Structure of Cooperative Societies

Cooperative Societies remain one of the most valid forums where people get together to achieve goals they wouldn’t have achieved on their own. Like in every other human society, the presence of a workable structure cannot be overstated. A structure is needed to guide activities and due processes in any community or organization. In view of this, Mr. Kayode Osunremi, Business Manager of Prime Assets Housing Cooperative Multipurpose Society, sheds light on the structure of Cooperative Societies.

Structures are set to achieve basically the same goal in different communities and organizations, but they are hardly ever the same everywhere. There is a uniqueness that comes with it based on peculiarities of the sector or nature of the people involved. The Structure of Cooperative Societies have a striking difference to what you will get in the church, bank or in any other kind of formal or informal organizations. Mr. Kayode will be taking us into an overview of this topic on the Micro and Macro level.

Below is the structure of Cooperative Societies as explained by Mr. Kayode Osunremi:

Thank you for the opportunity to share some information about the Structure of Cooperative Societies, the regulatory bodies and how the Micro and Macro level interacts. First, I would like to quickly draw out this point. We have different types of Cooperatives – We have the CTCS which is the Credit Thrift Cooperative Society, who engages only in savings and credit. We then have a more elaborate cooperative institution that is allowed to engage in other businesses beyond savings and credit, and that is where the Multi-Purpose Society comes in. These ones go into other business as long as they will yield some returns at the end of the calendar year. We also have specialized cooperatives like Housing Cooperatives, FADAMA Cooperatives, Cooperatives for Transport Union workers or other professions and many others like that. The niche of the founding members and their set objectives are what informs the kind of cooperative that is formed.

Looking at the structure, I will like to use the Top-Bottom Approach, so I will start from the top. The number one government organization saddled with the responsibility of issuing rules, regulations, and guidelines lies with the Lagos State Ministry of Commerce, Industry and Cooperatives which used to be Lagos State Ministry of Agriculture and Cooperatives (this was changed at the advent of the incumbent Governor, Akinwunmi Ambode). The body is the apex body. They provide the rules and laws guiding cooperative establishment in the state and that is how it applies to every other state. This is different from the way the Central Bank of Nigeria adjudicates on all commercial banks and microfinance banks. The cooperative system is localized per state; which means every state has its own ruling body, depending on the government agency saddled with the responsibility. So what we have in Lagos may not apply in ogun, but Ogun definitely has its own Cooperative Regulatory Body. It is not a Federal Government issue, although the individual bodies in each state gets to interlink at some point because the cooperative laws are derived from Federal Laws which are cascaded into state laws. The cooperative laws are then called the Bye-Laws – a mini constitution that guides the existence of a cooperative society.

The same ministry which is still in view, has other duties such as registration, vetting of accounts, ensuring that each cooperative under their purview adhere strictly to the tenets, rules and regulations guiding the cooperative.

Coming a bit below, still using Lagos State as a case study, we have LASCOFED – Lagos State Cooperative Federation – which is more or less like the next in line after the Lagos Ministry. LASCOFED is the umbrella body for all cooperatives. It is another organization that works at a closer level, beyond the regulatory level, with the cooperative societies in areas of capacity building. Their job essentially is found in capacity building, trainings, seminars, and the likes. The LASCOFED comprises of unions. These unions are made up of cooperative societies within a particular district. For example, Prime Assets Housing Cooperative Multi-Purpose Society is in Maryland, so it belongs to the Ikeja Union. Each union aggregated together, falls under a federation, and the federation falls under the Government agency.

At the local level, which is the level of the cooperative society itself, every cooperative society around Ikeja and its vicinity falls under the Ikeja Union. All the unions in every other part of Lagos falls under the LASCOFED. The LASCOFED itself is basically under the Lagos State Ministry of Commerce, Industry and Cooperatives.

That is how the hierarchy evolves at the Macro Level.

In a quick note, whilst we all know the Ministry to handle the supervisory role for Cooperative Societies, there is still a lot to be done to make them as firm as what Central Bank is doing for all Banks. The control in the cooperative sector is not yet firm and it makes a lot of cooperative societies involve in malpractices. For examples, the ministries are expected to intervene in issues of loan defaulters in a particular cooperative society, making such defaulters to face the book; but this hardly so. We think the ministry should come out stronger and help add some firmness. They are trying really, but there is a lot more that can be done to bring more sanity to the sector.

HEIRARCHY IN COOPERATIVE SOCIETIES AS A UNIT

I mentioned earlier that a cooperative can either be employee based, credit based or business based, depending on the founding fathers. In an employee based cooperative (cooperatives formed by workers in a particular company) for example, staff of the company where the employees work are used to run/manage the society. In such a cooperative the hierarchy exists thus:

The management committee which you can also call the Board of Directors consist of the President, the Vice-President, the General Secretary, the Treasurer, the Financial Secretary and (in some cases) the Assistant General Secretary and ex-officio members.

Ex-officio members are members of the cooperative, not part of the management committee, but they have oversight responsibilities over all other committees. Apart from the management committee, cooperatives have sub-committees like the credit committee, farming, building committee etc depending on what their niche/major line of business and set objectives are.

Usually, in a stand-alone cooperative, you will have a Manager. Then there will be an Account and Admin Staff, and a Marketing Officer. But there are fixed rules to it though; it depends on the outlay, or the end goal of the particular cooperative. Overall, there has to be a management committee/team comprising of those I have mentioned earlier and an employee if the cooperative desires.