Effectiveness of Credit Delivery Among Agro-Based Cooperative Member Enterprises in Abia State, Nigeria

Abstract

This study is significant as it examines the effectiveness of cooperative societies in providing credit and its potential impact on agro-based enterprises in Abia State, Nigeria. The specific objectives of the study were to determine the socio-economic characteristics of cooperative societies within the study area, determine the types of agro-based cooperative enterprises that received funding, determine the selection criteria used for cooperative society members, determine the loan application and approval process, determine the effectiveness of credit delivery to both agricultural and non-agricultural enterprises, and determine the impact of cooperative society credit on agro-based enterprise growth. The research selected eight cooperative societies and 32 cooperators. Both primary and secondary data were analyzed using various statistical tools, including frequency distribution, means, percentages, queue model, Chi-square, Analysis of Variance (ANOVA), and paired T-test. The findings showed that the cooperatives in Umuahia South had been operational for around seven years and supported agro-based and non-agro-based enterprises. The cooperators agreed that cooperatives must adhere to the necessary criteria when selecting members. The credit approval rate was 51.55%, while cooperative was found to be ineffective and inefficient in credit delivery. In addition, credit had a positive impact on agro-based enterprise production growth. We recommend that cooperatives be guided by their credit outreach objectives, approve more loan requests to enhance their traffic intensity and comply with admission conditions. This will improve their credit access and delivery, potentially leading to significant improvements in the agro-based enterprise sector.