The Role of Multi-Purpose Cooperatives in the Economic Development in Ethiopia, The Case of Lalo-Assabi District (West Wollega Zone, Oromia Regional State)

Abstract

The objective of this study is to show the overall development trends and the challenges encountering the multipurpose cooperatives (MPCs). To do so, research methodology employed was descriptive, which involved both qualitative and quantitative methods. Data were collected from both primary and secondary sources. The primary data were collected from the sample through cross-sectional survey from 210 respondents. Besides, 16 key informants and three focus group discussions (FGDs) were considered in the assessment. The instruments used were questionnaires, FGDs, in depth interviews, observation and document review. Both probability and nonprobability sampling techniques were applied. Data analyses were done using descriptive statistics. The result of the study shows the average rate of growth of members in sample MPCs is 19% as calculated from 2016-2018 and 79.3% from their formation period. The capital of the MPCs increased from 305,081 to 9.3 million and their profit was nearly 1.5 million ETB. Of the multifaceted services they provide, marketing agricultural inputs accounts for the great proportions. In general, the sample MPCs are contributing somewhat in the economic development. However, their performance is not as expected due to major problems identified: lack of professional managers, devoted management committees, limited capital base; weak horizontal and vertical linkages, low members' participation, insufficient dividend, lack of diversified activities; limited awareness, inadequate infrastructure, low stakeholders' participation, lack of adequate credit and necessary technical supports are among the hitches to be tackled. Hence, to unleash and sustain their development potential, proposed interventions to be taken are: Building the capacity of the management committees and their staff, hiring professional staffs, providing credit services, promoting members participation, establishing strong linkage, providing infrastructural facilities, providing technical support and etc. to mitigate the problems.