All such co-operatives perform functions that are practically related. The core function is to improve access to credits at critical moments or more succinctly, financial intermediation. Principally, such co-operatives aim at making it easier for people (especially people with low income) to save, thereby increasing the amount of money available for lending to members. Loans and credits are provided to members at much more traditional and easier conditions than the methods adopted by commercial banks and other financial institutions (Otto, 2006). The thrift and credits co-operative is the earliest of cooperatives to have been formed worldwide and also in Nigeria. According to Abia (2000), it was the bedrock of capital formation of the lower Cross River Region in Nigeria.
2.6.1 RISKS INVOLVED IN THRIFT COLLECTION BUSINESS
1. Criminals – Like every money business, the danger of being attacked by robbers and hoodlums is always there, especially if you do collect large sum everyday. You have to device means of conveying your money in a secure manner.
2. Friends and Family – Once they know you collect money on daily basis, they don’t want to know how delicate the fund is, they would want you to use it in solving their problems. Some will come for loans and insist they will get it, after all, there is money in your hands. They will begin to come up with useless business ideas hoping to finance it with the money you collect.
You need to be firm, extremely firm in your decisions never to borrow anyone from the money because if you do, then prepare to go to jail since it’s obvious they wouldn’t pay.
3. Lack of Self Discipline – You may as well be the greatest danger in your business. Once you have the money in your hands, you begin to dream big in the negative ways – you start engaging in frivolities, showing people you have arrived on top of people’s money.
Please if you know you lack self discipline and proper management skills, do not disgrace yourself by going into thrift collection business. This business is exclusively for decent, well respected people.
4. Poor Decisions – You starts getting people’s money and you begin to think about unrealistic businesses. Invest only in business that is realistic and profitable, a business you have the time and knowledge to manage very effectively.
2.6.2 HOW TO SETUP YOUR THRIFT COLLECTION BUSINESS
1. Record Cards –. It is the card given to the members, where the thrift collector use to record the payment made by the member each day. The record cards involve saving
2. Cash Register – It is not just enough to register the money collected on the depositors record card, you need to register it on your cash register too. Every entry has to be accurate and signed by you on both record books
3. Sales Girls/Boys – Many have been maimed in this business by the sales girls/boys they hired. If you are to employ the service of sales persons who will be in charge of marketing and collecting the funds, you must hire from your family. Such person must be a close trusted family member with good track record. This business involves handling of money, do not hire strangers to do this for you.
2.6.3 Categories of Cooperative Societies in Nigeria
i. Producer’s cooperative societies: The producer’s co-operative societies were established by the small producers. With members of the society producing goods in their houses or at common place. The raw material, tools money etc. are provided to them by the societies. The output is collected by the societies and sold in the market at the wholesale rate. The profit is distributed among the member in proportion to the goods supplied by each member.
ii. Consumer’s cooperative societies: Consumer’s co-operative societies were established to remove middlemen from the field of trade. These societies purchase foods at wholesale prices and sell these goods to the members at cheaper rates than the market
iii. Marketing cooperative societies: The marketing cooperative societies were formed by the small produces for the promotion of trade. The two main objectives of these societies are, to sell the good at reasonable prices by eliminating middlemen and to make the ready for the product of the member. These types of societies are formed by the small agriculturalist and artisans.
Theses societies collect the products of its members and make its grading and keep them in warehouses and sell them in the market at whole sale rate when the market is ready for these products. The profit is distributed among the member according to the ratio of goods supplied by them.
iv. Credit cooperative societies: These co-operative societies are formed for the financial help of the members. These societies provide loans to the members at low rate of interest. In rural areas these provide loans to the farmers for the purchase of seeds, fertilizers and cattle. In urban areas these societies provide loans to its members for the purchase of raw material and tools.
v. Farming cooperative societies: These societies are formed by the small agriculturalists to get the benefits of large scale Farming. These societies provide help to the farmers for the improved methods of cultivation by providing large scale farming tools such as tractors, threshers and harvesters etc.
