreda level highly affected the smooth development of cooperative societies in the country. Lack oflong term credit hinders the investment of cooperatives in different projects that would have economicbenefit to members. The members’ economic and /or financial power to strengthen their cooperativesociety is very weak. So cooperatives are suffering in shortage of capital .The infrastructure problem(road, transportation, bank, etc) in the rural Ethiopia hinders the provision of inputs, consumer goods andmarketing of members produce by cooperative societies to member patrons. Lack of timely, accurate andreliable market information adds to the problem. To conclude, the government of Ethiopia had alreadypaved the way for better cooperative development in the country through creating legal basis andexpansion of human resource development at higher institution level .Therefore, it is high time to the
Background image
Image of page 22

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture