THE IMPACT OF SOCIO- ECONOMIC BEHAVIOUR ON LOAN REPAYMENT,AMONG COOPERATIVE ENTERPRISES
CHAPTER ONE
1.0 INTRODUCTION
The importance of funds to any business enterprise, be it private or public, cannot be over-emphasized. Co-operative societies need funds to finance their fixed and working capital, to pay for services and for making interest-yielding investments. Lack of funds had featured prominently among the key constraints to co-operative business enterprise in Nigeria even at normal times. We can then imagine, or rather, we are all aware of the situation under the prevailing excruciating business climate in Nigeria. (Chukwuemeka, 2001).
The issue of funds has become critical, as expectations, opportunities for small-scale enterprise cannot be seized due to a general lack of investible funds. Added to the abolition of subsidies, the results is fewer resources, tougher competition, higher capital cost and reduced access to credit. This is more so because cheap government credit on which co-operatives relied heavily in the 1980s has since dried up, many banks have gone from distress to bankruptcy, and the surviving ones have constricted their lending. Many people and organizations including co-operative lost their deposits in collapsed banks and finance houses during 1990s. Indeed, the ‘banking culture’, the cultivation of which has been seen as one of the necessary conditions for savings mobilization among small and medium enterprises operators has worn off considerably in view of the aforementioned travails of the financial sector in Nigeria. Worse still, donors in Europe and America, especially the United States, that great watershed of bilateral and multi-lateral aid funds for various assistance program are suffering donor fatigue. Thus small and medium enterprises general are severally hit. But co-operatives which have always been the least able to raise finance capital, appears to be worst affected.
Today, many co-operative are hobbled by a weak capital base, limited credit worthiness and are therefore not in a position to compete effectively with rival business interests. It is on this background that the research tends to review the source of funds available to co-operative society and identify inherent constraints to proper funding of co-operative business enterprises; with a view to stimulating thoughts as to ways and means of deepening and extending them.
