Full Project – The impact of thrift and credit societies on workers welfare and productivity in an organization

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CHAPTER ONE

1.0 INTRODUCTION

Unemployment is a major challenge in many developing countries including Nigeria. Unemployment breeds a lot of private and social consequences which are negative (Alam et al., 2009; Alam, 2009). These include poverty, crime, social inequality, loss of output, family disintegration, among others. Governments all over the world concert efforts to mitigate this problem (Alam, 2009). In Nigeria, several efforts have been made to create jobs for the teeming able bodied people who are available for work but who are yet to find jobs (Goodluck, 2011). One key source of unemployment in Nigeria is dearth of capital required to combine with other factors of production, which are, land, labour and entrepreneurship (Nieman et al., 2003). Credit and thrift societies constitute a source of capital formation and employment generation. According to Harrod and Domar (1957), savings mobilization and subsequent investment is the key to economic growth and development.

1.1 BACKGROUND OF THE STUDY

According to O. Kecffe (1980:11) “a thrift and credit societies is a voluntary association of individuals united by a common bond, who had join together to encourage each others to save regularly part of their earning and provide themselves with credit at a reasonable rate of interest.

A thrift and credit society provides its members with convenient and secured means of saving many and of obtaining credit at a reasonable rate of interest. Also the same way employees and similar group can organize themselves into cooperative thrifts and loans, to encourage and practice thrift and savings habits among themselves.

The thrift and credit societies are organized within a group already united by a common bond (workers in an office or factory, members of the same club, organization or community) who are well known to each other.

It is operated under the cooperative law of the state of country. The cooperative thrift and credit societies as the name implies each members of the society how to be prudent in the use of their limited resources among various competing needs by plugging back part of their earnings in the form of regular savings.

The members are entitled to credit facilities from the society as stipulated in the bye-law of the cooperative society (this depends on number of year one puts in an organization). The credit facilities may take little or no interest usually ranging from 3-15% subject to the society (JAFS, 2004).

It is quite interesting to note at this junction that loans from any cooperative thrift and credit societies do not require any collateral security such as demanded by commercial bank or other financial institutions before loan is granted.

The only security in thrift and credit society is that the member in need of loan should bring guarantors who signs surely for the loan in case of any default. The guarantors must be members of the thrift and credit so city. The emphases on thrift and credit society is the generation of funds among the working class people traders, professionals and even people of common interest, who lives, or work or business within the same geographic boundary.

The common bond must be that which act as unifying factors. It should be noted that they do generate fund by investing some of their savings in either banks (by saving or elsewhere that will yield interest or profit).

The thrift and credit societies have its objectives in workers welfare and productivity in an organization.

1.2 STATEMENT OF THE PROBLEM

Running a thrift and credit society, especially in an organization is not an easy job. The management committee of such society is faced with numerous problems which affect member’s participation and turnover.

Three outstanding problems being faced by the management committee are:

The problem of the fashioning generally acceptable conditions for granting loans to members in order to increase their patronage.
Lack of proper communication between the executive committee and sectional representative directly to the active members of the society.
Lack of training members which is mostly caused by insufficient fund.

1.3 OBJECTIVE OF THE STUDY

The purpose of this study is basically to find out the impact of thrift and credit cooperative society’s activities on workers welfare and productivity in an organization.

The specific objectives may include among others;

To determine the range of activities carried out by the cooperative thrift and credit loans societies of Imo State professional staff cooperative thrift and loan cooperative society limited.
To examine its effect on the members in the organization.
To reflect the level of participation in thrift and credit society’s activities by the workers/members of Imo State professional staff cooperative thrift and loan society limited; and its contribution to workers welfare and productivity.

1.4 RESEARCH QUESTIONS

Why is thrift and loans cooperative society faced with the problem of fashioning out a generally accepted condition for granting loans to members in order to increase their patronage?
Have thrift and credit cooperative societies promoted workers welfare and productivity in the organization?

Do thrift and credit cooperative society really sourced their fund from its members in the society?

Can government intervene to find solution to these problems encountered by thrift and credit cooperative society, since it is a self-help organization?
Since mobilization of fund is the main function and insufficient fund is a problem to the society, can these problems be solved?
Do thrift and credit cooperative societies assist cooperative businesses in the society?
Finally since a cooperative society is good at keeping reserve fund (25% or ¼ of the net surplus) according to cooperative law, can this reserve cause egotism of the management (self-centeredness).

1.5 STATEMENT OF HYPOTHESIS

Ho: Thrift and credit societies have no impact on workers welfare and productivity because of their inability to grant loan to their members/workers.

Ho: Thrift and credit societies have not lives (members/workers) positively by granting loan to them.

H₂: Thrift and credit societies have affected workers lives positively by granting loan to them.

Ho: Thrift and credit societies have not provided loan to members at a low interest rate.

H₃: Thrift and credit societies have provided loan to members at a low interest rate.

1.6 SIGNIFICANCE OF THE STUDY

This project will provide information about the usefulness and importance of thrift and credit societies to the management of Imo State professional staff cooperative thrift and credit society, and its effect on workers welfare and productivity.

Thrift and credit society can also be useful to other societies like: marketing societies.

Agriculture credit societies, by provision of accessible credit to them. Above all, it will serve as a reference for future researchers in the area.

1.7 SCOPE OF THE STUDY

The study will cover all departments, units and the various sections of the organization which is Imo State professional staff cooperative thrift and loan society limited, it will also cover the administrative section.

1.8 LIMITATION OF THE STUDY

These are the obstacles encountered during the study. For example, finance, time, language differences, unwillingness of the respondent to give out relevant information. It must be pointed out that the research may not be 100% precise due to time and financial constraint. The time the researcher has for completing this study is very short and the cost of executing is also high.

Hence unavailability of fund needed for the project work may affect the study. It is hoped however, that the above limitation will in one way affect the validity of this project.

1.9 DEFINITION OF TERMS

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