Cooperative

Organization for

Entrepreneurs

Objectives of the project

The introduction and the formation of the cooperatives.

The challenges faced by the urban and rural entrepreneurs and the role of

cooperatives to promote them.

The various aspects of women entrepreneurs and their

involvement in the cooperatives

The last part is the survey done on various cooperatives

Introduction To

Cooperative

Organisation

The International Co-operative Alliance (ICA), a non-governmentalorganization which is the umbrella organization for cooperatives worldwidedefines, a Cooperative Organization as “an autonomous association ofpersons united voluntarily to meet their common economic, social andcultural needs and aspirations through a jointly owned and democraticallycontrolled enterprise.”

In the report presented by the International Labor Organization (ILO),Cooperative enterprises help secure the livelihoods of an estimated threebillion people worldwide. They have one billion members and provide morethan 100 million jobs.

Cooperative organizations (Co-ops) are different from ‘for-profit businesses’which are owned by one or more investors whose intent is to make a profitby selling goods and services to other businesses and individuals.

Co-ops are also distinct from ‘non-profit organizations’ which are intendedto provide educational, charitable and other services and must reinvest anyprofits they make in their own operations or donate them to other non-profits or to government agencies.

History

• Cooperative efforts have occurred throughout history.

• Since early man cooperated with others to help kill large animals for survival, people have been cooperating to achieve objectives that they could not reach if they acted individually.

• It is difficult to pinpoint the exact origin of the first cooperatives.

• It is nevertheless possible to state that the cooperative movement as such appeared in Europe in the 19th century, following the economic, social and demographic changes caused by the Industrial Revolution.

• Robert Owen (1771-1858), known by some as the father of cooperative movement in Great Britain.

Open and voluntary membership;

Democratic control;

Interest on share capital limited to 6%;

Distribution of surplus to members in proportion to their transactions;

Cash trading;

Education and training for members;

Political and religious neutrality;

Charitable distribution of assets in the event of dissolution.

The Rochdale principles

It dominate the world cooperative movement. These principles are

the following:

Types of cooperatives:

Types Of cooperatives

Service Cooperativ

e

Financial

Consumer

Agricultural Housing Marketing

Worker cooperative

Producer Labour

Service Co-ops:

In these cooperatives, the

members join together with

a view to enjoy economic

advantages by securing

the goods and services

they need to exist, to carry

out their occupation or to

run their business.

Worker Co-ops:

The main objective of

worker cooperatives is to

create jobs for members.

There are two categories of

worker cooperatives:

producer cooperatives and

labour cooperatives.

Structure Of a cooperative :

The classical structure of a cooperative must consist of:

• General meeting;

• Board of Directors;

• Supervisory;

• Management committee

Alternative structure of

cooperative:

Setting up of a cooperative:

Form a core group

Carrying out a feasibility study

Drawing up a business plan

Organizing the inaugural general meeting

Applying for registration and/or consent for the cooperative

Getting the cooperative started

A cooperative is set up in the following 6 steps :

The procedure for setting up a cooperative is not any more complicated than

for any other form of business.

The inspiration for the creation of a cooperative generally comes from one or several people who have known of the potential for the set up of a cooperative and who have a good idea and a vision. These people will next contact other individuals to get them to join their cooperative project. Different ways of contacting members could be :

O word of mouth;

O by means of posters;

O handing out brochures or leaflets at public events;

O organizing a forum for a discussion about cooperatives and questions relating to the project;

O mass media (radio, press, television).

Once the core group has been formed, it is necessary to create a start-up fund, as various costs are associated with starting up a cooperative: telephone, photocopying, postage etc. As did the Rochdale Pioneers, the members can put aside a certain amount of money each day.

Constitution of the group

• An environmental study aimed at a better understanding of the socio-cultural scope of the cooperative;

• A market study for an evaluation of the market shares held by the competition operating in the area and working out how much will possibly come to the cooperative;

• A technical study for the physical requirements of the project: buildings, machinery, tools, etc. ;

• A study of the organizational structure specifying the technical arrangements required for the project;

• A legal study to justify the choice of the cooperative format as a legal format;

• A financial study for the evaluation of the total expenses and products of the cooperative and its foreseen results.

The feasibility study is broken down

into six parts:

Carrying out a feasibility study

Indeed, the business plan is a planning tool to describe the future direction of a business. It is very useful for possible requests for loans or funding.

• If well thought out, the business-plan:

• states the objectives of the cooperative;

• identifies the monetary and human resources necessary to run it;

• describes how these resources will be obtained;

• Explains why this enterprise will be successful.

Drawing up a business plan

B-

Plan

members must hold the inaugural general meeting, bringing together the entire membership of the cooperative.

It is this meeting which is responsible for the adoption of the cooperative’s rules and regulations as well as the business

plan

General meeting elects the members of the board.

Organizing the inaugural general meeting

Applying for registration and/or consent for the cooperative

Registration

Registering the cooperative with the appropriate administrative authorities allows it to be given the status of a moral person.

Following registration, the cooperative becomes a “person” in the eyes of the law, with the rights and responsibilities that it implies and can then carry the name “cooperative”.

The cooperative’s trade name

This is the name given to the cooperative. Members are asked to name their cooperative.

Usually the law demands that the trade name includes one of the following terms: “cooperative”, “coop”, “co-operative”.

The cooperative’s objective

In this section members have to explain in a few lines the cooperative’s objective.

A craft workers’ cooperative for example will have as its objective to provide a distribution network for the sale of its members’ products.

Details of the cooperative’s funding

This section gives information on the maximum number of shares a member can hold and to what extent the cooperative can receive investment money.

Restrictions

Members will indicate any possible restrictions affecting the distribution of power and/or activities of the cooperative.

This generally concerns questions on the object of the cooperative, ways of expelling a member, the administration of the cooperative, the composition of its general meeting, the resources of the cooperative and their source, methods of control, modification of internal regulations and dissolution.

Internal administration of the cooperative

The names of the cooperative’s directors

members will have the task of appointing directors for a specific term of office.

A director must be a member of the cooperative

Directors are responsible for the following functions: managing the cooperative; exercising the powers of the cooperative through its employees and managers; setting up committees as required; respecting the rules and laws governing cooperatives and the policies of the cooperative.

Approval

A request for approval must usually be accompanied by the following items:

1. A copy of the rules of the cooperative;

2. A certificate confirming the registration of the cooperative;

3. The amount of share capital and its spread among the different members;

4. A document giving detailed information about the project and focusing on the organization and running of the cooperative society as well as the human, material and financial resources secured to ensure its success.

Approval for the cooperative can be withdrawn if it is proved that it is not meeting the objectives for which it was set up.

At this stage of setting up the cooperative, all that remains is for members to select and recruit workers, organize a program of job training for them and finally start up the cooperative’s activities.

Getting the cooperative started

Cooperative organizations

for rural entrepreneurs

Introduction O Co-operatives affect rural development in many different ways

including provision of production inputs and services, reduction of transaction costs, enhancement of bargaining power of rural.

O Co-operatives also have played an important role in promoting agricultural and rural development in India, particularly in the field of credit, processing, and marketing. The Dairy co-operatives of Gujarat and Sugar co-operatives of Maharashtra are good examples of co-operatives that can promote and sustain rural development.

Problems faced by rural

Cooperatives

Poor Performance and Loss of Financial Viability.

Lack of Professionalism in Management.

Excessive Government Control and Political Interference.

Lack of Good Leadership.

Loss of Focus on the Prime Objective and Growing Alienation of Members

Poor Board-Management Relations

Lack of Performance-based Reward Systems and Poor Work Environment

Role of cooperatives in Urban

places

The cooperative as a modern business structure originated during 19th century in Britain.

In response to the depressed economic conditions brought forth by industrialization, some people began to form cooperative .

They began by opening a cooperative store that sold items such as flour and sugar to members, and the Society quickly grew to include other enterprises businesses to meet their needs.

These rules that were made : democratic control of members, payment of limited interest on capital, and net margins distributed to members according to level of patronage.

The challenges of

entrepreneurship in urban

settings

Family Challenges

Social Challenges

Technological Challenges

Financial Challenges

Political Challenges

Cultural Challenges

Role of cooperatives in

promoting rural and urban

entrepreneurs

Problems like, lack of capital to start any new venture, lack of motivation, lack of entrepreneurial skills etc., are some of the major reasons.

cooperative can play very significant roles.

Provides financial support at lower rates of interest than the commercial banks.

Also helps with free consultancy services

Many more services provided

Cooperatives for women

entrepreneur

Women Entrepreneur is a person who accepts challenging role to meet her personal needs and become economically independent.

"women-owned business" is used relative to government contracting. In this instance, the entrepreneur (a woman) owns (more than 50%), controls and runs the enterprise

Women Entrepreneur

Problem faced by women

entrepreneur

Lack of education

Problem of finance

Gender Inequality

Skepticism of financial institution

Obsolescence of technology and resulting increase in cost of production

Low-risk bearing capacity

Lack of entrepreneurial aptitude

Limited managerial abilities

Legal formalities

Lack of self confidence

Role of sewa bank

A Women's Self-help Organization for

Poverty Alleviation in India: SEWA India

O It was established in the year 1974 with 40000 self employed women workers.

O Today it has 51,000 depositors .

O The Sewa bank provides all finance-linked supportive services to its members and has started a work security insurance scheme and a housing programme

O These self-employed women workers included hawkers, vendors and home-based workers -- like weavers, potters, beedi-, agarbatti-, pappad-rollers " manual laborers and service providers

O Bank provide loan to employee and other women who are keen interested in starting their own venture with reasonable rates.

O Similarly it various program to motivate women to stand on their own feet.

O The most interesting thing about it is that it not only focus on educated women but also on those who have skills and have interest in learning skill.

Survey and Data Analysis

Methodology of Research:

Door to door

Telephonic

Online

The method use for our research on this topic was

surveying.

Methods of survey used :

Purpose of survey:

To know more about these kinds of organizations, their laws and regulations, working, formation , etc.

Look at their status as compared to commercial banks.

What role are these organizations playing in the upliftment of entrepreneurship activities.

To know about how these organisation work different from commercial banks to solve the problems of entrepreneurs and also make its member

economically, psychologically and socially satisfied.

To know about the roles played by them in the rural and urban areas to uplift the lifestyle of its members.

Mainly we wanted to know how are these organizations helping the common woman and also the woman entrepreneurs to reach their goal.

The different services and facilities provided by these organizations especially to women to make them financially, socially and psychologically

independent

Questionnaire

O A questionnaire is a research tool or

instrument which includes a series of

questions in a proper sequence which are to

be answered by the respondents, for the

purpose of gathering information.

O They are often designed for statistical

analysis of the responses.

We are the students of PEC University of Technology, Chandigarh, India, 5thsemester; this survey is a part

of our project, “Cooperative Organizations for Entrepreneurs” and the data collected will be purely used

for academic purpose.

General Aspect:

1. Name / Address of cooperative organization

_______________________________ / _________________________________

2. Type of cooperative organization

a. Worker

b. Service

c. Credit

d. Agricultural

e. Specify if others _____________________________

3. Type of service/s provided by the cooperative

a. Financial

b. Labour

c. Training

d. Consultancy

e. Specify if others _____________________________

4. Number of original members (Founder members): _____

5. Total number of members at preset:

a. 10-80

b. 80-160

c. 160-240

d. 240-320

e. 320-400

f. More then 400

6. Do your employees require any special training for business operation in cooperative?

a. Yes

b. No

Aspect of Urban and Rural Entrepreneurs

1. Where is your organization situated?

a. Rural Area

b. Urban Area

2. Problems you faced/facing in running the cooperative?

a) Low margin

b)Members

c) Marketing

d) Government rules

e) Specify if other

3)How many people have established their own firm/business with your help?

a) 1-20

b) 20-40

c)40-60

d) More then 60

4)Problems faced by the people you helped?

a) Financial

b) Labour

c) Social

d) Specify if others___________________________

5)Rate the role of cooperatives in the uplift of rural entrepreneurship?

1= No role played 3=Average role played 5=important role

a)1

b)2

c)3

d)4

e)5

6)Rate the role of cooperatives in the uplift of urban entrepreneurship?

1= No role played 3=Average role played 5=important role

a)1

b)2

c)3

d)4

e)5

Aspect of women Entrepreneur

1)How many women have been helped by your organization to be economically, psychologically and socially independent?

a)1-5

b)5-10

c)10-15

d)15-20

e)More then 20

2)What were the problems being faced by the women you helped?

a)Financial

b)Social

c)Lack of entrepreneurial skills

d)Specify others

3)Was your organization able to solve their problems?

1= NO 3= Not totally 5= Yes

a)1

b)2

c)3

d)4

e)5

4)Do you think government is providing a good assistance to the cooperatives, to work for the uplift of women?

a)Yes

b)No

5)Who participates more in activities of cooperatives?

a)Males

b)Females

6)How many women members are there in your cooperative?

a)1-40

b)40-80

c)80-160

d)160-240

e)More then 240

Name of the respondent: ___________________________________

Designation:______________________

Location of cooperatives :

Rural

urban

35%

65%

Types of cooperatives :

worker

Credit

Agricultural

Others

35%30%

20%15%

Types of Service Provided:

0 5 10 15 20 25

Financial

labour

Training

consultancy

Other

Types Of Service provided Bythe Cooperatives

Problems faced/Facing while

running a cooperative :

Low margin

Members

Marketing

Government Rules

Other

40%10%

3%

2%

45%

Participation in the activities

of cooperatives :

Male

Female

65%

35%

Number Of People Establishing Their Own Firm/ Business with The

Help Of Cooperative

upto 10

upto 30

upto 50

upto 100

more then 100

Number Of Women helped By the Cooperative

Upto 5

Upto 20

Upto 35

Upto 68

More then 90

0 5 10 15 20 25

Other

Lack of entrepreneurialskills

Social

Financial

Problems face by theWomwn helped by thecooperative

Problems face by the

Women helped by the

cooperative

Recommendation And

Suggestion:

Advertising is not appropriate, as many people are not aware of Cooperatives. Therefore Hoarding and Boards should be displayed at various prime location in the city.

Timely payment of salary and Promotion of employees will boost their morale.

All the complaints of Customer should be deal in proper manner because it is the customer who will give good or bad mouth about bank services.

Non maintenance & other charges which are very high as compared to other Banks should be reduced.

Existing customer should always be informed about the new product.