Loans from Cooperatives in Nigeria

Access to loans is an excellent way to kick-start the majority of businesses, given the harsh realities confronting Nigerians in the midst of the global lockdown and the forecast of the global economy slipping into depression.

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People pursue loans through a variety of means, typically with limited success, but few are aware of how readily available loans are through financial cooperatives.

What is a Financial Cooperative?

A financial cooperative is a member-owned and -operated financial institution. A financial cooperative provides traditional banking services while acting on behalf of a unified group of individuals.

These organizations are more concerned with the financial viability of their members than banks are with profits.

Essentially, it is a social lending platform that varies in size and form.

The structure of Financial Cooperative.

These cooperatives allow anyone to join. Members of the cooperative serve as both proprietors and customers. The cooperative's extent is contingent on the number of participants. The more members a cooperative has, the more financial products it can offer.

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Financial cooperatives are typically recognized for their low- or no-interest loans and high-interest savings accounts. This is extremely useful when attempting to manage debt. Some financial cooperatives offer pension programs to their members. Credit unions are an outstanding illustration of a financial cooperative.

Types of cooperative in Nigeria

1.Primary Cooperative: It is possible for members of primary societies who share the same goals and aspirations and reside in the same geographical area to achieve their objectives collectively through synergy.

2.Secondary cooperative: These encompass a broader spectrum of applications. It is the result of the merger of two or more primary cooperative societies with their members and shareholders. The union and councils are included.

3.Tertiary Cooperative:These cooperatives are both primary and secondary.

4.Industrial Cooperative: This is produced by individuals who share a common profession or craft.

How to get a loan from a cooperative society

1.Join a cooperative, preferably one that focuses on improving the financial well-being of its members.

2.After joining your chosen cooperative, you must consult about the loan services.

3.Before you can qualify for a loan, you must have been a member of the cooperative for a certain amount of time. This period may differ depending on the cooperative's  bye-laws.

4.Various cooperatives will have various requirements, but in contrast to banks that focus primarily on asset-based lending, cooperative societies have less stringent loan procedures.

5.Loans are granted at a very low rate of interest to make repayment easier for members.

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Conclusion

The state and federal laws of Nigeria also provide protection for cooperative lending. This is to ensure that members are treated equally and that disputes are resolved. It is a brilliant strategy for consumer lending. Additionally, be aware that cooperative loans may come in forms other than currency, such as asset acquisition, land, mortgage, etc.

In the majority of cases, membership is open to all. As long as you are a member of the organization or community for which the cooperative society is intended. And it is one of the best methods to obtain a loan with minimal or no interest in Nigeria.