Why Cooperatives Fail in South Africa
What is called cooperatives?
A cooperative, frequently abbreviated as “co-op,” is a company or business that is owned and run by and for the benefit of its members. The members share its benefits and profits.
What are the types of cooperatives?
1. Producer / Marketing Cooperatives.
2. Consumer Cooperatives.
3. Worker Cooperatives.
4. Housing Cooperatives.
5. Financial Cooperatives.
6. New Generation Cooperatives.
7. Multi-Stakeholder Cooperatives.
8. Non-profit Community Service Cooperatives.
What is the main objective of cooperative?
The main objective of this society is to improve the social and financial well-being of its members as well as the economic condition of society.
Why cooperatives fail in South Africa?
According to a research, cooperatives fail in South Africa mainly lack of interest from members due lack of education and training of members and poor management, coupled with external challenges such as lack of training and skills, lack of access to land, lack of finance and lack of monitoring and evaluation of their initiatives.
What are the characteristics of cooperative?
1. Voluntary association
2. Separate legal entity
3. Democratic management
4. Service motive
5. Utilisation of surplus
6. Cash trading
7. Fixed rate of return
8. Government control
9. Capital
What are the advantages of a co-operative?
1. Members have equal voting rights.
2. This structure promotes member participation and shared responsibility.
3. Liability for members is limited
4. There is no restriction on the number of members.
What are the disadvantages of a co-operative?
1. Members have equal voting rights regardless of investment, which may not be appropriate for an investor-driven company.
2. Legal restrictions on dividend payments on shares may not suit an investor-driven business.
What is the most important resources to consider in a cooperatives?
The most important resource in a cooperative is people.
