OPERATION OF SAVINGS AND LOANS ASSOCIATION IN THE CIVIL SERVICE

By

NWAFOR AUGUSTINA .I.

Presented To

Department of Accountancy

TABLE OF CONTENT

COVER PAGE I

TITLE PAGE II

APPROVAL PAGE III

DEDICATION IV

ACKNOWLEDGEMENT V

TABLE OF CONTENT VI

CHAPTER ONE

1.1 Introduction 1

1.2 Background of the study 1

1.3 Statement of problem 4

1.4 Objectives of the study 6

1.5 Significance of the study 6

1.6 Scope and limitations of the study 9

CHAPTER TWO

2.1 Literature review 11

2.2 Historical survey of co-operative society. 11

2.3 Types and objectives 12

2.4 Qualification, rights and duties of members. 13

2.5 Method of accounting and credit control 14

2.6 Co-operative disputes arbitration and

Communication 15

2.7 Research methodology 19

2.8 Source of data 19

2.9 Treatment of data 20

2.10 Limitation. 21

CHAPTER THREE

3.1 Summary of finding 22

3.2 Conclusion 23

3.3 Recommendation 24

BIBLIOGRAPHY

CHAPTER ONE

1.1 INTRODUCTION

1.2 BACKGROUND TO STUDY

According to J.K.Clnoh, "Savings and loans association are financial institution or intermediaries that channel funds on surplus economic units to deficit economic units". The modern savings institution include the insurance companies, the federal savings Bank, provident fund, pension funds, co-operative societies and credit organizations.

However, some of the traditional savings and loan association include: "ESUS system". Age Grade Association, married women Association, etc. what distinguishes all these association from other financial institutions is that they collect and mobilize savings from their members and gives loans to their members and the public in some cases.

They are organized solely for the benefit of their members. The savings and loans association are different from commercial banks because thy do not create money. That is, commercial banks create money but saving and loans associations do not create money. It is voluntary because each member determines the actual amount of regular savings to make. In other words the principle of self imposed but group influenced mandatory savings is what operates in these association. For the purpose of this research, co-operative society as a form of savings and loans association will be extensively studied with particular interest on thrift and loans types as operated by salary/wages earners in government ministries/parastatals.

There is hardly any community in Nigeria today where one type of informal credit association or the other does not exist. Such association have existed from immemorial. The traditional "ESUS system" as earlier mentioned is still very much with us. These association operate on the premise that people would actuate more if their individual resources were pooled together. It was hot until mid 1930's that formal co-operation was introduced in Nigeria.

Even after that and up till the present informal association are mentioned above still exist side by side with co-operative societies.

This therefore, goes to emphasis the importance of thrift in the lives of the people. A co-operative society, we know is an association of persons who voluntarily join together to solve their common economic needs through self help. Members join a co-operative to promote the economics interest of themselves through joint actions. In the course of this research, consideration therefore will be given to the particular nature of thrift and loans societies as are operated in government ministries/parastatals to identify those factors that make for their continued existence. Similarly, efforts will be made to find out the capable of management that bandles the affairs of these societies to justify the fact that certain level of education is necessary for effective and viable organisation of co-operatives. It is equally important that this research work will find out whether the government offers any financial step to foster the growth of these societies.

Furthermore, it will be great interest to know the possible reasons if any why some workers or staff do not belong to these societies despite their laudable objective of promoting economic interest of members. Also some likely problems facing co-operatives will be highlighted. There will be need to know to what extent the rules and bye - laws are made flexible to accommodate more interest groups so as to ensure mutual existence of every member.

Finally, in addition to the fact that this research will serve as a secondary material for future researchers, it also offered reader a rare opportunity of knowing how thrift and loans association operate in government ministries/parastatals.

1.3 STATEMENT OF PROBLEM

Most salary/wages earners especially those in the low income bracket find it difficult to save some of them do not even have bank account except those whose salaries are paid through the bank by their employers. Civil servants especially those in the lower cadre, experience some difficulty in obtaining credit from financial institution for mobility to provide adequate as well as acceptable collateral securities to guard against the risk of default.

Thirdly, the operation of thrift and loan societies in government ministries/parastatals have faced some serious financial problems due to low financial contribution by members thereby limiting the extent of activity that could have been undertaken by those societies.

Finally, some salary/wages earners are not members of thrift and loans societies. In their places of work despite the mutual economic interest of members been pursued by such societies.

STATEMENT OF OBJECTIVES

1. To examine the operation of co-operative societies especially the thrift and loans types as obtains in government ministries/parastatals with a view of finding its short coming and influence on the workers

2. To identify why some workers/staff refuse to belong to these societies despite their welfare nature.

3. To make recommendation aimed at fostering, improving and enhancing the services of there societies.

OBJECTIVES OF THE STUDY

1. It is more beneficial for members to borrow from co-operatives than from banks.

2. It is more beneficial to save in bank than in co-operative societies.

3. Peculiar situational factors promote the existence of co-operative societies.

SIGNIFICANCE OF THE STUDY

For the purpose of in-depth study and analysis the author concentrated his research work on only ten government offices which operate similar types of societies to allow for the effective s comparison.

However, the ten chosen ministries/parastatals are all in Enugu state. meanwhile for the fact that Enugu state was recently created during the period of this research, most of the information hereby supplied would rather be that of the former Anambra state. however, the view expressed here by the author can adequately represent what is mostly prevalent in many parts of the country. Stated below and the ten chosen ministries/parastatal on which the research is therefore based. That is on the co-operative thrift and loan societies existing in those ministries.

Source: D.D.C. Divisional co-operative council Enugu.

CHAPTER ORGANISATION

To make for easy reading and comprehension, this project paper has a total of five chapters which collectively were brought under one heading known as chapter organization.

The aim was to state clearly what each chapter organizing contain. For instance, chapter one deals on the introduction which is further sub-divided into:

The Background to study, problem identification statement of objectives, hypothesis, scope of study. Chapter two on the other hand reviewed the related literature. Previous write - up, the topic were brought into focus to know hoe government ministries/parastatals.

Similarly, chapter three was on research methodology with emphasis on what method of data collection used. Some of the limitation encountered in the course of this research work were equally highlighted.

SCOPE AND LIMITATIONS OF THE STUDY

SCOPE OF THIS STUDY

This is an official investigation historically consisted mostly of long "grip lists of all eyed distortions with little assessment of their relative importance.

In this study, only the trade distorting propensities of government measures within developed, market - oriented economics are examined.

The private sector and the developing and centrally planned economy omitted from consideration on no tariff distortions and then unlike Likehood of immediate behaviour codes in these sectors.

LIMITATIONS

Opinions on the importance of nor tariff impediments to trade very from those of some businessmen who imply. They have long been more important officials who infer that their importance has been lastly distorting policies are evaluate where possible in terms of tariff equivalence and the probable in impact on trade were their.

Balance of payment and unemployment constraints

The unwillingness or inability of government to alter exchange - role fiscal and monetary policies in conjunction with commercial policy changes in order to improve the potential world income is a serious constrain. Economics have emphasized since the time of Adam Smith that, apart from terms of - trade impediments reduce a country's real income

Yet no modern industrial state is prepared as a matter of policy to reduce its trade restriction unilaterally in order to realize the long run income benefits of such a reduction.