Impact of Cooperative Thrift and Credit Societies on Entrepreneurship and Microenterprise Performance

Microenterprise development is usually affected by§accessible finance. Lack of access to credit deters§most microentrepreneurs because the formal sector has§the impression that microentrepreneurs are not§creditworthy. Cooperative Thrift and Credit Societies§have evolved overtime to solve the problem of§inaccessibility to credit and development of§entrepreneurial ability of owners of§microenterprises. Based on the aforementioned the§purpose of this study is to examine the effect of§belonging to an interdependent society like§Cooperative Thrift and Credit society on enterprise§performance and entrepreneurial development of§microentrepreneurs in southwestern Nigeria.§§A combination of in-depth interviews, survey§questionnaires and participant observations were used§to collect data. Three types of microentrepreneurs:§members of Cooperative Thrift and Credit societies,§non-members who obtain finance from other sources and§those who did not have access to external finance in§the previous five years were surveyed. A comparative§study of different types of microentrepreneurs was§undertaken. Financial institutions in the study area§were also interviewed to assess their impact on§microenterprise development. The impact was evaluated§using real receipt, client longevity, graduation§schedule and other characteristics of the financial§institutions. Analytical techniques used in the study§include descriptive case study, descriptive§statistics, logistic regression, analysis of variance§(ANOVA), analysis of covariance (ANCOVA), and§principal component analysis. The findings of the§study suggested that the entrepreneurial ability,§accessibility to credit and business success of§people in Cooperative Thrift and Credit societies§were better and significantly different from non-members. Microenterprise development is usually affected by§accessible finance. Lack of access to credit deters§most microentrepreneurs because the formal sector has§the impression that microentrepreneurs are not§creditworthy. Cooperative Thrift and Credit Societies§have evolved overtime to solve the problem of§inaccessibility to credit and development of§entrepreneurial ability of owners of§microenterprises. Based on the aforementioned the§purpose of this study is to examine the effect of§belonging to an interdependent society like§Cooperative Thrift and Credit society on enterprise§performance and entrepreneurial development of§microentrepreneurs in southwestern Nigeria.§A combination of in-depth interviews, survey§questionnaires and participant observations were used§to collect data. Three types of microentrepreneurs:§members of Cooperative Thrift and Credit societies,§non-members who obtain finance from other sources and§those who did not have access to external finance in§the previous five years were surveyed. A comparative§study of different types of microentrepreneurs was§undertaken. Financial institutions in the study area§were also interviewed to assess their impact on§microenterprise development. The impact was evaluated§using real receipt, client longevity, graduation§schedule and other characteristics of the financial§institutions. Analytical techniques used in the study§include descriptive case study, descriptive§statistics, logistic regression, analysis of variance§(ANOVA), analysis of covariance (ANCOVA), and§principal component analysis. The findings of the§study suggested that the entrepreneurial ability,§accessibility to credit and business success of§people in Cooperative Thrift and Credit societies§were better and significantly different from non-members.