Full Project – Problems and prospects of cooperative in small scale business in Nigeria

Full Project – Problems and prospects of cooperative in small scale business in Nigeria

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In this chapter, the study will take a critical look at the synopsis, a historical analysis, production process, statement of problems, objective of study, the scope, limitation of the study, research questions and of course the significance.

After about a decade and a half of adopting an industrialization strategy based on large /scale industries, mostly of the assembly type, Nigeria has achieved only a fragile industrial development. A little after independence, some cooperative in small – scale industrial could not really continue to exist left alone flowish due to the fact that they were either swallowed up by the larger ones or by foreign firms.

The large scale industries which were set up tended to be capital intensive and inappropriate, given the countries resource endowment. Their capital equipment and technical manpower have continued to be largely imported.

As a result, the triple objective of setting up the plants, achievement of high level, local up the plants, achievement of high level, local level, value added foreign exchange, saving and acquisition materialized. For instance the assembly plants have not achieved up to 20 percent in local material sourcing instead they are more or less systematic foreign exchange are more or less systematic foreign exchange guzzlers with neither the will nor the capacity to transfer any meaningful technology beyond the punitive type.

What is cooperative in small scale firms as an expert on the subject.

  • The Nigerian industrial policy describes cooperative in scale firm as those with total investment of between N100, 000 and N2 million naira with the exclusion of land and capital Ademola; 1982).
  • It also defines as micro-cottage industrial as those whose total investment cost does not exceed N100,000 including working capital but excluding land.
  • For the purpose of this project, a cooperative in small-scale industry is defined as a sole proprietorship business whose see would not allow for elaborate administrative structure. The span of such firms is usually short and concentrated in the hands of a few persons. (Nwachukwu, 1990).
  • Cooperative small scale industries constituted over 70 percent of all registered cooperative. This, if encouraged could provide opportunity for employment on a large scale and make the possibility of adequate distribution and national income more realistic (Abiola O. 1996).



The desire of most developing countries including Nigeria is to have a self –reliant and resilient economy capable of generating an internally self-sustaining growth for many decades developing countries have been exporters of raw materials and the industrialized west (Ukpan 1993).

Developing countries are now striving to transform their economy since the current state of the economy has made people to realize the utility in depending on paid employment for survival. Under the current economic situation, theories of economic development suggest that a rapid growth would occur when the available resources are completely harnessed and utilized for the production of goods and services.

Unlike large scale firms, small businesses are scattered on almost every part of the country and are engaged in either manufacturing or commercial activities.

In recognition of their flexible nature as well as their regenerative power of promoting economic growth, government in 1988 introduced the National Directorate of Employment (NDE) and some other monetary directive to bank to promote the industry. Although the programmes succeeded in the emergence of small-scale business in the area of bakery, garment making, shoe manufacturing, Haralson, farming, garri processing and cream production etc. Their surviratrates still low, due to the high interest rates of banks in giving loans, government regulations, traditional and cultural values.

Despite numerous government efforts and programme aimed at stimulating and sustains the growth and development of the  industrial sector especially the small scale sub-sector, yet scale business are endowed with lots of problems.


These problems could be that of capital management problems, man power or problems, problems of quality management and standards, as well as marketing problem etc.

Focusing on marketing problems as we recognize that the mangers has to combine a variety of functions, it is therefore, apparent that he lacks the resources and skills for effective marketing. He cannot afford the cost of displays (windows) and showrooms.

He can neither keep in contact with distant markets of distribution agencies, at times he might have to sell his products to middlemen who advance him some credit at extorting interest rates.

Hardly does he know the changing market trend to be able to make appropriate adaptation in his products and may suddenly be caught up by changes in demand as a result, this leads to heavy losses because he is unable to marketing and appropriate adaptations.

Furthermore, there are problems arising from the competitive nature of the marketing environment fluctuation in both prices and demand and as well failure of clients to pay and collect items they had ordered.

It is the task of marketing to yielded the firm into generator only those right promotion, serving pricing and distribution that is from the customer point view and continue to do so at a profit or simply put, materialize the doctrine, get the marketing right and everything also comes right, the marketing wrong and the problems comes.

Some selective cooperation societies in Owerri West L.G.A face the problems of small scale industry thus, in these research, the research will e-ray this problems and solution offered.


For the period under view, the countries economic objectives centered on reducing the level of importation promoting the expansion of domestic production especially in the small-scale manufacturing sector. However, small-scale business in Nigeria today are faced with a lot of problems.

These problems go a long way to hamper their prospect and growth in the country and thereby limiting their potential contribution to the development of the economy cooperative societies in Owerri west LGA is no exception.

Some other problems effecting small-scale firm, including cooperative societies in Owerri west L.G.A are:

  • The inability to offer credit facilities and adequate discount to customers to enable them buy more of the consumer goods which has affected the sales volume
  • Inefficient distribution strategy which has effected the availability of their product, their delivery and the work of the sale representatives.
  • Lack of adequate warehouse facilities which has affected the storage of products
  • Lack of finance for expansion-inability to carryout consumer product
  • The incidence of bad debts which has affected the working capital of the organizations.
  • There is no doubt that the above problems have impacted negatively on the development, sale and profitability of cooperative societies Owerri West L.G.A.


The objectives of this study are:

  • To identify and examine the problems militating against the effective operation of cooperative societies in Owerri west L.G.A in the area of marketing.
  • To identify the prospects available to the cooperative societies, regard to marketing
  • To identify the pricing strategies used by the cooperative and their impact on the organization
  • To ascertain if product quality constitute a problem to cooperative societies in Owerri west L.G.A
  • To identify distribution faced by cooperative societies in Owerri west L.G.A
  • To identify promotion problem
  • To find out whether finance is a problem to cooperative societies in Owerri west.
  • Suggesting ways of solving the identified problems.



To solve the research problem, have asked the research questions.


  • Does product quality constitute a problem to the cooperative societies?
  • Does prize constitute a problem to societies product?
  • Does lack of infrastructures attest the marketing cooperative societies
  • How regular does they patronize cooperative societies product?
  • Does effectiveness of government police project small scale business?



In order to facilitate investigation in a study of this nature, it is useful to formulate tentative hypothesis which will provide the necessary guide in all through the work.

The hypothesis do not only serve as a guide, but facilitate the drawing of objective conclusion and the making of meaningful.

In the light of the above, the hypothesis for this study are:

Hoi: product quality does not constitute a problem to cooperative societies in Owerri west LGA’s.


Hi: Product quality constitute a problem to cooperative societies in Owerri West LGA’s.


Ho2: Prizing of product does not constitute a problem to cooperative societies in Owerri West L.G.A’s.


H2: Prizing constitute a problem to cooperative societies in Owerri West L.G.A’s.


Ho3: Distribution does not constitute a problem to cooperative societies in Owerri West LG.A’s.

H3:  Distribution constitute a problem to cooperative societies in Owerri West LG.A’s.


Ho4: Promotion does not constitute a problem to cooperative societies in Owerri west LGA.

H4:  promotion constitutes a problem to cooperative societies in Owerri west LG.A.




The researcher was primarily motivated into undertaking this particular research work because of the effort some Nigerian industrialists are making towards establishing good marketing  networks in small scale industrial.

This study will be a great benefit to operators of small scale business including cooperative societies in Owerri west L.G.A not only in Imo state but also in other part of the country being that the study will unveil some of the most effective and efficient marketing game plan that could be adopted by operators.

This study will also provide useful information to the government on the marketing problems faced by the small-scale industries and will also provide a lot of strategic approach to small scale operators towards an increase in sales and competing favourably with the large scale operators.

The study will help the management of cooperative societies in Owerri west LGA to realize the need for efficient and effective marketing strategy in order to survive in competitive market environment.


The government in his own part would know where it falls short of expectation in assisting these small-scale business improvement in cooperative societies in Owerri west LGA industries limited as a result of application of good marketing strategy which will enrich the economic and social well-being of consumers in Imo state.

Above all, this study will be also beneficial to both the researcher and the reader as the study will provide an indebt knowledge and understanding in area which could stir up further study.


The scope of this study would have been very wide if it had to be carried out in all small-scale business in Nigeria.

The study is limited to cooperative societies in Owerri west LGA in Imo State based on the fact that there is no time and material resources to see to the whole nation.

The finding of its study may not reflect the situation in the whole country.

These findings may not valid for the whole small-scale business in Nigeria, but by and large, what happens in cooperative societies in Owerri west LGA in Imo State can be said to apply to other small business.



In time with, most research carried out within the academic environment by students, this research work was subject to basic constraints.

Time: It was not easy for the research to combine time with that of carryout this research and melting up with other academic engagements.

Funds: Insufficient funds affect work of this nature. Also, the officials and customers of the firm interviewed deficiently in getting reliable data in relation to this study as a result of relevant on appropriate texts, facts relating to the topic under study.



Capital: Capital is refers to the original fund of any businessman which was almost invariably made wholly of his own resources it amounts to the excess of total assets over total liabilities Akwaeze G.C 1985).


Problems: Difficulties to deal with or understand could also be regarded as confrontation hindering success (oxford advanced learner dictionary fifty edition 1995. Pg 21).

Consumer: A consumer is the final user of product or services. It consists of all the individuals, groups or household buying product for personal consumption (Chukwudi No 2004 pg 63).


Industrialization: This is a process of change by which an economy becomes based on industrial population rather than a agriculture (Anyale 1990: 284).


Tax: Tax defined as tariff imposed on goods intended to make in port more difficult and bring revenue to the government.


Prospects: An ideas of what may or win happen expectation of the organization 9advanced learner dictionary (fifth edition 1995: pg 931).


Industries: These are factories that are involved in the manufacturing product.

(Oxford advance learner’s fifth edition 1995 pg 608).


Small businesses: The definitions of small scale industry vary from one country to another from state to state and from institution to institution (Krecther 1995: 62) defined small business as independently owned and managed profit seeking enterprise with fewer than 100 employees.


Agbo G.C.O 200 pg 18), in his explanation of small scale industry cited Drucker P.F 1974, who maintains that there is only one criteria with which a fair degree of reliability, indicate whether a business in small business requires big.. He says that a small business requires at most one may who is not engaged in any other functional worked.


The man at the top know who the few people are in the organization in who responsibility for key result without having to consult his records or associates.

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Full Project – Problems and prospects of cooperative in small scale business in Nigeria