Background of the Study
This research work focuses on the effects of credit administration and control on the development of cooperative society. Credit administration and control functions as a good instrument that brings about rapid development in the cooperativeÂ sector. It can be regarded as the essence ofÂ Â financialÂ instruction in anÂ economy, therefore the formulationÂ and implementationÂ of sound andÂ solid credit policesÂ andÂ control are among theÂ most crucial responsibilities of the management of an organization.
Among the most essential functions of credit cooperative is to provide loans to members and ensure the repayment of the loans given to them,Â it is Â therefore important to develop policies that will ensure the security of loans extended to members.
Due toÂ lack of credit administration and control, credit facilities made available is spread among members of the cooperative societies and considered moreÂ of gift than loans to be paid within a specific period of time and therefore cooperatives find themselves cripple economically.
The implementation of credit administration and control is a necessary condition of the society so as toÂ achieve its objectives, to serve theÂ membersÂ in an efficient manner andÂ more importantly ensure safety of funds forÂ continuityÂ and developmentÂ of the society.
According to Iyowu (1985) an articulate credit management policyÂ not onlyÂ seeksÂ toÂ balance profit and liquidity. It expects toÂ Â determine whom credit must beÂ granted to how much to beÂ granted, for how long and to ensure successful recovery. The achievement of an efficient credit administration and controlÂ entailsÂ anÂ elements of a subjective management.
This research work will look at the role of credit administration and control, the disbursement of loans and its recovery creditÂ administration and control and how it can be utilized for the development of the cooperative societies.
1.2Â Â Statement of The Problem
The primary aim in a cooperative society is to improve the economic and social positionÂ of theÂ membersÂ by extending credit facilitiesÂ to them. It can either be short term or long term loans. It is important that credit usage be productive which will enable the borrower to earn enough to repay the principal and the interest and also realize a surplus from the undertaking.
Cooperative societies are not making significant impact in theÂ growth and development despite some level of credit administration and control, problems are faced whenÂ there areÂ noÂ checks and balances and therefore posses danger to itâ€™s continued existence and as such will not have achieved the objectives for which it was initially established.
Due to this shortcoming andÂ more,Â like lackÂ of experts to handle the finance of the society, mismanagement of funds by officials, poorÂ record keeping which makesÂ most members not to getÂ Â theirÂ contributions as at whenÂ due,Â which has led to loss of confidence, withdrawal of the membersÂ Â and consequently loss of contribution to theÂ Â societies.
Furthermore, in most cases, the membersÂ savings are embezzled or misappropriated. As a result societies do not live long due to dishonesty inÂ handling funds.
Providing members with easy access to credit facilitiesÂ being among the aims and objectives of most cooperative societies cannot be realized if such credit given to the members are not efficiently and effectively administered to ensure productive utilization and ability of the members to repay loans extended to them. This can guarantee continued existence of theÂ cooperative society.
It is against this background that this study will venture into finding out the effects of credit administration and control in the study areas.
1.3Â Â Objectives of the Study
The following are theÂ objectives ofÂ thisÂ studyÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
- To find out the role of creditÂ administration and control inÂ improving cooperative societies
- To determine the extent to which cooperative societies recover loan disbursement to members.
- To find out problems associated with credit administration and control.
- To identify problems and proffer possible solutions.
1.4Â Â Significance of the Study
This study is designed to helpÂ Â cooperative societies have a betterÂ understanding of the role credit administration and control plays in the development of cooperative societies.
The research will also contribute in enhancing appropriate measuresÂ from cooperative societies which can improve the loan policies and securities andÂ in extension encourage credit cooperation.
To government, it may also contribute in enhancing appropriateÂ measure from the government toÂ improve andÂ Â encourageÂ prospects of cooperative societies in the rural and urbanÂ areas as it will instil hope in the minds of the members and potential members.
Scholars, researchers andÂ incoming student will also benefitsÂ from this research work as itÂ will serve as reference to them.
1.5Â Â Research Questions
The following research questions will guide this study.
- whatÂ role does credit administration and control play in improving cooperative societies?
- To whatÂ extent do cooperative societies recover loans disbursement toÂ members?
- What are the problem of cooperative societies in connection with credit administration andÂ control?Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
- WhatÂ are the possibleÂ solutions to ensure the successÂ of credit administration and control in theÂ development of cooperative societies?
1.6Â Â Scope of theÂ Study Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
The scope of the research is aimed at examining the effects of credit administration and control on the development of cooperative societies with reference to Arewa multipurpose cooperative society and National Board for Technical Education investment and credit cooperative society Kaduna.
1.7Â Â Definition Of TermsÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
All the termsÂ belowÂ willÂ reflect theÂ operational meaning as usedÂ in this project study.
- Cooperative society: According to ICA is defined as an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspiration through a jointly owned and democratically controlled enterprise.
- Cooperation: the association ofÂ two or more people who voluntarily comeÂ together in order to achieveÂ target objectives.
- Credit: loans ofÂ money or equipment extended to members to be used forÂ productiveÂ purposes and with the agreement of repaying same amount withÂ the accured interest at the future date.
- Control: the process of ensuring that actual activities conform to planning activities.
- Policy: A standing plan that establishes general guidelines for decision making.
- Credit administration: Activities that areÂ Â done in order to plan, organize, extend and recover loan extended to members of the cooperative societies.
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