The impact of co-operative finance on household income : a case study of co-operatives in KwaZulu-Natal

Khambule, Nhlanhla (2015-04)

Thesis (MDF)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: This study is on the impact of cooperative societies on capital formation using a case study of selected cooperatives in Kwazulu Natal province of South Africa. The study is a novel empirical investigation in that focuses on impact of cooperative societies financing on members and how that may translate into significant increase in household incomes. The study assess and evaluates the roles played by cooperative societies’ financing and loans services on members’ economic condition particular their business expansion, profitability and later on improvements in household incomes. Using focus group discussion and questionnaire, the study uncovers the activities of cooperative societies located in both urban and rural communities within KZN Province. The study provides some evidence on the importance of leaving conditions after member access to cheap and affordable loans and provides some insights into the development of rural businesses, how complex they are, and how they require more input than just the financing received through cooperative loans as a final end. It also breaks new ground in informal cooperative operations, community improvement and rural finance research by providing a peculiarity between standard of living and quality of life variables in measuring and determining the economic condition of rural livelihoods and the production of circle of New Institutional Economics theory that the role of cooperatives to the members involve financial capital, physical capital and social capital which are interrelated. This serves to properly distinguish and appropriately identify the roles of cooperative societies in rural finance to increase in household income, ownership of assets and acquisition of enterprise assets. However, the study reveals that access to funds and participation in the cooperative does not lead to enterprise profitability, thus less capital accumulation while rural financial needs are more accessible from cooperatives than other sources. From its findings, this study identified and discussed potential areas for the improvement of cooperative societies that could be of benefit to any urban and rural finance providers and the cooperative members.

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