FEASIBILITY STUDIES A REQUIREMENT FOR STARTING A NEW COOPERATIVE BUSINESS IN NIGERIA

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Author

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Department of Economics

ABSTRACT

The project is focused on feasibility studies: a requirement for starting a new cooperative business in Nigeria. The importance of a well prepared feasibility study in the cause cooperative information and investment drive cannot be over emphasized. A well prepared feasibility study can be used to obtained loan from banks and thus attract other investments. Cooperative projects backed by good feasibility studies are difficult to wind up easily. The drive for investment can only take place when there is sufficient money or resources. For any project there are the alternative technology, production equipment, building and other investments. This study takes a look at cooperative formation and investment drive among registered co operative in Enugu East, Enugu South, Enugu North and Enugu central). The computation of sample size was based on Tao Yamani Technique of which a sample size of 193 was selected. The simple percentage analysis and test of hypothesis were used in treating the data. And recommendations and conclusion were drawn from the findings f the data analyzed.

INTRODUCTION

1.1BACKGROUND OF THE STUDY

          For over a decade now, the Nigerian economy has been in dire strait or doldrums. The continued economic crunch has highlighted the need for feasibility studies before embarking on any project.

          Feasibility studies involved closer examination of cost and benefit of a project with a view to ascertain whether it is feasible, viable and profitable to undertake such a venture.

          The aim of this study is to let business operator and the general public know the importance of a feasibility report, in any business venture most especially cooperative business venture. The drive for investment can only take place when there is sufficient money or resources. The importance of a well prepared feasibility studies is a requirement for starting a new cooperative business. A well prepared feasibility studies can be used to obtain loan from banks and thus attract other investment. A co-operative business backed by good feasibility studies are difficult to wind up easily says Banmbank (2012). Having the right goods at the right place at the right time and prices is the accepted objective.      He also believes that control is indispensable. The whole idea of a feasibility study is compliments and facilitates two important functions which is business planning and control. Thus a feasibility study shows whether a propose business opportunity will succeed or fail after a careful consideration of alternative against the firms objective. Different views on why people are motivated to form or join a cooperative society. Cooperative societies create an alternative way of doing business for the socio-economically disadvantaged people. It is clear naturally that the intention or motive for establishing a sole trade, partnership or joint stock company are similar but not same for starting up a new cooperative business in Nigeria.

          According to Omuoha (2013) profit motive is the motivating factor for private entrepreneurs while service to member is the motivating force for cooperative, the necessity for making a choice between investment alternative arises frequently in business decision (Ude 2012). Accordingly, it is necessary to appraise your project to determine whether it is worth going into the business or not. For any project, there are alternative technologies, production equipment, building and other investment. As each decision is concluded the next issue is the problem of selecting the most viable of the various alternatives.