In these challenging times, with global lockdowns and economic uncertainties, getting a loan can be a crucial lifeline for many Nigerians struggling to keep their businesses afloat. One often overlooked avenue for obtaining loans is through financial cooperatives.
In this article, we’ll explore what a financial cooperative is, its structure, types in Nigeria, and how to go about securing a loan from one.
What is a Financial Cooperative?
A financial cooperative is like a special kind of bank. It’s owned and run by the people who use it. Its main goal is to help its members with their money, rather than making profits like regular banks. It’s a bit like friends pooling their money together to help each other out.
How Financial Cooperatives Work
These cooperatives are made up of members, which means the people who use it are also the owners. The bigger the cooperative (more members), the more help it can offer with things like loans and savings. They’re known for offering loans with low or even no interest, which can be really helpful if you’re trying to manage your debts. Some cooperatives even have special plans to help members save for when they retire. A great example of a financial cooperative is a credit union.
Types of Cooperatives in Nigeria
- Primary Cooperative: This is when people in the same area and with similar goals team up to help each other out.
- Secondary Cooperative: This is a bigger version of the primary one. It happens when two or more primary cooperatives join forces.
- Tertiary Cooperative: This combines both primary and secondary cooperatives.
- Industrial Cooperative: This is when people with the same kind of job or skills come together.
Getting a Loan from a Cooperative Society
Here’s how you can go about it:
- Join a Cooperative: First, you need to become a member of a cooperative that’s focused on helping its members financially.
- Ask About Loans: Once you’re a member, ask about the loan services they offer.
- Wait a Bit: You might need to be a member for a little while before you can apply for a loan. The waiting period varies from one cooperative to another.
- Easy Process: Unlike regular banks, cooperatives don’t make getting a loan too hard. They don’t ask for as many things, and they’re more interested in helping you.
- Low-Interest Loans: They offer loans at very low interest rates, which makes it easier for you to pay back.
Conclusion
Cooperative lending is protected by laws in Nigeria, both at the state and federal levels. This is to make sure everyone is treated fairly, and any disagreements among members are sorted out. It’s a smart way of lending money, and it’s not just about cash. You can also get help with things like buying property or assets. So, if you’re looking for a way to get a loan, don’t forget about financial cooperatives – they might be exactly what you need.