Co-operatives

What is a Co-operative?
A business organization owned and
operated by a group of individuals for their
mutual benefit.
Different types of cooperatives include:
– Producer Co-operatives - production of
goods.
– Retail or Consumer Co-operatives – retailing
of goods.
– Credit Co-operatives (credit unions) –
providing credit.
Features of the Co-operative
The members are the customers.
Members can buy shares and obtain
loans.
Members get dividends based on the
number of shares they hold.
Members enjoy limited liability.
Controlled by an elected committee, all of
whom are members.
Advantages of Co-operatives
Buying in bulk.
Working together to solve problems and
take decisions.
Good motivation of all members to work
hard as they will benefit from shared
profits.
Disadvantages of Co-operatives
Poor management skills unless
professional managers are employed.
Capital shortages because no sale of
shares to the non-member general public
is allowed.
Slow decision making if all members are to
be consulted on important issues.