Definition and classification of cooperative societies
A cooperative society is a group of individuals who have specific common needs.It is an economic enterprise,the purpose of which is to improve the economic status of owners or members.Most cooperative societies offer their products to their members and others do not serve non-members.
Cooperative societies have varied classification depending on what their members are concerned with.They include:
*Agricultural marketing societies.
They are cooperative in the Agricultural and marketing sector.Their functions are to collect,process,store and save members’ produce.These cooperative play a major role as some small scale farmers would have a hard time marketing their products individually.
They are generally formed to meet and supply members’ demand for food,clothing and general household goods.This aim is fulfilled through members running consumer shops and wholesale facilities where members buy goods at lower prices compared to those in the market.They were prominent in the sixties and contributed to the origin of supermarkets.
*Savings and credit cooperative.
They are the more common type found in Kenya.Their main purpose is to mobilize savings and channel them to individual members as loans for specific development projects at affordable rates of interest.
*The processing cooperative.
They have a similarity to agricultural and marketing.Their main function however is to process the products for members.An example is the Kenya cooperative creameries.
They are involved in purchasing vehicles and using them for public transport or for hiring or leasing.
They may also be formed for management of public transport vehicles of their members.
*The insurance cooperative.
They have the project of developing and providing insurance services based on the cooperative principles.They also provide insurance covers to cooperative societies.
They buy and develop houses for the members or sell houses to members at lower prices.
Cooperative management – foster free circulation of information within the company,– establish, support and reward behaviors based on trust and mutual help,
– make sure that the company’s best interest is also the best interest of its employees in order to induce them into participating,
– mobilize human skills, processes, as well as financial and technological resources so that the company’s goals can be reached.
Co-operative movement is the heart of this country’s progress, cutting across all sectors. It is based on principle of pooling meager recourses for the common benefit of all.